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N.Y. Staff Recommend Further Lowering Hourly Pricing Cutoff
December 5, 2011
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Copyright 2010-
New York PSC Staff have recommended lowering the current mandatory hourly pricing cutoff for default service customers at Orange & Rockland, and also recommended changes in the pricing of capacity (11-E-0408).
Specifically, in direct testimony in O&R's rate case (8/1), Staff proposed requiring that default service customers be subject to hourly pricing if the customer has demands greater than 100 kW in two months during the previous twelve-month period.
The currently applicable hourly pricing cutoff at O&R is 500 kW, but it will be expanded to 300 kW effective May 2013 under a prior PSC order.
O&R has 230 customers, comprising approximately 44 MW of load, with individual maximum demand levels above 100 kW but below 300 kW. Of those 230 customers, 162 currently receive their commodity from an ESCO, leaving 68 on default service.
The 100 kW threshold would be the lowest of any New York utility, and would tie Commonwealth Edison for lowest in the country. Niagara Mohawk has the lowest hourly pricing cutoff in New York, at 250 kW, though it is still in the process of being implemented.
Staff did not formally recommend a schedule for lowering O&R hourly pricing to 100 kW, but suggested a start in the spring of 2015, with interval meters installed for affected customers in the spring of 2014. This would provide affected customers with 12 months of interval usage data in preparation for the switch to hourly pricing, and would allow O&R to complete its current expansion to 300 kW before installing additional interval meters.
As under current practice, hourly pricing would not apply to customers taking service under Rider G - NYPA Economic Development Power (EDP), or Rider J - NYPA Power for Jobs Rider, regardless of their demand.
With the expanded hourly pricing, ESCOs' load for the affected customers in the 100 kW-300 kW class would be settled using actual hourly data, rather than an estimate based on the entire class average hourly load shape.
Regarding the capacity price paid by hourly priced default service customers, Staff recommended that O&R use the spot price of capacity instead of the six-month strip contract to calculate the capacity charge.
Staff noted the PSC's prior finding that, "Over the longer term, we expect all remaining utility served commercial and industrial customers will be exposed to a pass through of spot market prices in utility rates."
"The Commission's words speak for themselves. There is no reason to continue to hedge capacity rates for [hourly] customers; the monthly spot price should be used instead," Staff said.
For default service customers not on hourly pricing, Staff recommended that O&R change the factor used to allocate capacity costs, similar to a recent change at Niagara Mohawk.
Specifically, Staff recommended using a load factor based on the class contribution to system peak, instead of a load factor based on that individual class's peak load as is currently used. "Using O&R's current load factor distributes capacity costs based on the class' peak demand, which is not necessarily the class' load during the New York System's peak," Staff noted.
Email This StoryCopyright 2010-
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