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Update: NY PSC Staff Provides Formal Finding Allowing Utility's Plan to Select ESCO To Run Utility-Directed Opt-Out Aggregation Pilot Project To Move Forward

December 2, 2016

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

Staff of the New York PSC have issued a Staff Assessment Report on Niagara Mohawk's Clifton Park Demand Reduction Reforming the Energy Vision Demonstration Project, which includes NiMo's proposal for what is essentially a utility-directed opt-out municipal aggregation program coordinated with the town which has about 15,000 customers.

In a July letter, Staff had previously informed NiMo that the proposal complied with the REV goals and could proceed to the next stage. The newly filed Staff Assessment Report provides the reasoning for Staff's earlier findings, and includes certain requirements related to the opt-out aggregation.

With the Staff Assessment Report now filed, NiMo will next file an implementation plan with the Secretary of the PSC. Such implementation plan will include a detailed schedule, budget, projected milestones, and appropriate metrics.

As previously reported (click here), part of NiMo's revised plan is a collaboration with the Town of Clifton Park and an energy manager to 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 in its plan

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

NiMo has 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 its plan

"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 in its plan

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.

Under its July filing, NiMo had originally planned 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.

The Staff Assessment Report conditioned NiMo's Community Energy Supply Procurement on the program complying with certain provisions required from municipal aggregations.

Specifically, Staff said that National Grid is required to work with Clifton Park to pursue enactment of a local law by Clifton Park, pursuant to its authority under its Municipal Home Rule Law, in order to implement the Community Energy Supply Procurement aspect of the demonstration project. If approval is not obtained by the elected officials, NiMo will not be able to implement the Community Energy Supply Procurement program on an opt-out basis.

Pursuant to the PSC's prior CCA Order, Staff said that NiMo shall, for the Community Energy Supply Procurement, file with the PSC a CCA implementation plan that includes, among other things, a consumer engagement plan, program goals, and sample consumer communications (opt-out- letters), as well as a Data Protection Plan that details the level of protection to be provided to customer data.

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