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To Comply With Dynamic Pricing Directive, Utility (SOS Provider) Proposes Critical Peak Rebate Program Available To Distribution Customers

April 24, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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Pepco has filed with the District of Columbia PSC a "strawman" proposal to implement a directive to offer dynamic pricing, proposing a critical peak rebate program open to all residential distribution customers

Pepco's critical peak rebate program for D.C. would largely mirror its program already in place in Maryland, and would be known as the Peak Energy Savings Credit (PESC) Program.

"The Company [Pepco] will recommend to the RDWG [Rate Design Working Group] that a Critical Peak Rebate dynamic pricing rate be established and be applicable to all District of Columbia Pepco residential distribution customers," Pepco said

Pepco proposes that all residential customers be automatically included in the critical peak rebate program, unless such customer is already participating in a retail supplier's dynamic pricing plan or program, in which case the customer would not be eligible for Pepco's program

"Pepco customers who accept their electric supplier’s dynamic pricing offer, or an offer from a Curtailment Service Provider ('CSP'), which has been monetized in the PJM market(s) or directly tracks PJM market prices, must be removed from the applicable utility dynamic pricing tariff to avoid any double counting and double payment of demand reductions. Under this proposal, it is assumed that PJM will rely on an approach for mass market customers that is similar to its existing approach for larger nonresidential customers. Specifically, the alternative supplier or CSP must first contact PJM in order to attempt to monetize load reductions into the PJM markets. PJM then works directly with the distribution utility to confirm the individual customer’s eligibility to participate in the third-party program," Pepco said

Pepco proposes to begin educating all of its District of Columbia residential distribution customers about the PESC Program during the second quarter of 2021 and will place all residential customers on the rate beginning on June 1, 2021.

For the critical peak rebate, Pepco recommends applying the same rebate rate established by Pepco, Delmarva Power, and BGE in Maryland -- $1.25 per kWh reduced to avoid customer confusion and simplify customer education efforts.

There would be no penalty if a customer’s usage is above the CBL.

The program would operate throughout the year. However, Pepco does not anticipate typically calling savings events outside of the summer

Pepco proposes that the applicable times mirror the current PJM market rules regarding demand response resources that are placed into the PJM capacity market. Therefore, the Company proposes that for PJM-declared emergencies, the available Peak Savings times match the required PJM times. Events may take place at any time during the year but are most likely to take place during the noon to 8 pm period on summer weekdays. Typically, Pepco Maryland and District of Columbia dynamic pricing events will occur at the same time, but different activations could occur in response to localized grid conditions or program testing needs. There may also be days when start and end times differ.

Pepco recommends that Peak Savings events be called for a minimum of four days per summer season to keep customers conditioned to responding whether or not the events are required by PJM or necessary based upon local grid conditions. Pepco anticipates that it will call a minimum of four and a maximum of fifteen Peak Savings events per summer.

Pepco would notify customers of an anticipated Savings Event by 9 p.m. on the day prior to an event, although unexpected same day emergency events may occur, limiting the ability to provide advance notice

Pepco anticipates activating direct load control events under a separate Energy Wise Rewards (EWR) program at the same time as PESC events. Customers who participate in the direct load control program will be eligible for additional PESC rebates that are in excess of monthly direct load control credits. The proposed rate tariff will reflect this credit treatment.

Pepco will develop an education campaign for the PESC Program in the District of Columbia.

Pepco said that it will discuss its proposed residential dynamic program with the RDWG participants and file a revised proposal with the Commission for its consideration. If the Commission approves the proposal by year-end 2020, the Company will implement dynamic pricing for all residential distribution customers in the District of Columbia during the summer of 2021. This implementation timeline assumes that the form of dynamic pricing is similar to Pepco’s dynamic pricing program in Maryland – thereby avoiding significant operational system changes, billing changes and substantial revisions to educational messaging.

Formal Case No. 1130

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