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N.Y. Utility Proposes Selecting ESCO To Run Utility-Directed Opt-Out Aggregation Pilot Project

July 6, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Niagara Mohawk has proposed an update to its Clifton Park, NY Reforming the Energy Vision demonstration project, and now proposes to run what is essentially an opt-out municipal aggregation program coordinated with the town which has about 15,000 customers

Specifically, National Grid proposes to collaborate with the town and an energy manager that will seek, through competitive solicitation, an ESCO partner(s) to provide residents with electric and gas supply on an opt-out basis, via a "Community Energy Supply" program. The energy manager would provide experience with managing ESCO solicitations, providing community education, negotiating ESCO contract terms, and assisting throughout the procurement process (e.g., managing the customer opt-out process and communications), NiMo said

The ESCO-supplied Community Energy Supply program is replacing NiMo's earlier proposal to establish a "menu" of NIMO-offered plans with varying tiers of usage that customers would be provided each month, with a level charge for such usage, with NiMo as the supplier and service provider. Under the prior plan, customers exceeding their allocated usage would be subject to an overage charge, and higher-priced tiers would include certain energy-reducing value-added services (click here for background on the prior plan)

NiMo emphasized that the Community Energy Supply Procurement will utilize an ESCO to provide residents with electric and gas supply using a fixed pricing arrangement

"Participants will be provided more stable supply prices (e.g., fixed price for one year) and increased community input in the supply options (e.g., renewable choices reflecting the community’s energy goals)," NiMo said

In addition to providing supply to participants, the ESCO partner(s) will be asked to:

• fund a program that rewards participants for reductions in demand during peak times; and

• propose other DER [distributed energy resource] services such as financing for equipment or solar PV installations that will assist customers with managing their entire bill, including the supply portion.

NiMo will provide aggregated data for the solicitation to the energy manager and/or ESCOs. Existing ESCO customers and those who elect to opt out will not be eligible for participation in the Community Energy Supply Procurement. Once the opt-out period has expired, the ESCO will be provided customer-specific data for enrollment purposes. Enrollments with the ESCO will be handled like ordinary enrollments in the retail access program, NiMo proposes

The Community Energy Supply Procurement will also seek to share ICAP savings realized through the price signal services offered to participants. Such savings can only be realized on a delayed basis, after the ICAP tags are established for the following capability year and ICAP tags for the customer base can be compared to previous year ICAP tags, NiMo said

"In order to proceed with the Community Energy Supply Procurement, the Company is committed to providing a comprehensive customer engagement strategy in the Project Implementation Plan that documents how residents will be notified of the Community Energy Supply Procurement and their ability to opt out. Customers can expect to receive information through a variety of channels including those identified in the Customer Engagement Section herein," NiMo said

NiMo intends to manage the notification process including sending the letter to residents notifying them of the opportunity to be served by the selected ESCO(s) through the Community Energy Supply Procurement as well as the opportunity to opt out by completing and returning the letter within a specified time frame (e.g., two months’ time).

• Customers can choose to opt out of this initial program offering at any time and at no cost, even if they do not opt out during the initial opt out period.

• NiMo will use the standard retail access letter and bill message to notify participants (i.e., those not opting out) of the switch to the selected ESCO(s). In addition, NiMo plans to use other channels identified in the Customer Engagement Section to notify customers of the ESCO selected through the Community Energy Supply Procurement.

NiMo plans to issue an RFP for the Community Energy Supply Procurement in Q3 2016, with ESCO Selection in Q4 2016 and the opt-out period and enrollment occurring in Q1 2017

In order to enroll customers with the ESCO on an opt out basis, NiMo noted that it will require a limited temporary waiver of Commission rules regarding express consent to switch suppliers. Once the proposal for the Clifton Park pilot is accepted, NiMo will file a request for the required waiver.

Separate from the Community Energy Supply Procurement, NiMo also proposes to offer a voluntary Time of Use rate under the Clifton Park demonstration project. Though not clear, we believe such rates would apply to supply (not just T&D), with energy supplied by NiMo

Residents must opt in to the Clifton Park TOU or demand rate. To encourage enrollment, the Company is proposing a one-year “make whole” provision so a participant will pay the same or less than if the participant had stayed on the current residential SC-1 rate. The “make whole” provision will be calculated at the end of a participant’s first year on the TOU or demand rate with a credit being applied to the account. Participants enrolled in a Clifton Park TOU or demand rate will have the option to either remain on the Clifton Park TOU rate after the Project term ends or revert back to the standard SC-1 rate.

In addition, during the Project term, those opting into the Clifton Park TOU or demand rate may choose to withdraw from the Clifton Park TOU or demand rate and return back to the SC-1 rate at no penalty or cost to the participant.

See NiMo's updated proposal here for more details on the programs

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