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PUCO Makes Generation-Related Rider At DP&L Nonbypassable

October 23, 2017

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

PUCO, in an order on Dayton Power and Light's electric security plan, rejected the provision of an amended, non-unanimous stipulation that would have seen costs related to the sale of OVEC costs into the PJM market assigned on a bypassable basis, with PUCO instead ordering that OVEC costs/credits shall be nonbypassable.

Under the stipulation, DP&L was to, "defer/recover or credit," [sic] 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 was proposed to be charged on a bypassable basis

However, PUCO ruled that the OVEC reconciliation rider shall be non-bypassable

PUCO cited concerns with increased shopping at DP&L, and the potential for such shopping to increase the balance under the OVEC reconciliation rider, which would increase the impact on non-shopping SSO customers

"[W]e agree that there is the potential for escalating bill impacts as shopping increases. Therefore, we will modify the Amended Stipulation to provide that the Reconciliation Rider be nonbypassable," PUCO said

Regarding default service, PUCO adopted terms of a stipulation under which DP&L is to rely on a competitive auction mechanism for SSO supplies. Dropped from the final SSO mechanism was DP&L's original proposal to require winning full requirements bidders to supply Renewable Energy Credits (RECs) to meet the renewable energy requirements contained in ORC §4928.64. Instead, consistent with the current process, DP&L will procure RECs to meet the requirements in ORC 4928.64 and recover those costs on a bypassable basis. However, although these REC costs will be separately identified in supporting schedules, these amounts will be included as a component of the Standard Offer Rate instead of a separate Alternative Energy Rider (AER) Tariff. "This maintains the simplicity of one Tariff for bypassable charges that allows for an easy price-to-compare," DP&L had said

As previously reported, under the original proposal that is untouched by the final PUCO order, DP&L will rely exclusively on descending clock, slice-of-system, full requirements (excluding renewable compliance) auctions to procure 100% of SSO supplies.

Generally, apart from a five-month transition period at the start of the SSO, one-third of the SSO portfolio will be served under 12-month contracts, one-third under 24 month contracts, and one-third under 36-month contracts. However, at the end of the SSO term, varying contract term lengths will be used to align with the December 31, 2023 end date, including 43 month contracts (as well as 31 month, 19 month, and 7-month contracts).

Two SSO auctions (in February and May) will be conducted for procurement in the first period, June 1, 2017 to May 31, 2018. One auction will be held per year thereafter, held during the February prior to the June 1 start of delivery for that year.

Click here for the specific SSO contract term lengths, number of tranches, and procurement dates

Firm NITS and non-market based ancillary services will continue to be recovered via a nonbypassable charge, except a pilot program will allow a limited number of customers to opt-out of the nonbypassable treatment of such costs (discussed in our related story today

PUCO's order adopts the sought transition to an all-energy rate design for SSO rates, for all tariff classes. However, per the adopted stipulation, DP&L is 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.

Under the order, DP&L is to recover uncollectible expense associated with bypassable Standard Service Offer rates through a bypassable component of the Uncollectible Rider.

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