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Texas Retail Providers Oppose CenterPoint-TDU's Proposed Change From Per "Customer" Charge To Per "Meter" Monthly Flat Charges

Parties Contest Transmission Cost Allocation Mechanism

July 10, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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In a brief, the Alliance For Retail Markets has opposed a proposal from CenterPoint Energy Houston Electric, LLC ("CenterPoint" or "CEHE") to change its flat monthly charges (customer charge, metering charge) from a "per retail customer" basis to a "per meter" basis.

Such charges are assessed on retail electric providers, and REPs determine how such costs are reflected in their competitive retail customer rates.

The proposal, exclusively first reported by, was made in CEHE's current rate case

ARM said that 71 Transmission Service customers, 59 Primary Service customers, 452 Secondary > 10kVa Service customers, and 6 Secondary < 10kVa customers -- or approximately 600 total customers -- are currently served by multiple meters assigned to a single ESI ID, although the actual number of additional meters serving those customers does not appear in the record.

"Assuming each of these customers is served by a minimum of one additional meter, however, the proposed per-meter assessment would at least double the Customer Charges and Meter Charges appearing on their monthly bills," ARM said

"In view of those miniscule customer counts, it does not appear any noteworthy customer gaming has occurred during the significant period of time during which CenterPoint has assessed its Customer Charge and Metering Charges on a per-retail customer basis. To the extent any alleged subsidization under the current per-retail customer assessment for the two charges is occurring, it is negligible," ARM said

"What is perhaps more telling is that no other ERCOT TDU currently assesses its Customer Charge on a per-meter basis ... Only one of them -- Texas New-Mexico Power Company (TNMP) -- currently assesses a Metering Charge on a per-meter basis, and it limits the assessment to its Primary and Transmission customers," ARM said

ARM noted that a witness for CEHE expressed concern that the number of customers served by multiple meters may increase and consequently result in a greater level of alleged subsidization unless the current per-retail customer assessment for its Customer Charges and Metering Charges is modified

"The solution to his concern, however, already exists in CenterPoint's Retail Delivery Tariff (Tariff), obviating the need to modify the assessment to a per-meter basis for the purpose of addressing a fairly insignificant legacy issue," ARM said

ARM noted that, in § (Construction Services Policy and Charges), Section 7 of the Tariff, CenterPoint specifies its "Metering Practices", beginning with this statement: "Delivery Service is provided to an individual Retail Customer Premises at only one Point of Delivery, with the Retail Customer's service entrance arranged so that the Company can measure the Retail Customer's service with one meter."

"[T]his provision provides CenterPoint with the authority to condition the installation of a requested additional meter on a retail customer's premises upon the additional meter's assignment to a new and separate ESI ID, as opposed to the existing ESI ID assigned to the initial meter at the premises," ARM said

"In ARM's view, this provision in the CenterPoint Tariff provides a prospective solution to the issue CenterPoint seeks to address through its per-meter assessment proposal. To the extent CenterPoint continues to install requested additional meters on a retail customer's premises and assign them to the same ESI ID for the premises, it only perpetuates the alleged inequity it proposes to remedy by abandoning a long-standing method used by ERCOT TDUs for assessing Customer Charges and Metering Charges," ARM said

In a brief, CEHE said that 99.976% of CEHE's customers take service through a single meter

CEHE said that its proposed change would assure that each customer pays its share of metering and customer service expenses without subsidization by customers with only a single meter. CEHE said that there is greater expense -- both metering costs and customer service costs -- associated with customers who request multiple meters.

Class Allocation Of Transmission Costs

CEHE proposed to use the Company's unadjusted 4CP allocation factor on its distribution system based on the ERCOT peak summer month periods to allocate its capacity-related transmission and distribution costs ("CEHE 4CP").

TIEC and Texas PUC Staff agree that the Company should use a 4CP method but, with regards to capacity-related transmission costs, argue that the Company should use the ERCOT system-wide peak demand ("ERCOT 4CP") instead of the CEHE 4CP

H-E-B prefers a non-coincident peak (NCP) allocation, stating that, "because any 4CP mechanism incentivizes gaming of the system and disproportionately benefits the type of businesses that are able to drastically reduce their load on certain days of the year."

The Texas Competitive Power Advocates supports the allocation of costs on a Non-Coincident Peak (NCP) basis for both transmission and distribution costs, stating that, "NCP cost allocation more equitably allocates costs among the users of the electric grid and better aligns with the market principles of the ERCOT energy-only market which TCPA strongly supports."

REP Bad Debt

The Texas Energy Association for Marketers (TEAM) said that CEHE's application includes a request to the Commission for recovery of a regulatory asset of $1,569,545.02 that CEHE claims as associated with REP "Bad Debt."

TEAM alleged that, "It is important to realize that $1,058,255.07 is associated with CenterPoint's attempt to reverse a credit that was reflected in base rates set in its last rate case. CenterPoint's attempt to essentially perform retroactive ratemaking by attempting to reverse this O&M adjustment and reclaim it in a regulatory asset is not consistent with the Commission's rules or sound ratesetting accounting principles. In the 8 years since its last rate case, CenterPoint has experienced uncollectibles associated with amounts left unrecovered from 3 REPs totaling $511,289.95. This amount is contrary to [CEHE] testimony that REP Bad Debt experienced by CenterPoint was "significant." CenterPoint's lack of precision when it comes to treatment of REP Bad Debt is further exhibited in the fact that the Company filed its case with knowingly inaccurate allocation of this cost."

Timing Of Rate Changes

In separately filed briefs, ARM and TEAM reiterated customary REP concerns related to the timing of rate changes once approved, due to EFLs and other compliance issues

"TEAM is concerned with the timing of the rate changes approved in this proceeding. Consistent with Commission precedent and other Commission rules, TEAM requests that the REPs be afforded at least 45 days prior notice of the final rates that will are approved before they become effective," TEAM said

In addition to a 45-day notice, ARM requested that the effective date of the new rates coincide with the first day of a CenterPoint monthly billing cycle

ARM further requested that the effective date of the new rates align with another CenterPoint rate change, if possible, to facilitate greater efficiency in the recalculation of EFL pricing disclosures.

Docket 49421

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