Retail Suppliers Seek To Intervene In BGE Rate Case Where Utility Has Proposed Setting Bypassable Amount For Costs Not Currently Reflected In SOS Rates

June 26, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A group of retail electric suppliers filed a motion to intervene in the newly filed electric rate case of Baltimore Gas & Electric, where the Maryland PSC will address a proposal from BGE to reflect, in the bypassable SOS Administrative Adjustment, costs of providing SOS that are not currently bypassable

In an exclusive analysis of BGE's rate case and testimony, EnergyChoiceMatters.com previously reported that BGE said that the costs related to the provisions of SOS which are not currently bypassable are about 1 mill per kWh (see our prior story here for an in-depth review)

NRG Energy, Inc., Direct Energy Services, LLC, Vistra Energy Corp., and Interstate Gas Supply, Inc. (collectively, 'Energy Supplier Coalition') petitioned to intervene in the rate case, stating, "Of particular interest to the Energy Supplier Coalition is the method that BG&E follows in its Cost of Service Studies to allocate indirect, or overhead, costs to distribution service and standard offer service ('SOS'). Through its intervention in this proceeding, the Energy Supplier Coalition intends to examine BG&E’s Cost of Service Studies for the primary purpose of determining whether the Company allocates a reasonable portion of its indirect, or overhead costs, to SOS. To the extent that BG&E allocates no such costs, or an insufficient amount of these costs, to SOS, it is using revenues from its distribution business to subsidize SOS. If that is occurring, it means that BG&E’s distribution rates are too high and its SOS prices are too low."

The suppliers stated, "To the extent that BG&E is not properly allocating costs between distribution service and SOS, the resulting rates are not consistent with the principle of cost causation. For example, if BG&E is allocating no information technology costs to SOS and instead allocating all such costs to distribution service, adjustments are warranted to ensure that BG&E’s cost allocations produce results that resemble a structure in which BG&E is providing SOS on a stand-alone basis."

"The Energy Supplier Coalition also intends to review the Administrative Adjustment proposed by BG&E in compliance with the Commission’s directives in Order No. 87891 on November 17, 2016 in Case No. 9221," the suppliers said

Case No. 9610

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