Retail Supplier Raises Concerns With Utilities' Plan To Compel Retail Suppliers To Transfer Certain PJM Price Responsive Demand Credits To Utilities

September 16, 2019

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

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WGL Energy Services, Inc. has filed comments with the Maryland PSC raising concerns about implementation of proposed tariffs from Baltimore Gas and Electric, Pepco, and Delmarva to establish a process by which retail electric suppliers must transfer, to the utility, credits, which the suppliers receive from the PJM Interconnection, LLC (PJM), that are associated with each utility's participation in the PJM capacity market as a price responsive demand (PRD) resource.

The EDCs' filing of tariffs to require the transfers of such credits to the utilities had been exclusively first reported by EnergyChoiceMatters.com (see our prior story for the rationale)

As previously reported, the EDCs proposed that the EDCs and each supplier execute a Billing Line Item Transfer (BLIT) with PJM that would cause PJM to transfer the financial credits associated with the EDC's PRD resource from the third-party supplier’s PJM bill to the EDC's PJM bill.

WGL Energy said of the proposal that, "To ensure that the transfer process is most efficient and transparent, WGL Energy recommends the Utilities be required to implement EDI identifiers that will enable suppliers to flag customers suppliers are serving that are participating in a utility load management program. WGL Energy further recommends that the Utilities be directed to prepare monthly reports that will enable retail suppliers to validate the PRO credit amounts with each transfer to each Utility."

WGL Energy said, "The PJM credit transfer process proposed by the Utilities would create new barriers for retail electricity suppliers in competitive electricity supply markets because of the higher costs they will incur as a result of the additional financial reviews required to validate PJM invoices. In addition, a supplier may have other customers participating on PRO or other PJM Demand Response programs and any monthly credit transfer would need to be reviewed for accuracy prior to transfer. Therefore, WGL Energy makes the following recommendations to ensure greater transparency and accountability among all the stakeholders involved."

WGL Energy specifically recommended the following:

(1) EDI identifiers should be implemented in order to flag customer participation in a load management program.

"As utilities in general control the Electronic Data Interchange ('EDI') information on enrollments, not all the Utilities have EDI data identifiers in place that inform the retail supplier whether a customer is participating in a load management program. A retail supplier would not under normal circumstances know whether the customer is participating in the program. Of the three Utilities that filed proposed revisions to their tariffs, BGE is the only utility that currently notifies suppliers in the enrollment response (sent via EDI) whether a customer has appliances (e.g., an air conditioner and/or water heater) that is on a load management program (i.e., BGE's PeakRewards program). However, Pepco and Delmarva do not have any EDI notifier systems set up to inform the supplier. In such a scenario, suppliers on behalf of the Utility, would have to reach out to the customer directly to obtain such information. This would be highly burdensome and costly for the supplier. Therefore, WGL Energy recommends that the Commission require the utilities (Pepco and Delmarva) to implement EDI notification systems prior to their implementation of their tariff revisions," WGL Energy said

(2) WGL Energy recommends monthly EDC validation of PRO credit transfers

"If the BLIT process is approved, suppliers will further incur additional monthly costs to reconcile the BLIT and to validate the accuracy of PRO credit transfers to the Utility. In any given month, a supplier may have up to hundreds of residential customer enrollments and terminations. The frequency of residential customer migration into and out of supplier contracts will result in suppliers having to establish new internal controls and having to dedicate increased labor hours to carry out these validation efforts. WGL Energy strongly urges the Commission to direct the Utilities to establish a mechanism whereby the Utilities will provide monthly reports to retail electricity suppliers that will enable the suppliers to validate the accuracy of each month's credit transfers. At a minimum, the monthly report should include a list of the supplier's customers active in the PRO program, calculations supporting the transfer dollar amount, and a reconciliation process that allows for corrections of prior month errors," WGL Energy said

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