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Settlement Would Allow Large Customer In Washington State To Take Competitive Supply

Commission Staff Would Open Inquiry Into Retail Wheeling For Other Large Customers Under Stipulation

April 17, 2017

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

Puget Sound Energy has entered into a settlement with Microsoft and Staff of the Washington State Utilities and Transportation Commission that would allow Microsoft to purchase electricity supplies from the wholesale market

Through a special retail wheeling contract with PSE, Microsoft could obtain alternative supplies from the wholesale market under the following conditions, under which Microsoft agrees that:

• 25% of its power will be from renewable resources through 2020, with 40% from renewable resources after 2020. The remaining balance of its supplies must be from facilities that are not powered by fossil fuels ("carbon free").

• Microsoft will maintain its contributions to PSE’s energy efficiency program

• Microsoft will pay a $23.6 million transition fee that PSE will return to its customers.

• Microsoft will maintain its current contributions to PSE’s low-income energy program, plus make an additional $0.000307 per delivered kWh payment for the 20-year term of the special contract

Last year, PSE proposed a tariff revision (Schedule 451) that would create a new, optional retail wheeling service for customers who maintained a 10 aMW load at one or more customer sites served under PSE’s Schedule 40 over the entire test year of the most recent general rate case. The total amount of electricity to be provided by alternative power suppliers and delivered to all Schedule 451 customers at any one time would be 100 MW. The service would allow the class of customers eligible to take service under Schedule 451 to become non-core, distribution-only customers that acquire energy from power suppliers other than PSE.

The proposed Schedule 451 tariff had been intended to accommodate Microsoft, but PSE had noted that the proposal allowed for a limited amount of additional headroom for a limited number of eligible additional customers that could be served under the tariff. However, under the eligibility requirements as proposed, Microsoft was the only current customer that would have been eligible for the Schedule 451 tariff, UTC Staff had said

The settlement agreement would only narrowly approve the specific contract with Microsoft, and not the generic Schedule 451 tariff proposal.

However, settling parties acknowledge that UTC Staff will request that the Commission open a docket for the purpose of conducting a broader discussion of retail wheeling for industrial and certain commercial customers, after the instant proceeding is resolved. Staff will make the request with the hope that the review can be completed by June 29, 2018

"Staff understands that there is interest on the part of other large customers in retail wheeling service and open access to alternative power supply. Staff believes a broader discussion of the issues should take place before other filings requesting similar service are made," Staff said in testimony

"Staff recommends that once this proceeding is resolved, the Commission initiate a docket to receive comments and hold a workshop to better understand statewide stakeholder interest and perspectives on the broader law and policy issues not addressed in this proceeding. Such a docket will allow for a broader discussion of the issues of retail wheeling and direct access for industrial and certain large commercial customers of Washington’s regulated investor-owned utilities. Staff believes this discussion should take place outside of an adjudication or rulemaking proceeding. To be clear, Staff is only advocating for a discussion of relevant issues, it is not advocating for open access," Staff said in testimony

Washington State currently allows retail wheeling for large C&I (>10 MW) customers who had in 2001 made a one-time election to opt into retail wheeling service, under which they may source their supply from the wholesale market. The retail wheeling program has been closed to new customers since 2001

Docket UE-161123

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