Retail Choice Regulator Opens Proceeding On "Energy Affordability"; Part Of Modern Grid Investigation

New Rate Designs To Be Examined

Opens Review Of Resource Adequacy In Light Of State's Carbon Goals

Also Opens New Proceedings On AMI, Storage, DERs, EVs

October 10, 2019

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

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The Connecticut PURA has opened a number of specific proceedings as part of a larger grid modernization docket, including a new proceeding on energy affordability for all customer classes in Connecticut

With respect to energy affordability, the Authority’s investigation seeks to: (1) identify the most impactful barriers to increased energy affordability and equity in the state; and (2) potential solutions to those barriers.

The Authority said in an interim decision that it understands the following to be the most impactful barriers to address to achieve increased energy affordability and equity in the state:

Identifying customer eligibility

      • For residential customers: identifying customers eligible for existing programs is difficult as it requires coordination between government and non-governmental entities, raising questions involving data-sharing and customer privacy protocols.

      • For commercial and industrial customers: data on business customers struggling with energy affordability is not currently tracked to the Authority’s knowledge.

Lack of customer education and inter-organization coordination

      • Customers have to visit several websites or locations to find all options for lowering their energy cost burden, including community action, government, energy efficiency, and distributed generation program websites

Rate design

      • Electric rates are often regressive. Other states, including in the New England region, have investigated progressive rate design options to account for a more equitable distribution of costs

Definition of hardship customers and services provided to hardship customers

      • Once identified, hardship customers do not benefit from mandatory, comprehensive education on the options to reduce their energy cost burden

Specific areas are impacted more than others

      • Environmental justice communities are more heavily impacted and communities without access to natural gas heating may be more heavily impacted.

      • In some instances, commercial and industrial customers interconnecting to the distribution grid for the first time or expanding existing load may require distribution system capacity upgrades, thus incurring high costs while delivering benefits to all future load

PURA said that potential solutions to the barriers above include, but are not limited to:

• A common website linking programs and measures to lower customers’ energy cost burden;

• Incentives related to decoupling to encourage the EDCs to educate hardship customer on options to reduce their energy costs;

• Environmental justice community and other heat maps based on types of areas identified above;

• Electric storage-backed microgrids in environmental justice communities;

• Innovative pairings of DERs and current DER programs to avoid or defer distribution system capacity upgrades; and

• Advanced rate design

The energy affordability docket is Docket 17-12-03-RE01

PURA also opened new proceedings on the following topics (Docket 17-12-03 with the following re-opened 'RE' numbers):

Phase II - Beginning in the fourth quarter of 2019

      • RE01 Energy Affordability

      • RE02 Advanced Metering Infrastructure

      • RE03 Electric Storage

      • RE04 Zero Emission Vehicles

      • RE05 Innovative Technology Applications and Programs (Innovation Pilots)

      • RE06 Interconnection Standards and Practices

Phase III - Beginning in the first half of 2020

      • RE07 Non-Wires Alternatives

      • RE08 Resilience and Reliability Standards and Programs

      • RE09 Distributed Energy Resource Analysis and Program Reviews

Phase IV - Beginning at the completion of DEEP’s IRP / a Final Decision in RE01

      • RE010 Building Blocks of Resource Adequacy and Clean Electric Supply

      • RE011 New Rate Design

Concerning resource adequacy, PURA noted in an interim decision that Executive Order 3, signed by Governor Lamont on September 3, 2019, directs DEEP to, "analyze pathways and recommended strategies for achieving a 100% zero carbon target for the electric sector by 2040" in the IRP, in consultation with the Authority.

"Delivering one hundred percent zero carbon electricity would fundamentally change how resource adequacy and reliability are operationally maintained and which bulk power resources provide ancillary services. As directed by EO3, the Authority will consult with DEEP in the evaluation of how a one hundred percent zero carbon goal will effect resource adequacy and reliability in the State and proactively consider approaches to best integrate this future," PURA said

PURA further said, "The Authority will focus on providing guidance and input to the following questions: (1) how will increased renewable energy deployment affect the state and region’s need for increased ancillary services (i.e. flexible load and generation); and (2) what are the state-level solutions for ensuring resource adequacy under these scenarios and for providing zero carbon ancillary services?"

Concerning rate design, PURA said, "The purpose of tiered tax structures based on income level is to more equitably share the tax burden across all income levels. The design is justified by its proponents on the basis that individuals with lower incomes are more heavily impacted by the same tax rate as compared to individuals with higher incomes, given that the same tax rate disproportionately impacts the disposable income and ability to pay of lower income individuals."

"Electric rates are traditionally designed differently. Increased electricity usage is generally charged at the same rate for all customers of a specific customer class. For electric rates, customer class is defined by usage and type of customer (e.g. residential, commercial, or industrial), not by income level. Thus, ratepayers subject to lower income or tight operating margins pay a disproportionate amount of their disposable income on electricity compared with higher income individuals and businesses with the same electricity use," PURA said

"The question of new rate designs more closely aligned with how tax rates are structured is highly nuanced and cannot be considered in a vacuum. While it is a good idea to explore new ways to more equitably distribute costs, the Authority is mindful of the consequences to all other customers of any changes to electric rates. The Authority will seek the knowledge and experience of the EDCs, as well as local and national experts, and leverage any lessons learned from Docket Nos. 17-12-03RE01 and 17-13-03RE11. The Authority will lean on the experience of the OCC, the Limited Income Energy Advisory Board members, the CIEC, and all other representatives of customer classes in the State in investigating and evaluating potential solutions in this reopened docket," PURA said

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