Proposed Rehearing Order Addresses Recovery Of Capacity Costs For Utility Time of Use Supply Option For Non-Shopping Customers

February 24, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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A proposed order from an Illinois ALJ would maintain the design for Commonwealth Edison's electricity supply Rate RTOUPP – Residential Time of Use Pricing Pilot (TOU Pilot), for non-shopping customers, rejecting requests on rehearing to modify the recovery of capacity costs

As more fully discussed in our prior story on the ICC's approval of the pilot, RTOUPP provides for a three-part supply rate with price differentiation between super peak, peak and off peak hours.

In its order adopting a modified version of the pilot, the ICC rejected ComEd's proposal to include a non-volumetric monthly capacity charge as part of RTOUPP, and instead required that capacity costs shall be included in the time-varying energy supply rate (kWh) for the Peak and Super Peak periods, in both the summer and nonsummer periods.

On rehearing, ComEd and ICC Staff argued that capacity costs for RTOUPP customers should be recovered as a separate monthly line item based on each individual customer’s kW-based capacity obligation

An ALJ would reject the arguments of ComEd and ICC Staff in a proposed order on rehearing

"As proposed by ComEd, Rate RTOUPP would have minimal price differentiation between periods and instead rely on the hope that customers will understand how their usage could impact their Capacity Charge and reduce their usage during unknown periods when there might be a ComEd or PJM system peak. This does not serve the purpose of a TOU rate, in the Commission’s view. The goal of a TOU rate is to encourage customers to alter their usage patterns – and not just during unknown times when ComEd’s capacity costs from PJM may be impacted. Clear price differentiation is the most expedient manner to reach this goal," the proposed order states

"Staff also argues that the Commission’s decision in the October 2019 Order is improper because ComEd incurs capacity costs on a per kW basis, but the Commission’s decision would recover the costs from customers on a per kWh basis. Again, the Commission finds this to be an erroneous understanding of the cost causation principle, which speaks to who should pay, not how they should pay. In addition, the AG points out that ComEd calculates a customer’s capacity obligation based on metered usage, which is based on kWh, not kW demand. Thus, this argument also does not support overturning the Commission’s prior decision," the proposed order states

The proposed order also clarifies how the capacity costs should be incorporated into the per kWh rates, with the majority allocated to the super peak kWh rate, and a smaller portion to the peak rate, for both the summer and non-summer periods

The proposed order endorses a methodology presented by the Illinois Attorney General in a rehearing exhibit, which produced the following: illustrative super peak and peak rates

  cents/kWh
              Summer    Non-Summer
Super Peak    16.342      15.175
Peak           4.157       4.016

Dockets 18-1725, 18-1824

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