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Updated Default Service Stipulation, Now Signed By PUC Staff, Removes Proposed Adder To Default Service Rates

March 14, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

A revised stipulation, which now includes PUCO Staff as a signatory, governing Dayton Power & Light's electric security plan and Standard Service Offer (SSO) for the period January 1, 2017 through December 31, 2023 would remove certain provisions from an earlier stipulation which would have added components to bypassable SSO rates

Most notably, an earlier stipulation would have required DP&L to establish a new component to the Standard Service Offer as an addition to the SSO non-shopping rate-in order, "to recognize costs DP&L incurs to provide default service to customers, or costs otherwise avoided by default service, that are not reflected in SSO bypassable rates."

The component added to the SSO rate would have been $0.0033 per kilowatt-hour for all default service customers. Under the prior stipulation, the total collected from this component would first have been applied to the Unbilled Fuel deferral (amortized over 3 years) with remaining amounts refunded to all customers via a nonbypassable Regulatory Compliance Rider (RCR).

The new stipulation that includes PUCO Staff as a signatory omits this proposed bypassable adder to SSO rates

Instead, the new stipulation provides that, in DP&L's filed distribution rate case (Case No. 15-1830-EL-AIR), "there will be an evaluation of costs contained in distribution rates that may be necessary to provide standard service offer service."

Additionally, under the new stipulation, DP&L agrees to not implement a bypassable cash working component of the SSO rate as originally proposed.

The new stipulation would maintain the competitive auction structure and timeline for SSO procurements as proposed in the earlier stipulation (see details here). Notably, as is current practice, RECs for SSO renewable compliance will be procured outside of the SSO auctions, although REC costs will now be reflected in the SSO price rather than a separate bypassable rider

The new stipulation would adopt the sought transition to an all-energy rate design for SSO rates, for all tariff classes. However, the new stipulation would require DP&L to phase-in the proposed energy-only rate design for the Residential Heating Class and Secondary Class over a two year period such that DP&L's proposed rate design will be in place beginning year 3 of the ESP.

The new stipulation would require DP&L to recover uncollectible expense associated with bypassable Standard Service Offer rates through a bypassable component of the Uncollectible Rider.

Additionally, certain Ohio Valley Electric Corporation (OVEC) costs/credits would be made bypassable under the new stipulation

After an order on the ESP case, DP&L shall defer/recover or credit, the net of proceeds from selling OVEC energy and capacity into the PJM marketplace and OVEC costs. A reconciliation rider for such OVEC costs/credits will be charged on a bypassable basis, allocated to tariff classes based on an allocation method of 50% demand and 50% energy with demand being allocated on non-shopping customers 5 coincidental peak (5 CP) basis and charged on kWh basis.

Omitted from the new stipulation is the requirement for DP&L and/or its affiliates to procure and/or develop a total of at least 300 megawatts (MWs) nameplate capacity of wind and or solar energy projects in Ohio

Unchanged by the new stipulation is that, contingent on FERC approval, DP&L agrees to transfer its generation assets and non-debt liabilities to AES Ohio Generation, LLC, an affiliated subsidiary of DPL Inc., within 180 days following final Commission approval of the stipulation. DP&L (or the affiliate to whom the generation assets are transferred) will commit to commence a sale process to sell to a third party its ownership in the Conesville, Miami Fort, and Zimmer generating stations

DP&L also agrees to continue pursuing options to discharge its OVEC obligations.

The new stipulation would require DP&L to file a comprehensive Distribution Infrastructure Modernization Plan within three months of completion of the Commission's grid modernization initiative or February 1, 2018. Such plan would include proposal for advanced metering and implementation of the availability of validation, estimation and editing data to CRES providers

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