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PSC Staff Recommends Marginally Higher Bypassable SOS Administrative Adjustment At BGE
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In rebuttal testimony, Staff of the Public Service Commission of Maryland have filed an updated recommendation for the bypassable electricity SOS Administrative Adjustment at Baltimore Gas & Electric, with the rates marginally higher than Staff's initially proposed rates
Citing a prior PSC order, Staff said that SOS Administrative Adjustment should include two elements; 1) the incremental costs SOS causes BGE to incur as well as 2) a proxy for customer costs that retail suppliers incur beyond those identified as incremental SOS costs that are currently in BGE distribution rates.
As a result, a witness for Staff said that, "I propose that any directly identifiable incremental SOS costs in BGE distribution rates be assigned to the SOS Administrative Adjustment. BGE embedded costs that are similar to those that retail suppliers incur beyond those identified as incremental costs should be allocated based on revenue."
Staff's testimony delineated several areas where BGE had not proposed to assign costs to SOS since there was no incremental SOS cost related to such activities, but which Staff said should be partially allocated to SOS because the costs are similar to costs that are incurred by retail suppliers. It is these additional costs, which were not included in Staff's original recommendation, which have led to a slightly higher proposal for the SOS Administrative Adjustment rates. At the time of its original recommendation, Staff said that it had not yet conducted a full review of all costs BGE separates between the electric distribution and SOS functions
Staff said that the costs that are best characterized as non-incremental but which are incurred by retail suppliers, and currently recovered in BGE distribution rates, include billing system depreciation and amortization expenses, billing costs, credit and collections costs, and call center costs
In addition to regulatory, legal, and accounting SOS costs, Staff also said that a portion of the following expenses should be included in the SOS Administrative Adjustment, either based on actual incremental costs, or based on an allocation of revenue between SOS and distribution service:
• FERC Account 909 Informational and Instructional Advertising Expense
• FERC Account 910 Miscellaneous Customer Service and Informational Expense
• Additional FERC Account 920 Administrative and General Salaries
• FERC Account 921 Office Supplies and Expenses
• FERC Account 923 Outside Services Employed
• FERC Account 930.2 Miscellaneous General Expenses
• General Plant Deprecation Amortization FERC Account 391
As a result, Staff proposed the following levels for the SOS Administrative Adjustment
For comparison, Staff had originally recommended the following lower amounts for the SOS Administrative Adjustment. At the time of its original recommendation, Staff said that it had not yet conducted a full review of all costs BGE separates between the electric distribution and SOS functions
For further comparison, BGE has proposed to set the bypassable SOS Administrative Adjustment at 1.00 mill per kWh, for all of BGE’s SOS customer classes, after BGE provided a cost of service study finding that the costs included under the SOS Administrative Adjustment at 0.99 mills per kWh
For further comparison, a coalition of retail suppliers has recommended setting the SOS Administrative Adjustment as follows:
In initial testimony, OPC opposed the BGE proposal
Other parties also filed rebuttal testimony furthering their positions. A witness for BGE, in opposing the energy supplier coalition's (ESC) proposal, said, "In response to ESC’s implication, I assert unequivocally that in no way has BGE tried to keep SOS prices artificially low in order to take advantage of any perceived incentive to retain SOS customers. On the contrary, and as cited in ESC’s own testimony, BGE was on record in Case No. 9221 advocating strongly for an Administrative Adjustment -- that is, one that results in a market price for SOS. To that end, BGE prepared a COSS that results in a reasonable Administrative Adjustment level for all customer classes."
Case 9610
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October 2, 2019
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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
Updated
Staff Recommended SOS Administrative
Adjustment Rates By SOS class
mills per kWh
Residential 1.37
Type I 1.17
Type II 0.46
Hourly 0.33
Original
Staff Recommended SOS Administrative
Adjustment Rates By SOS class
mills per kWh
Residential 1.11
Type I 0.95
Type II 0.40
Hourly 0.28
Coalition Recommended SOS Administrative
Adjustment Rates By SOS class
mills per kWh
Residential 11.82
Type I 21.06
Type II 21.06
Hourly 21.06
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