Regulator Affirms Recovery Of Capacity Costs For Utility Time Of Use Supply Option For Non-Shopping Customers; Clarifies Rate Design

April 1, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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An Illinois Commerce Commission order maintains the design for Commonwealth Edison's electricity supply Rate RTOUPP – Residential Time of Use Pricing Pilot (TOU Pilot), for non-shopping customers, and rejected 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 (details here), RTOUPP provides for a three-part supply rate with price differentiation between super peak, peak and off peak hours.

In its initial 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

On rehearing, the ICC rejected the arguments of ComEd and ICC Staff

Among other things, the rehearing order said of ComEd's flat monthly capacity charge proposal that, "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. In order to send a price signal based on time of use because so much of ComEd’s proposal relies on cost recovery through a fixed line item, ComEd’s proposal relies on an artificial or arbitrary shifting of costs. 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 method to reach this goal."

The rehearing order also clarified 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

Such approach results in the following illustrative super peak and peak rates

  cents/kWh
              Summer    Non-Summer
Super Peak    16.123      14.972
Peak           4.026       4.013

The ICC said, "The Commission agrees with AG witness Rubin that 'the method that comes closest to collecting the energy and capacity costs to serve these customers is the Commission-approved method with prices as calculated in [] AG Exhibit 3.3.' AG Ex. 3.0 on Reh’g at 17. Accordingly, ComEd is directed to implement Rate RTOUPP consistent with this finding."

Dockets 18-1725, 18-1824

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