Illinois ALJ Would Approve ComEd's Proposed Time Of Use Supply Rate Pilot, With Capped Number Of Customers, Under Proposed Order

Low-Income Customers Would Receive Bill Protection Under TOU Pilot

Draft Order Would Allow Reconciliation Charge For TOU Customers

ALJ Would Deny Relief Concerning Retail Supplier AMI Settlement & Data Access, But Would Require Staff Report On Barriers To Retail Supplier TOU Plans

August 16, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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An Illinois ALJ would approve a modified version of Commonwealth Edison's proposed electric supply rate Time of Use program for non-shopping customers.

ComEd's proposed Rate RTOUPP – Residential Time of Use Pricing Pilot (TOU Pilot) had been exclusively first reported by EnergyChoiceMatters.com last year, and as proposed provides for a three-part supply rate with price differentiation between super peak, peak and off peak hours. The pilot is separate from ComEd's real-time pricing supply program

In a proposed order, an Illinois Commerce Commission ALJ would limit ComEd's pilot RTOUPP to 1,900 customers. The ALJ cited, in part, the fact that there was no evidence as to whether or not ComEd’s offering of the RTOUPP rate would harm competition as supporting a limit on total participation.

"With respect to whether Rate RTOUPP should be limited in size, as proposed by Staff, the Commission adopts Staff’s proposal. The Commission agrees that because it is being presented as a pilot, it should be limited in size to that which is necessary to study it. In addition, there is no evidence of whether or not ComEd’s ability to offer Rate RTOUPP will harm competition, which is further justification for limiting the size of the pilot," the proposed order states

Apart from the cap on total participation, Rate RTOUPP would be available to any residential retail customer who is taking electric service from ComEd, has an AMI meter capable of providing interval usage data, does not have parallel generation facilities, and elects to participate.

The ALJ would not bar low-income customers from participating in Rate RTOUPP. However, the ALJ would order that low-income customers electing Rate RTOUPP be provided with bill protection, which guarantees that such low-income customers pay no more under Rate RTOUPP than they would under the standard fixed price default service. Low-income Rate RTOUPP customers who end up paying more under Rate RTOUPP would be refunded the difference between Rate RTOUPP and the default rate, under the proposed order

Summarizing ComEd's position with respect to marketing of the program, the proposed order states, "ComEd states that it intends to market Rate RTOUPP to a randomly selected representative sample of eligible customers taking service under Rate BES [fixed price default service], but will target-market the program to eligible customers it identifies as owners of electric vehicles in order to enroll a sufficient number of those customers to conduct an analysis of whether Rate RTOUPP incentivizes electric vehicle owners to charge their vehicles in the Off Peak Period."

During the proceeding, ComEd said that it would not evaluate a customer's AMI data to target customers for Rate RTOUPP

The proposed order states, "It appears that the only customers that will be targeted by ComEd are those with electric vehicles. No other ratepayer group will be targeted nor will ComEd use AMI data to target certain customers that from their usage appear to be likely to save on Rate RTOUPP. Therefore, with respect to ICEA’s [Illinois Competitive Energy Association] concern about the use of AMI interval data in marketing Rate RTOUPP, the Commission finds that ComEd has explained it does not plan to market Rate RTOUPP using AMI interval data to identify customers with any particular usage profile. The Commission adopts ComEd witness Fruehe’s proposal in surrebuttal that ComEd will not use AMI interval data to directly market to customers with advantageous load profiles."

The proposed order would grant ComEd’s requested temporary revisions to its Integrated Distribution Company Implementation Plan to allow ComEd to market Rate RTOUPP to customers, inform them of the benefits, and raise overall awareness for the pilot.

Concerning the rate structure for Rate RTOUPP, the proposed order would reject ComEd's proposal to include a non-volumetric monthly capacity charge, and would instead require capacity costs to be included in the time-varying energy supply rate for the Peak and Super Peak periods, in both the summer and nonsummer periods.

ComEd had proposed that the RTOUPP include fixed supply prices for three separate periods with pricing being the highest from 2 p.m. to 7 p.m. (Super Peak Period) every day. The lowest price period would be from 10 p.m. to 6 a.m. (Off-Peak Period), and the remaining period (6:00 a.m. to 2:00 p.m. and from 7:00 p.m. to 10 p.m.) would be the intermediate pricing (Peak Period), with the fixed pricing also differentiated between summer (June, July, August and September) and non-summer periods.

The supply prices for the three periods would be developed based upon historical real time supply prices with slight adjustments to create a higher differentiation between the three periods but still remain revenue neutral on average.

As originally proposed by ComEd, RTOUPP customers would also be subject to a monthly capacity charge, a transmission charge (PJM Services), a miscellaneous procurement charge, and a capped Purchased Electricity Adjustment Factor (reconciliation)

Aside from rejecting the monthly capacity charge in favor of reflecting capacity costs in the volumetric Peak and Super Peak energy price (in both the summer and nonsummer periods), the proposed order would adopt the proposed pricing structure for RTOUPP

The proposed order notes that, "It appears that when considering all the peaks - beginning with 2012 peaks (used for calculation of 2013 Capacity Charges) through the 2018 peaks (used for calculation of 2019 Capacity Charges) - that 8.5% of PJM and ComEd peaks are out of the agreed-to Super Peak Period (from 2 p.m. to 7 p.m.) and fall in the Peak Period instead."

"ComEd’s capacity costs should similarly be recovered from customers in these proportions," the proposed order provides

The proposed order would conclude that including capacity costs in the volumetric Super Peak energy price would accomplish an additional goal of Rate RTOUPP -- to encourage customers to use energy during off peak hours -- more than the flat monthly capacity charge would.

Concerning the proposed flat monthly capacity charge, the proposed order would find, "The Commission disagrees and finds it just as reasonable to assume that customers will never make the connection between a fixed Capacity Charge on their current bill to their usage during a few peak hours the summer before."

The proposed order would adopt ComEd’s use of the PEA for reconciliations. ICEA had argued that reconciliations via the PEA mean that the pricing under the TOU energy rates aren't reflecting the true costs to customers which would harm retail suppliers. For example, if the PEA is consistently a charge, the advertised ComEd TOU rates will appear more competitive vis-à-vis an ARES product than they are, ICEA had said

The proposed order would find that, "The PEA is a reasonable method of reconciling actual costs of energy supply with the revenues generated by Rate RTOUPP customers."

The proposed order would adopt ComEd’s proposal for a cap of ±0.5 cents/kWh cap for the PEA, to ensure that the PEA does not result in unreasonable variation in customers’ charges

The proposed order would agree with ICEA, however, that the PEA will make it difficult to compare Rate RTOUPP to both ARES’ rates and ComEd’s Rate BES (fixed price default service). Under the supply charges listed on a customer’s bill, a RTOUPP customer will have the following charges: 1) TOU electricity charges – Super Peak, Peak, and Off Peak; 2) TOU PJM Services Charge; 3) TOU Miscellaneous Procurement Components Charge; and 4) TOU PEA charge. All these components make up a supply charge that would need to be compared to an ARES’ quoted kWh price. To further cause customer confusion, ComEd’s price to compare, as included on customer bills does not include the PEA, the ALJ noted

"This leads the Commission to be more confident that the decision to limit enrollment is appropriate," the proposed order states

The proposed order rejects specific relief sought by ICEA concerning retail supplier access to AMI data. However, the proposed order would require ICC Staff to file a report on the issue

"As noted above, there is no evidence yet regarding the impact Rate RTOUPP will have on competition, but the Commission shares ICEA’s disappointment regarding the lack of ARES TOU products. However, because Rate RTOUPP does not alter the manner in which ARES access customer data, the Commission finds that ICEA’s arguments concerning data access barriers to ARES TOU products are outside the scope of this proceeding. For these reasons, the Commission rejects ICEA’s recommendation that Rate RTOUPP should not be put into effect until after the Commission has concluded an investigation concerning the barriers to ARES TOU products. The fact that Rate RTOUPP is a pilot designed to develop information about TOU rates that would benefit stakeholders, the Commission finds that it would be unreasonable to prevent Rate RTOUPP from taking effect pending further investigation," the proposed order states

"The Commission recognizes that it has a statutory obligation to promote the competitive retail market. Although the Commission has already ruled on ARES access to interval data, the Commission strongly urges ICEA and other interested stakeholders to provide information to Staff regarding other competitive barriers to ARES offering TOU products. The Commission directs Staff to prepare a report that will inform future Commission actions," the proposed order states

The proposed order would reject ICEA’s recommendation to open an investigation into making AMI interval data the standard for ARES billing and settlement.

The proposed order would also reject ICEA’s recommendation to require ComEd to comply with the variable rate customer notice requirements applicable to retail suppliers under Sections 412.165(f) and (g) of the Commission’s rules.

"ICEA itself acknowledged that these rules do not apply to ComEd, and the Commission is not persuaded that compliance with these rules would provide any incremental benefit to customers. To the extent that ICEA believes these rules are unreasonably burdensome on ARES, this is not the proper proceeding to address amendments to the Commission’s ARES rules," the proposed order states

Under the modifications proposed by the ALJ, the proposed order would provide that, "The Commission finds that the record in this proceeding demonstrates that Rate RTOUPP, as modified herein, is just and reasonable."

"The Commission further finds that Rate RTOUPP will make the benefits of time-variant rates available to residential customers in a manner that involves less price risk than hourly or real-time pricing. The time-sensitive rates will be based on historic prices which will be designed to encourage users to shift their load. Load-shifting has the potential to lower individuals’ bills and has potential benefits for the grid and the environment," the proposed order states

Once approved, ComEd plans to begin enrollments in Rate RTOUPP in June 2020. The pilot is to last four years.

Docket 18-1824 et al.

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