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RESA Alleges That Eversource's Proposed Grid Modernization Would Favor Default Service Customers, Discriminate Against Retail Supply Customers

RESA Opposes Basic Service Design Changes Sought Through Rate Case

July 25, 2017

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

In a post-hearing brief on an Eversource rate case in Massachusetts, that would consolidate and institute uniform rates for the Nstar and Western Massachusetts Electric Co. service areas, the Retail Energy Supply Association alleged that grid modernization proposals that are part of the filing, and a related case, discriminate against retail supply customers in favor of basic service customers.

"Eversource is erecting deliberate hurdles that inhibit customer and third party participation in the market," RESA alleged in its brief.

"The proposals, in particular, the provisions in the IGMP [Incremental Grid Modernization Plan] that restrict advanced metering and communications technologies to only the Basic Service customers who opt to enroll in a TVR [time-varying] rate, and the provisions that impose costs on access to real-time data that are unaffordable, dissuade customers and third parties from engaging in the market. In both the IGMP proceeding and this proceeding, Eversource has proposed concepts that fundamentally change basic or default service and the competitive retail supply market. In both proceedings, Eversource is proposing market design concepts that make it more difficult and more expensive for competitive suppliers to offer retail electricity products and services that will facilitate the Department's goals for a modernized grid and engaged customers," RESA alleged in its brief.

"In both cases, Eversource is proposing changes that will make it more difficult for competitive suppliers and their customers to use a modernized grid. For example, Eversource is proposing to limit access to advanced metering and communications equipment to a small subset of Basic Service customers. If any other customer wishes to avail itself of the features of the modernized grid, including those customers who have chosen competitive supply options for their generation needs, each such customer will be required to purchase its own meter (and Eversource will then own such meter), and also pay more for access to actionable electric consumption data," RESA alleged in its brief.

RESA noted that Eversource proposes increasing the cost for load pulse data access to $454.54 per request for existing meters and $847.42 per request with a meter upgrade and eliminating the monthly payment option. "As a result, the cost for this data will increase by as much as nine times ($91.91 v. $847.42)," RESA said

"RESA is supportive of a modernized grid that benefits all of Eversource's distribution customers and enables development of innovative products by all energy market participants, including competitive suppliers. Conversely, RESA is not supportive of a modernized grid, financed by ratepayers revenues, designed in a highly discriminatory manner to exclusively benefit a select subset of Eversource customers who take a certain basic or default service product from Eversource and not from competitive suppliers, by providing only to this subset of distribution customers who take generation service from Eversource the tools necessary to engage with the grid. Investment in smart meters and related technologies and processes is clearly a 'distribution infrastructure' function and should benefit all distribution customers. Therefore, all related decisions, including who gets the meters and how they are being paid for should not discriminate against customers who happen to choose to buy electricity from a supplier. All customers utilize the distribution infrastructure and, therefore, should be treated the same in shouldering the burden of distribution infrastructure financing and reaping the rewards of that investment," RESA said in its brief

Other Issues

RESA also noted that Eversource is seeking certain basic service design changes as a result of consolidating Nstar and WMECO rates, and opposed addressing such issues in the instant rate case, in favor of a proceeding dedicated to reviewing the basic service changes holistically.

Eversource has stated that the consolidation of rate classes necessitates a re-classification of the rate classes that are classified as commercial versus industrial. Basic service pricing for commercial customers is in effect for six months on a fixed basis whereas industrial customers face variable pricing that is set quarterly. The consolidation of rate classes will place all small general service customers under the commercial six month procurement while the larger G-2 through G-4 classes will be subject to the quarterly industrial procurement.

"While Eversource is not technically proposing any changes to Basic Service rates in this proceeding, its proposal to change to a quarterly procurement cycle for some rate classes, will and should necessitate changes to the rate structures for those same classes in order to provide customers with the most accurate price signals As a consequence, Eversource will tacitly be making changes to its Basic Service rate offerings in this proceeding. However, because the changes to the procurement structure will be examined in this proceeding and the actual changes to the corresponding Basic Service rate offerings will be examined separately at some later time, the ability of stakeholders to offer insight to aid the Department in evaluating the proposed changes will be limited; in this proceeding, because the impact of the change in procurement structure on the Basic Service rate offerings is not being explored and, in the future proceeding, because the changes to the Basic Service rate offerings that will necessarily follow from the procurement structure changes will essentially be a fait accompli," RESA said

"Therefore, rather than permitting Eversource to bifurcate the issues, RESA strongly urges the Department to reject the rate consolidation and alignment proposals and require Eversource to seek approval of those proposals and the resulting changes to the Basic Service rate offerings in a single proceeding that will allow for a complete and meaningful evaluation and facilitate a better public policy outcome," RESA said

RESA also said that Eversource is seeking to consolidate all residential customers (Nstar and WMECO) onto a single residential default service rate, regardless of load zone.

"Rates that fail to recognize zonal cost differences do not provide appropriate price signals and distort the actual cost; thereby, impeding the competitive market, which is not consistent with the public interest. In order to maintain a robust and properly functioning retail market by ensuring that Basic Service rates align with prevailing market prices and are sending efficient price signals, RESA urges the Department to reject a proposal 'that all residential customers across Massachusetts ... have the same rates,'" RESA said

RESA opposed Eversource's proposal to add a requirement that suppliers receive affirmative customer consent for the release of capacity tags. "[T]ere is no valid basis for distinguishing capacity tags from other historic usage information," RESA said.

RESA also opposed Eversource's proposal to increase the administrative fee for the electric supplier offer information program in the WMECO service territory from a pro rata share of $53,500 per year ($19,000 for administrative expenses and $34,500 for call center expenses) to a pro rata share of $246,756 per year

Docket 17-05

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