Illinois Approves Time Of Use Supply Rate Pilot At ComEd, With Capped Number Of Customers

Authorizes Reconciliation Charge For TOU Customers

Denies Relief Concerning Retail Supplier AMI Settlement & Data Access, But Requires Staff Report On Barriers To Retail Supplier TOU Plans

October 2, 2019

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

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The Illinois Commerce Commission has approved 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 originally proposed, provided for a three-part supply rate with price differentiation between super peak, peak and off peak hours. The RTOUPP pilot is separate from ComEd's real-time pricing supply program

In adopting a modified RTOUPP pilot, the ICC limited ComEd's pilot RTOUPP to 1,900 customers.

Rate RTOUPP will 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. Reversing an ALJ's proposed order, the ICC will not prohibit low-income customers from participating in RTOUPP

Furthermore, the ICC did not authorize bill protection for any customers electing RTOUPP, low-income or otherwise. A proposed order would have provided that low-income customers electing Rate RTOUPP were to be provided with bill protection, which would have guaranteed that such low-income customers pay no more under Rate RTOUPP than they would have paid under the standard fixed price default service

"The Commission has considered all positions with respect to bill protection and finds that bill protection for low-income consumers is unnecessary in this instance," the ICC said

Addressing concerns about low-income customers' experience under RTOUPP and their potential to pay more than Standard default service, the ICC said, "The Commission finds that a more equitable solution to the AG’s concerns is to ensure that ComEd invests in thorough marketing, education and outreach to all potential TOU customers."

"Therefore, and to address these concerns, the Commission directs ComEd to invest in and develop a marketing, education and outreach strategy regarding how enrollees can best manage their electricity bills and how charges are calculated under RTOUPP, while ComEd continues to assess program enrollment and behavior," the ICC said (further issues concerning marketing and customer education are discussed below).

Concerning the adopted 1,900 customer cap for the pilot Rate RTOUPP, the ICC said that this participation cap is appropriate because, "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."

"However, the Commission also recognizes the need to remain flexible while studying time of use rate design and offerings. Therefore, the Commission directs ComEd to return before the Commission should enrollment or other factors arise that could negatively impact the statistical significance of the study," the ICC said

In terms of rate design, the ICC rejected ComEd's proposal to include a non-volumetric monthly capacity charge as part of RTOUPP, and is instead requiring that capacity costs shall be included in the time-varying energy supply rate for the Peak and Super Peak periods, in both the summer and nonsummer periods.

RTOUPP will 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 will 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.) will 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 will 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.

RTOUPP customers will also be subject to a transmission charge (PJM Services), a miscellaneous procurement charge, and a capped Purchased Electricity Adjustment Factor (reconciliation)

Concerning capacity costs, the ICC said that having a flat capacity charge would confuse customers, while including capacity costs in the Super Peak and peak volumetric energy supply rates would align with the goal of determining how customers respond to actual cost-based TOU rates, as well as the goal of encouraging customers to use energy during off peak hours.

In terms of allocating capacity costs to the volumetric Super Peak and Peak energy supply rates, the ICC said, "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 ICC said that a separate fixed capacity charge would distort the true cost to the ratepayer of their usage, especially since a customer's capacity responsibility in PJM's capacity market is established based on a customer's peak usage in the prior year.

"The Commission ... 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 ICC said.

Concerning the PEA reconciliation factor, the ICC approved ComEd’s proposed design and said that the PEA, "is a reasonable method of reconciling actual costs of energy supply with the revenues generated by Rate RTOUPP customers."

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

The Illinois Competitive Energy Association (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 alternative retail electric supplier (ARES) product than they are, ICEA had said

The ICC did state that, "The Commission agrees with ICEA, however, that the PEA will make it difficult to compare Rate RTOUPP to both ARES’ rates and ComEd’s Rate BES [standard default service]."

The ICC noted that, under the supply charges listed on a customer’s bill, an RTOUPP customer will have the following charges: 1) TOU electricity charges – Super Peak, Peak, and Off Peak; 2) PJM Services Charge; 3) Miscellaneous Procurement Components Charge; and 4) 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 currently included on customer bills does not include the PEA. This leads the Commission to be more confident that the decision to limit enrollment is appropriate," the ICC said

The ICC also directed ComEd, "to undertake marketing efforts in its billing designed to clearly designate the differences between Rate RTOUPP and Rate BES both with and without the PEA, to the extent that information and data is known and available."

Further addressing concerns about potential bill impacts for RTOUPP participants, the ICC said, "in an effort to address such concerns, the Commission directs ComEd to invest in and develop a marketing, education and outreach strategy regarding how enrollees can best manage their electricity bills and how charges are calculated under RTOUPP, while ComEd continues to assess program enrollment and behavior."

Furthermore, the Commission directed ComEd to give customers the option to receive alerts when conditions may cause high usage in order to further customer education and enable customers to better control their costs.

Additionally, the monthly bills paid by each customer enrolled in Rate RTOUPP shall be evaluated at the end of the first 12 months of enrollment (or a shorter period if a customer leaves Rate RTOUPP), to determine whether they saved money over the course of the 12-month period, in comparison to Rate BES [standard default service]. If the customer paid more for electric service as a result of enrollment in Rate RTOUPP over the 12-month period, ComEd will disclose that to the customer and offer education around behavior and other enrollment options, the ICC directed

The ICC generally approved ComEd's marketing plan. While RTOUPP will be open to all customers and generally marketed, The ICC noted that 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," the ICC noted

"Therefore, with respect to ICEA’s 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 ICC said

The ICC dismissed concerns raised by ICEA relating to negative impacts on the competitive retail market from RTOUPP, due to different disclosures required by retail suppliers for rate increases and historic rates, and due to different regulations governing access to customer AMI data by retail suppliers, versus the rules applicable to ComEd.

"[B]ecause 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 ICC said

"The Commission rejects ICEA’s recommendation to open an investigation into making AMI interval data the standard for ARES billing and settlement. Existing Commission orders govern the scope and manner of ARES access to customers’ interval data, and ICEA presented no evidence or argument in this proceeding that would support a conclusion different from that in Docket Nos. 13-0506 and the ARES Data Access Order. Rate RTOUPP has no impact on ARES’ ability to access customer data," the ICC said

"Also, the Commission agrees with Staff that if greater access to AMI interval data is desired, the proper recourse is to the General Assembly. Whether ARES suffer other barriers to entry, however, can be brought to the attention of Staff," the ICC said

"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 ICC ordered

The Commission rejected ICEA’s recommendation to require ComEd to comply with Sections 412.165(f) and (g) of the Commission’s rules, which require ARESs to post on their website information about actual historical prices charged under variable rates, and mail customers notice of changes in rate design that are likely to lead to an increase of 20% or more in their supply bills.

"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 ICC said

ComEd plans to begin enrollments in Rate RTOUPP in June 2020

Docket 18-1824 et al.

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