Utilities Respond To Retail Supplier Requests As Part Of Proposed Load Shaping Pilots

November 25, 2019

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

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The Maryland utilities have filed responses with the PSC in response to various requests made by retail electric suppliers made in response to an RFP for load shaping pilots

As first reported by EnergyChoiceMatters.com, BGE reported that it received three bid proposals from two retail suppliers -- two proposals submitted by Inspire Energy Holdings LLC [sic], and one proposal submitted by Constellation.

Pepco received two bids from one retail supplier: Inspire, Inc. [sic]

Most details of the suppliers' proposals were filed under seal

Responding to direction from the PSC, the utilities filed the following responses concerning various requests that would be made upon the EDCs under the proposed programs from the suppliers

Pepco Response:

"Pursuant to the Maryland Public Service Commission's ('Commission') November 13, 2019 letter order issued in this proceeding, Potomac Electric Power Company ('Pepco') submits this additional information relating to the two bids that it received from Inspire Energy Holdings, LLC ('Inspire') in response to the Request for Proposals Pepco issued on July 12, 2019.

"The Commission first noted Inspire's statement that Inspire would require 'basic customer information' during in-person solicitations, such as customer names, addresses, and customer choice IDs. The Commission requested that Pepco identify whether it could fulfill this request, and estimate any additional costs required to do so. Pepco is not presently able to fulfill this request for two reasons. First, Pepco does not currently have a customer list that it can provide to suppliers. However, Pepco is participating in the PC 44 Competitive Markets and Customer Choice Working Group, and the issue of utilities providing this type of information to third party suppliers is currently being considered. Pepco estimates that the cost to create such a list would be less than $25,000. Second, as Pepco noted in its October 15, 2019 comments on the Inspire bids, Pepco's Supplier Coordination Tariff prohibits Pepco from providing specific customer information to Inspire without customer consent. Specifically Section 16.2 of Pepco's Supplier Coordination Tariff provides as follows:

"Customer-Specific Information. The Company will not provide to the Electricity Supplier Customer-specific information, without the Customer's written consent, except for information as allowed by the Commission for bill collection or credit rating reporting purposes or pursuant to Section 7.1 and 7.2 of this Tariff. The Electricity Supplier shall keep all such Customer-specific information supplied by the Company confidential unless the Electricity Supplier has the Customer's written authorization to do otherwise.

"Consequently, Pepco would need to obtain written consent from each and every customer whose information was to be provided to Inspire. This would be a significant undertaking because it would most likely be a manual process to draft, issue letters to all of Pepco's Maryland customers, and to consolidate the responses. At this time, Pepco is unable to provide an estimate for the cost to implement such a process.

"The Commission also directed Pepco to provide an estimate of the costs for The Brattle Group or another selected contractor to perform any necessary Evaluation, Measurement and Verification ('EM&V') related to Inspire's proposals. The Brattle Group estimates that the EM&V costs would be in the range of $125,000-$175,000 per year, subject to the final design of the pilot."

BGE Response:

"Baltimore Gas and Electric Company ('BGE' or the 'Company') submits these comments in response to the Maryland Public Service Commission’s (the 'Commission') November 13, 2019 letter requesting additional information related to the requested ratepayer support in the 'Constellation Proposal for MD PC44 Rate Design Load Shaping RFP' dated August 26, 2019 ('Proposal').

"Estimated Requested Ratepayer Support for Awareness Marketing

"Constellation’s Proposal requests awareness marketing using BGE marketing channels, including the EmPOWER efficiency programs, two bill inserts during the recruitment period, BGE customer portal, and the BGE call center. The Proposal is unclear to what extent BGE resources would be relied upon and therefore BGE is unable to provide specific cost estimates. There may be certain marketing channels that could be leveraged with minimal costs and resources, but the Company would require further details in order to provide more accurate cost estimates.

"BGE uses multiple marketing channels for EmPOWER marketing including tv, radio, print, and email. As part of the Company’s EmPOWER program, the Commission reviews and approves marketing budgets for future years. Therefore, any changes in BGE’s marketing plan as a result of this Proposal would need to fit within the already set budget. Any inclusion of Constellation’s Proposal within BGE’s EmPOWER marketing would need to be cohesive with BGE’s marketing of EmPOWER programs and should be for programs that directly contribute to the 2% reduction in electricity usage EmPOWER goal. BGE notes that the Proposal may, but may not, align with the goals of the EmPOWER program and BGE’s associated marketing programs. Therefore, there may be an opportunity cost to yielding available EmPOWER marketing resources which could impact the overall achievement of EmPOWER goals if the supplier pilot program is not directly contributing to the goal of 2% reduction in electricity usage.

"Constellation’s Proposal also requests marketing through two bill inserts within the three-month recruitment period. Currently, BGE is able to provide bill inserts to all electric residential customers, but is unable to send bill inserts dependent on third party supplier statuses or any other customer identifier, such as a subset of customers who might be invited to participate in a supplier pilot. Therefore, if the Proposal is to market to only a selected sample group, BGE is unable to provide a bill insert specific to that group. However, sending bill inserts to all electric residential customers may impact the ability of the Proposal to produce statistically significant results, depending on what the pilot is designed to learn. If the Company were directed to include bill inserts, a general bill insert sent to all electric residential customers costs about $10,000. If the Company were directed to provide bill inserts to a subset of customers, there would need to be a significant reconfiguration of the current procedures, including IT changes. Thus, the Company has not been able to provide an exact cost estimate to include in these comments.

"Constellation’s Proposal also requests marketing through BGE’s customer portal. Again, it is unclear what aspects of and to what degree BGE’s website would be used by Constellation’s Proposal. The associated cost and IT resource levels would be dependent on the details of the Proposal, and therefore, cannot be provided at this time. However, BGE would note that the Company’s website includes a banner on the homepage which could be updated to include a reference to an external link to a supplier pilot site at a minimal cost. The Company also notes that, similar to the bill insert, this cannot be tailored to any subset of customers and would thus be effectively marketing the supplier pilot to the entire BGE customer base. To the extent that the Proposal would require marketing to a subset of customers, this may also affect the ability to produce statistically significant results.

"As it is unclear which sections of the Company’s website are referenced or the details of what would be included in the Proposal, the Company is unable to provide specific cost estimates. Integration of marketing material into certain sections of the Company’s website could require different levels of cost and resources support. For example, to the extent that the program would include any marketing within a customer’s login page or any other secure page, there may be additional IT time and resources required.

"Constellation’s Proposal also requests an unknown level of support from BGE’s call center. The training and resource costs would be dependent on the details and level of support requested by Constellation. However, as the Proposal states that the Constellation call center would handle all enrollments, the Company would expect minimal resource costs associated with the additional time to handle and redirect calls to Constellation. Additionally, in that situation, BGE call center representatives would not require significant training but could be trained with a general knowledge about the Constellation proposal, sufficient to allow them to speak to customers about the pilot prior to redirecting the calls to the Constellation call center.

"Additionally, as previously noted in the Company's October 15, 2019 comments on the Proposal, if Constellation's bid is accepted by the Commission, a waiver of COMAR 20.40.02.01B (4), which prohibits a utility from engaging in promotions, marketing or advertising with a core or non-core service affiliate, would be required.

"Estimated Evaluation, Measurement, and Verification ('EM&V') Costs

"Finally, the Brattle Group has estimated the EM&V costs associated with Constellation's Proposal to be between $125,000 and $175,000 per year, subject to the final approved design of the program.

"BGE will hand deliver an original and 12 copies by noon on the next business day in accordance with Commission guidelines for electronic filing. The Maillog number assigned to this filing will be indicated above for your reference."

PC 44

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