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Retail Providers Oppose Newly Proposed Fees Charged To REPs For Inadvertent Gains, Mass Transition Meter Readings At Texas TDU

August 14, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The Alliance for Retail Markets has filed testimony with the Texas PUC opposing new discretionary service charges proposed by Texas-New Mexico Power as part of TNMP's rate case, such as a new Inadvertent Gain fee, and a new fee for a meter reading for purpose of a mass transition

TNMP's proposal of the new fees had been first exclusively reported by in May (see story here)

TNMP has proposed a new Inadvertent Gain fee of $13 that would be applicable to retail electric providers that have selected an incorrect premise from the ERCOT portal for a switch or move-in and for which TNMP is required to correct the inadvertent gain. In TNMP's originally filed application, the amount for the Inadvertent Gain fee was listed as $25, but in a discovery response TNMP said that this amount was erroneous due to a transcription error.

A witness for ARM testified that, according to TNMP's response to ARM RFI 2-8, TNMP proposes to assess the inadvertent gain fee "while working the MarkeTrak" process (as opposed to upon its conclusion) to the gaining REP and to include the discretionary service charge on the final monthly 810_02 transaction (i.e., its monthly wires charges invoice) for the ESI ID to the gaining REP.

A witness for ARM testified, "ARM opposes TNMP's [inadvertent gain fee] proposal for three reasons. First, the imposition of the proposed fee to the gaining REP presumes the gaining REP's actions are always the root cause of the inadvertent gain, as demonstrated by the proposed tariff language used by TNMP to describe the new discretionary service charge. Contrary to this language, each inadvertent gain issue triggering the ERCOT MarkeTrak process is not the result of a REP's selection of an incorrect premise from the ERCOT portal for a switch or move-in transaction."

"Second, as stated in Sections 7.2(3) and 7.2.2 of the Retail Market Guide, ERCOT employs the MarkeTrak process to address or resolve a variety of other issues that may require a TDU's participation or input, including day-to-day issues relating to manual service order request cancellations and missing transactions, as well as billing questions and missing monthly usage issues. Additionally, the MarkeTrak process is used for requesting switch-hold removals and resolving advanced metering system (AMS) data issues (e.g., when the sum of an ESI ID's 15-minute interval data for the month does not match the monthly consumption data reported for the ESI ID). Based on my review of the ERCOT TDUs' discretionary service tariffs, the TDU's costs of participating in the resolution of these other types of MarkeTrak issues are not recovered through a discretionary service fee assessed to a REP. Presumably, those costs are recovered in the same manner as other labor-related O&M expenses, that is, through the TDU's base rates. To single out inadvertent gain cost recovery differently is unreasonably discriminatory to REPs," a witness for ARM testified

"Third, the proposed inadvertent gain fee is not based on an incremental cost to perform a service in this instance, but is principally based upon the period of time during which a TNMP employee engages in MarkeTrak-related activities in the resolution of an inadvertent gain. As stated earlier, the scope of a TNMP's REP Relations Senior Analyst's responsibilities are not limited to inadvertent gain MarketTrak duties. Presumably, such a TNMP employee's wages, benefits, and other grossed-up costs are included in TNMP's annual O&M expenses and recovered through its base rates. Consequently, if the proposed inadvertent gain fee is approved, a double recovery of inadvertent gain MarkeTrak-related costs will occur," a witness for ARM testified

"If the Commission does approve TNMP's proposed inadvertent gain discretionary service contrary to ARM's position, the fee associated with the service should be $12, or less if other labor adder exclusions or adjustments are warranted," a witness for ARM testified

As first reported by, TNMP also proposed a $0.40 charge for each meter reading per customer transitioned pursuant to the POLR rule. ARM testified that the proposed charge would be assessed regardless of the type of meter at the ESI ID premise, as reflected in Section (Standard Meter), Section (Non-Standard Meter), and Section (AMS-M Meter) in Exhibit SRW-18. It would also apply regardless of whether the meter reading is performed remotely, physically, or using an estimation process. TNMP's fee structure for this category of out-of-cycle meter reading does not distinguish between the minimal incremental cost of performing a remote out-of-cycle meter reading of a standard advanced meter via a two-way communications system versus the significantly higher incremental cost of performing a physical out-of-cycle meter reading of an interval data recorder (IDR) meter or non-standard meter that necessitates a "truck roll" to the meter's location, ARM said in testimony

ARM said in testimony that, "TNMP bases its $0.40 proposed fee on WP IV-J-2 - NON-COMM, which applies the assumed $35 cost for a truck roll to the meters location (see footnote 1) to a 2017 average unsuccessful AMS remote reading percentage of approximately 1.0188%, and then amortizes it across all switch orders received in 2017. In making this calculation, TNMP does not take into account the negligible cost to perform a remote meter reading when the standard advanced meters two-way communications functionality is working properly. Furthermore, TNMP does not consider the possibility of estimating meter readings after an attempt to perform a remote meter reading fails. With respect to the former, if the mass transition meter-reading fee for ESI IDs with a properly functioning standard advanced meter is based solely upon the cost to perform a remote out-of-cycle meter reading for those types of premises (i.e., all residential and most small commercial customer ESI IDs), the rate should be much lower than $0.40."

"ARM opposes the adoption of this proposed [mass transition meter reading] fee for two reasons. First, assessing such a fee to an exiting REP, particularly one experiencing financial issues that prompt the mass transition of customers to POLR service, risks the pass-through of the charge by the exiting REP to the customer in the exiting REP's final bill for retail service. No matter the amount of the discretionary service charge, the transitioned customer should not be faced with the prospect of paying this fee under such circumstances," a witness for ARM testified

"Second, the POLR rule currently specifies a mechanism by which a TDU recovers out-of-cycle meter-reading costs incurred in a mass transition of customers to POLR service. Under 16 TAC § 25.43(p)(16), the TDU is authorized to 'create a regulatory asset for the TDU fees associated with a mass transition of customers to a POLR provider pursuant to this subsection.' ... The rule further provides that the TDU is precluded from recovering the costs included in the regulatory asset through a discretionary service fee," a witness for ARM testified

"For the reasons discussed above, ARM recommends the Commission not approve TNMP's proposed mass transition meter reading fee. If the Commission does approve such a fee contrary to ARM's position, it should approve a separate fee for any ESI ID with a standard advanced meter that is based on the cost of performing the out-of-cycle meter reading for such a premise, which would include all residential customer ESI IDs. The same recommendation would also apply to TNMP's proposed charge for an out-of-cycle Meter Reading for the Purpose of a Self-Selected Switch for ESI IDs with standard advanced meters," a witness for ARM testified

ARM noted in testimony that TNMP also proposes an identical $0.40 discretionary service charge for an out-of-cycle Meter Reading for the Purpose of a Self-Selected Switch for all three types of meters, as reflected Section (Standard Meter), Section (Non-Standard Meter), and Section (AMS-M Meter). The proposed $0.40 charge for this discretionary service is based on the same calculation as the mass transition meter-reading fee, as outlined above.

"Consequently, ARM has the same concerns with respect to the proposed fee for the out-of-cycle Meter Reading for the Purpose of a Self-Selected Switch. As a point of reference, the other TDUs in ERCOT charge a fee between $0.00 and $0.15 for performing a remote out-of-cycle Meter Reading for the Purpose of a Self-Selected Switch for those ESI IDs with standard advanced meters," ARM said in testimony

Docket 48401

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