Maine PUC Uses Alternative Default Service Mechanism for Large Classes at CMP, BHE February 20, 2012 Email This Story Copyright 2010-12 Energy Choice Matters
The Maine PUC has established an alternative process to establish Standard Offer rates for the large non-residential classes at Central Maine Power and Bangor Hydro-Electric, and also set prices for the month of March (Docket 2011-491).
Specifically, the PUC developed a Standard Offer structure consisting of four components: (1) energy; (2) capacity; (3) a fixed adder; and (4) an uncollectible adder.
The energy component paid by retail customers will be determined by the Commission prior to every month based on electricity futures prices; however, the amounts paid to the Standard Offer supplier (selected through a bid) would reflect actual energy costs as assessed through the ISO-NE market settlement system.
More specifically, the actual energy prices for CMP and BHE's large customer classes will be determined prior to each month of the March-August term based on ISO-NE Internal Hub Peak and Off-Peak Locational Marginal Pricing (LMP) electricity futures as settled through CME Group on the 15th day of the prior month.
The Commission indicated that Standard Offer prices would not be adjusted during the six-month term to reconcile for any over or under collections resulting from the energy component. The Commission indicated that any variance between the amount charged customers and the amounts paid to the supplier will be credited or debited to the Standard Offer uncollectible account for the large classes.
The capacity component and fixed adder component (that would reflect all other costs and risks perceived by the Standard Offer supplier) were set through a bid, and the uncollectible adder was set by the Commission prior to the final bids.
For March, the PUC said that the large non-residential Standard Offer energy prices, which include the energy component and other factors billed on a kWh basis, including line losses and the fixed adder, will be as follows:
The Standard Offer price will include the energy component plus the capacity components of: