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PUCO Approves AEP Ohio PPA Stipulation Which Commits AEP Ohio To Seek Retail Market Enhancements (SSO Adder, Supplier Consolidated Billing, Referral Program)

April 1, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Public Utilities Commission of Ohio has approved a non-unanimous stipulation to implement AEP Ohio's sought PPA rider to support affiliated generation

In the non-unanimous stipulation, AEP Ohio has committed to seek various retail market enhancements, though the design of certain enhancements will be determined in future proceedings, and PUCO did not adopt any specific retail market enhancements in its PPA order

As previously reported by EnergyChoiceMatters.com, AEP Ohio commits to propose a bypassable default service adder in a proposed extension of AEP Ohio's electric security plan to be filed separately as a condition of the PPA settlement agreement.

Specifically, AEP Ohio has agreed to propose and advocate for a pilot program that establishes a bypassable Competition Incentive Rider (CIR) as an addition to the SSO non-shopping rate above the auction price, with the purpose of incenting shopping, "and recognizing that there may be costs associated with providing retail electric service that are not reflected in SSO bypassable rates."

Click here for more details on the Competition Incentive Rider

AEP Ohio under the settlement is to propose the creation of a customer referral program pilot, "providing an EDU third-party agent call transfer process to educate and enroll interested customers moving and initiating service and to establish a procedure for the offering of a standard discount rate providing a guaranteed discount off the price to compare without early termination fees."

Furthermore, the settlement includes a proposal for a pilot supplier consolidated billing program

Specifically, AEP Ohio has agreed to work with PUCO Staff and Signatory Parties to determine the parameters of a 2-year Pilot Supplier Consolidated Billing Program for any Competitive Retail Electric Service provider that is a Signatory Party. The retail suppliers that are Signatory Parties are Direct Energy, FirstEnergy Solutions, and IGS Energy

Due to the nature of a pilot program, the supplier consolidated billing pilot would be limited to 5,000 customers per CRES Signatory Party for the first 6 months of active implementation. Upon review, the pilot may be expanded to 20,000 customers per supplier

Costs related to AEP Ohio's implementation of the Pilot Supplier Consolidated Billing Program would be shared 50% by the CRES Signatory Parties. AEP Ohio's 50% share would be eligible for recovery in a future rate proceeding.

Click here for more details on the Pilot Supplier Consolidated Billing Program

As intimated above, the settlement also requires AEP Ohio to file for approval of an extension of its current ESP program through May 31, 2024. Such application shall include, "[a] proposal to extend the competitive bidding process for SSO procurement, including the schedule, auction products and related matters."

Currently, one-third of default service is procured on 12, 24, and 36-month contracts, respectively, and presumably, the above language would continue this mix by referencing a continuation of, "the schedule, [and] auction products."

Under PUCO's order, AEP Ohio will enter into an eight-year power purchase agreement (ending May 31, 2024) for the capacity, energy and ancillary service output of AEP's 2,671 MW ownership share of nine generating units and AEP Ohio's 423 MW contractual share of Ohio Valley Electric Corporation (OVEC) generation. The nine generating units include Cardinal Unit 1 in Brilliant (Jefferson County); Conesville Units 4, 5 & 6 in Conesville (Coshocton County); Stuart Units 1-4 in Aberdeen (Brown County); and Zimmer Unit 1 in Moscow (Clermont County).

AEP Ohio has stated that products procured through the PPAs are to be sold into wholesale markets (not used for default service), with costs/benefits allocated on a nonbypassable basis. PUCO said that concerns that AEP Ohio may provide the products procured under the PPAs to an affiliated retail supplier are addressed by prudency and other reviews that PUCO will undertake

PUCO's decision is likely to be appealed by generators who claim the PPAs impermissibly interfere with wholesale markets.

Case No. 14-1693-EL-RDR

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