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Including Large C&I Customers In Municipal Aggregations On Opt-Out Basis Pushed In New York

Allowing Municipal Aggregations To Tap Funds From Nonbypassable System Benefit Charges Also Proposed

Billing, Other Changes Sought To Facilitate CCAs Offering DG Or Non-commodity Services

January 17, 2018

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

A Community Choice Aggregation (CCA) Subgroup tasked with examining barriers to municipal aggregation, particularly with respect to the use of CCAs in meeting various clean energy goals, has filed a report with the New York PSC on the working group process that summarizes various recommendations offered by various parties in the group

The report contains few consensus recommendations, and largely notes non-consensus recommendations offered by various parties.

Notable among the recommendations proposed by certain participants is the inclusion of large C&I customers in municipal aggregations on an opt-out basis

"To enable CCAs to aggregate a larger load, some, but not all, participants agree that the PSC should consider allowing commercial and industrial (C&I) demand metered customers to be enrolled in CCA on an opt-out basis. Some, but not all, participants feel that doing so would have a positive effect on the economics of CCA by increasing aggregate load and thereby the ability of CCAs to effectively negotiate lower rates and generate revenue for CCAs via the administrative fees," the report states

"Other participants believe that since the Subgroup did not contain representation from the C&I customer segment in New York, it is not appropriate to make such a recommendation without first hearing those customers’ perspective on opt-out CCA or CDG enrollment and the potential impacts thereof," the report states

Another notable recommendation is that CCAs should have access to funds from the system benefits charge (SBC), generally paid by customers on a nonbypassable basis, or be allowed to create a new funding source, for certain distributed generation (DG) and energy-efficiency offerings

"Funding to cover CCA programmatic offerings such as local distributed generation (DG) and energy-efficiency products and services is limited and/or difficult to access. Some alternatives that should be considered are allowing CCAs to collect funds directly for these purposes or the creation of a dedicated source of funding (possibly through NYSERDA or other state agencies or authorities such as the New York Power Authority (NYPA)). The funds could support the development of CCA Implementation Plans, programs related to energy efficiency, and assistance program participants (APPs), as well as other programs that are consistent with state clean energy goals. It will be important, however, that CCA Administrators and distribution utilities coordinate such programs to avoid unnecessary duplication, customer confusion, and distorted price signals. Some participants think that the use of system benefits charge (SBC) funds by CCAs should be explored further while others note that NYSERDA’s and utilities’ share of SBC funds is limited and set to decline over time. Some participants also caution that this proposal would prevent CCA participants from taking advantage of established SBC-funded programs offered by local utilities and/or NYSERDA, as well as potentially impacting the effectiveness of SBC-funded utility offerings. In addition, some participants, but not all, think consideration should be given to exploring collaborative earnings opportunities between CCAs and utilities. Others believe that such an approach is inconsistent with the Commission’s May 19, 2016 Order Adopting a Ratemaking and Utility Revenue Model Policy Framework," the report states

The report also contains non-consensus recommendations concerning facilitating the offering of community distributed generation or other clean energy services by CCAs.

"To facilitate the integration of CCA and CDG, some Subgroup members believe that the PSC should enable CCAs to enroll participants in CDG on an opt-out basis, rather than requiring customers to individually opt-in to CDG. The Subgroup acknowledges that the integration of CCA and CDG should maintain or enhance the benefits that CDG offers APPs and low-moderate income (LMI) customers. Some participants feel that using local authorizations for CCA as a proxy for customer consent for CDG should be examined by the Commission. Some participants are concerned opt-out CDG could pose a risk to customers and create confusion," the report states

The report furthers states, "There are currently limited billing options for non-supply CCA services, such as energy efficiency and CDG. A CCA Administrator could work with its ESCO to incorporate charges associated with these services into a blended supply price that is collected via the utility bill, or alternatively, a separate bill could be sent to customers participating in efficiency or CDG. If these services are included in a blended supply price, there are options for including information about the CCA program and its offerings on the utility bill. For example, a CCA Administrator and its ESCO could work with the utility to include a message on the ESCO page of the bill. However, there are limited options for change to the utilities’ bill formats to accommodate substantially different text fields or images. The Subgroup recommends that consideration should be given to including information on the utility bill that more clearly indicates whether the customer is enrolled in a CCA and/or CDG program."

"Under current Commission directives, when customers sign up for CDG they are agreeing to pay two bills - the utility bill and the CDG bill. A CDG credit is displayed on the utility bill. The CDG charge, often called a subscription fee, is displayed on a separate CDG bill. Some Subgroup members believe that this two-bill arrangement is a limitation on the expansion of a CCA’s scope and objectives beyond supply procurement, which could be addressed by a one-bill solution (see discussion of Near-Term Policy Recommendations for more detail). Additionally, some participants also recommend exempting CCAs from the CDG 1,000 kWh per year minimum supply limit to support the distribution of kWhs across the customer base, to better enable the integration of CCA and CDG. They feel this would allow CCAs to start small and build towards more significant allocations of CDG credits to individual accounts over time. Related to this, if a CCA partners with more than one CDG project, some Subgroup members believe that the CCA members/end users should be allowed to obtain CDG credits for more than one CDG project," the report states

Allowing counties to form CCAs, rather than individual municipalities within such counties, was also proposed by some stakeholders.

"In addition to these recommendations, Subgroup participants recognize that the size of some municipalities can limit a CCA’s bargaining power and ability to gain traction and leverage resources for CCA opportunities. The current Order encourages inter-municipal programs but does not allow counties to establish CCA programs on their own. Some, but not all, participants agreed that the PSC should consider seeking a determination from the NYS Department of State as to whether it would be inconsistent with General Municipal Law to enable counties to pass local authorizations for CCA, form a CCA, and sign contracts on behalf of member municipalities to reduce the amount of redundancy and inefficiency when small, resource-constrained municipalities in NYS try to aggregate," the report states

The Subgroup recommended that "some level" of CCA-relevant energy usage data be provided at no charge through the utility energy registry (UER), though the report did not further define a specific recommendation regarding the scope of such data.

Case 14-M-0224

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