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New York PSC Approves ConEd/O&R Smart Home Automation & Supply Pricing Demonstration Project

Includes Unique Supply Pricing Mechanism Versus Standard Default Service

February 8, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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The New York PSC has approved a Smart Home Rate (SHR) REV Demonstration Project filed at Consolidated Edison and Orange and Rockland, for electricity customers

Under the ConEd/O&R Smart Home Rate demonstration project, open to full service customers, there will be two smart home rate options tested, with supply pricing different from standard default service

The utilities will also test different responsive technologies. Some customers will receive price-responsive automation technology, which will be used to optimize their central-air-conditioning loads (Track 1); these customers may be assigned to either rate option discussed below. Other participants will receive price-responsive storage systems, which will be used to optimize their overall usage, taking into account the output of their rooftop photovoltaic systems (Track 2); these customers will only be assigned to Rate I

Energy supply pricing will be the same for both rate options (Rates I & II, which have unique delivery rate designs), but the rates have unique capacity charges

Under the pilot, both Rate I and II will be charged supply energy rates reflecting the day-ahead hourly locational based marginal prices (LBMP) set by the New York Independent System Operator. For ConEd, this encompasses Zone J in the ConEdison service territory of New York City and Zones H and I in the ConEdison service territory of Westchester County

Rate I will include a generation capacity charge applicable during a critical peak event. For peak events, as determined below, the capacity rate (Critical Peak Event Charge) will be as stated on the Statement of Market Supply Charge (MSC) - Capacity

Under the pilot, on any day of the year, the utility may declare Critical Peak Generation Capacity Events. The utility may declare up to 10 Critical Peak Generation Capacity Events per 12-month period. During any declared event, the Customer’s highest integrated 60-minute demand occurring entirely during the declared event period shall serve as the basis for the Customer’s billable demand for the event. Each event shall be billed separately. If a Customer exports power during an event and has a maximum integrated 60-minute demand occurring entirely during the declared event period of less than zero, the Customer shall receive a credit for the minimum integrated 60-minute level of export at the Critical Peak Event Charge applicable to that event

For Rate II customers only, there will be two capacity charges, a monthly charge and a critical peak capacity charge

Rate II allows the customer to "subscribe" to a set amount of demand per month (selected by the customer, or a default level if no choice is made). Rate II customers will pay a capacity charge, set by the MSC, for such level of subscribed demand each month. Additionally, during a critical peak event, Rate II customers will pay a capacity charge (the MSC) for any kW above their subscribed level

In adopting the pilot, the PSC ordered changes to the energy supply tariff language to exclude costs/benefits from the utilities' supply hedging from the pilot supply rates

"Modifications are ... required where the tariff amendments address the supply charges for participating customers. The supply charges, as described in the tariff amendments, will be based on the actual day-ahead hourly LBMP set by the NYISO for the relevant NYISO load zone in the Con Edison or O&R service territory where each participant is located. The proposed tariff amendments do not, however, excluded the costs or benefits of the Companies’ hedging programs from the tariff provisions applicable to the SHR Demo participant. Assessing these costs or benefits masks the true day-ahead hourly LBMP. As such, the Companies are directed to modify their Supply Charge tariff provision to exclude SHR participants from the applicability of the hedging programs, like the exclusion applicable to mandatory hourly priced customers," the PSC said

The PSC also directed the utilities to clarify a price guarantee under the pilots

"The proposed language in the tariff amendments is unclear as to which customers the price guarantee applies to. Therefore, the Companies are directed to modify the paragraphs describing the price guarantee to specifically state that the guarantee will be provided to all Rate I and Rate II customers whom are not provided with the battery storage system," the PSC said

As envisioned, participants in Track 1, under either Rate I or II, will receive a price guarantee for the first 12 months the customer takes service under the program. In the event a customer’s total annual cost is higher than what they would have been under their standard S.C. No. 1 service classification rates, the customer will be provided with a credit for the difference at the end of the first year of their enrollment in the program. Participants under Track 2 will receive no such price guarantee, because they received a battery storage system free of charge that they will be able to keep after the demonstration expires. The cost of the price guarantee will be included in Con Edison’s Monthly Adjustment Charge (MAC) and O&R’s Energy Cost Adjustment (ECA).

The PSC said that the utilities expect to enroll approximately 2,350 participants in the demonstration project and begin the program in October of this year.

Case 18-E-0548

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