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Recommended Decision Would Expand Hourly Priced Default Service at PECO; Introduce Carve-Out For Large C&I Customers Regarding Certain PJM Charges

September 30, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

A recommended decision in PECO's default service proceeding issued on September 30 for the two-year period beginning June 1, 2015 would expand the customers subject to hourly priced default service, while also creating a "carve out" allowing large C&I customers to continue to pay certain non-market PJM charges to their retail supplier instead of PECO via nonbypassable charge (P-2014-2409362)

The recommended decision would adopt without modification the provisions of a partial settlement in the case, which addressed the manner of default service procurement, pricing (and frequency of price changes), and reconciliations for residential, small C&I, and large C&I customers. For details of these provisions recommended to be adopted, click here for our prior story on the settlement

Left to litigation was the procurement of default supplies for medium C&I customers -- those between 100 kW and 500 kW.

An ALJ would approve the expansion of hourly pricing to this customer class, reducing the hourly pricing cutoff to 100 kW from the current 500 kW.

Specifically, hourly pricing would be introduced to the medium C&I class by June 1, 2016, provided technical capabilities permit such transition. PECO commits to deploy and test the necessary systems changes to support an effective date of implementation for hourly priced default service for the medium commercial class no later than December 1, 2016.

Until hourly pricing is effective, non-laddered, six-month full requirements contracts would be used to serve medium C&I customers.

PECO is to use commercially reasonable efforts to implement and test billing and data management system changes necessary to implement hourly priced default service for medium commercial customers as soon as reasonably possible and no later than June 1, 2016 (when all medium commercial customers are expected to have interval meters).

If PECO determines that it cannot complete the implementation and testing of necessary systems changes in order to implement the hourly pricing transition by June 1, 2016, then PECO will confer with parties and the Office of Competitive Market Oversight (OCMO). If OCMO agrees that the hourly pricing transition cannot reasonably be completed by June 1, 2016, PECO will proceed with an otherwise scheduled March 2016 fixed price full requirements solicitation for medium commercial customers.

Also reserved for litigation was the treatment of certain non-market-based charges from PJM.

The ALJ would make the following charges nonbypassable for residential, small C&I, and medium C&I customers, and relieve retail suppliers of responsibility for these charges (with PECO assuming responsibility for all distribution customers): Regional Transmission Expansion Plan-RTEP (PJM bill line 1108); Expansion Cost Recovery charges-TEC/ECRC (PJM bill line 1730); and Generation Deactivation/Reliability Must Run-RMR (PJM bill line 1930).

However, the ALJ would grant large C&I customers a "carve out" regarding these PJM charges, excluding them from the nonbypassable charge, and leaving responsibility for the charge with the customer's retail supplier, to whom large C&I customers would pay such charges.

Network Integration Transmission Service (NITS), Unaccounted for Energy (UFE) and meter error correction charges would remain bypassable, and remain the responsibility of retail suppliers for shopping customers.

The ALJ noted that, "PECO has presented evidence to show that UFE costs and meter error correction charges are incurred as part of PJM's financial settlement process for the energy market and, therefore, are in no way related to the provision of transmission service. In addition, PECO's witness, Mr. McCawley testified that PJM has not yet developed an appropriate mechanism by which UFE – which is associated with every LSE in PECO's Zone – can be isolated and allocated only to PECO as an EDC."

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