State Regulator Asks If Retail Suppliers Would Be Prohibited From Marketing To Customers In Communities Which Adopt An Opt-out Municipal Aggregation, In Studying Adoption Of Opt-out CCAs

Asks Whether Adoption Of CCA Would "Supplant" Existing Contracts Between Retail Suppliers And Customers If A Community Adopts CCA

Asks Whether Opt-Out Model Creates "Competitive Advantage" For CCAs

Asks Whether Utility Should Serve As Provider Of Last Resort For Customers Opting Out Of CCA

Asks About Price Impact On Non-CCA Customers, Including Upward Pressure On Default Service Rates

August 28, 2020

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The Connecticut PURA issued for stakeholder comment a series of questions concerning opt-out municipal aggregation, as part of its previously reported study of community choice aggregation (CCA) for electricity

Of note is the question that, for municipalities adopting an opt-out aggregation: "Would third-party suppliers be prohibited from marketing to customers within the boundaries of a CCA?"

Other notable questions include:

• Comment whether adopting an opt-out CCA model would create a competitive advantage for the CCA over other electric suppliers and aggregators who operate in the CCA’s region and market to individual residences and businesses in order to obtain and build market share.

• Discuss the impact of a municipality opting to establish a CCA program on commercial and residential customers within the municipality whom have already enrolled with a third-party supplier ... [including] ... whether a CCA provider would supplant the existing third-party supplier contracts

• Provide any known examples where there is a correlation between the adoption of a CCA followed by a reduction in the number of choices of electric suppliers and aggregators available who compete for customers in the CCA’s area.

• Discuss whether and how the uptake of a CCA model would cause upward price pressure on standard service rates. Discuss how average retail electric rates for all Connecticut ratepayers (i.e., ratepayers subscribed to third-party suppliers and CCA providers, as well as standard service customers) would be impacted by a CCA model.

• Explain whether an investor-owned utility that remains the sole provider of distribution, transmission, and other services traditionally provided by the utility, such as metering and billing, should also be the provider of last resort for supplying electricity to customers who opt out of a CCA program

• Discuss whether there should be a Purchase of Receivables program associated with CCA?

• How would a CCA provider interact with residential customers receiving financial hardship protections? Could a CCA model be tailored to supplement existing limited income customer protections or services?

The complete list of questions for comment is below:

1. Reduced cost of electric supply on customers’ bills:

a. Discuss whether the objective of achieving lower power costs should be a threshold requirement of CCA model adoption in the state.

b. Explain whether it would be considered an acceptable outcome of the adoption of a CCA model in Connecticut, if achieving some of the potential objectives such as accelerated DER adoption and/or greater GHG reductions, causes the price per kWh of energy delivered through the CCA to exceed the price per kWh of standard service.

2. GHG Reductions

a. Explain how enabling CCA in the state could potentially contribute to GHG reductions.

b. Identify and explain how GHG reductions via CCA adoption would be realized within the CCA communities served, the state, or outside of the state.

c. Address how the goal of achieving greater GHG reductions through the adoption of CCAs in the state may or may not conflict with the objective of reducing the cost of power for consumers and businesses participating in a CCA.

3. Increased Local Resilience

a. Describe how the adoption of a CCA model in the state could potentially increase local resilience.

b. Identify the types of costs that would be incurred under a CCA model to implement and achieve increased local resilience.

c. Discuss who would be responsible to bear such costs to increase local resilience initiated through a CCA (i.e., CCA customers, non-CCA customers within the CCA area, and/or non-CCA customers outside of the CCA).

d. Address whether non-CCA customers would be responsible for any additional costs associated with a CCA’s actions to increase local resilience.

4. Increased Local Choice

a. Identify the benefits of increased local choice under a CCA model.

b. Address the differences in individual customer choice under an opt-in and opt-out CCA model.

c. Identify any consumer protection concerns that an opt-out CCA model could potentially create for individual customers, for whatever reason may be unfamiliar with CCA opt-out provisions. Provide examples of CCA implementation in other jurisdictions using an opt-out model.

d. Explain whether an investor-owned utility that remains the sole provider of distribution, transmission, and other services traditionally provided by the utility, such as metering and billing, should also be the provider of last resort for supplying electricity to customers who opt out of a CCA program.

e. Discuss whether any data-sharing requirements should be imposed on investor-owned electric utilities to help ensure that a CCA provider or a jurisdiction investigating whether to form or join a CCA program can reasonably evaluate its financial and technical viability and implement its CCA program.

f. Discuss the impact of a municipality opting to establish a CCA program on commercial and residential customers within the municipality whom have already enrolled with a third-party supplier. Specifically, address the following: (1) whether a CCA provider would supplant the existing third-party supplier contracts; (2) whether customers would be able to opt out of the CCA program; and (3) what type and frequency of notice should be provided to customers about their enrollment in a CCA program by the municipality.

5. Accelerated Adoption of DERs

a. Describe how CCA can accelerate the adoption of DERs. Provide best practices and concrete examples, if available, from other jurisdictions where CCAs have been adopted.

b. Provide any quantifiable examples of energy efficiencies achieved through CCA implementation in other states.

c. Discuss whether the adoption of CCA would impact the business case for the deployment of advanced metering infrastructure.

d. Address if there are any opportunities for CCA to provide demand-side grid services.

6. Creation of Additional Advocates for Clean Energy

a. Address any concerns or competing interests that the creation of CCAs that are primarily focused on clean energy policies could create in terms of existing public, or private entities who are already advocating for implementing clean energy initiatives for the state.

7. Enhanced Local Economic Opportunities

a. Explain how the adoption of CCA in Connecticut could potentially provide local economic opportunities for the communities they serve and how the state would benefit.

b. To the extent available, provide specific examples from other jurisdictions with demonstrated benefits to the local economy as a result of the adoption of CCA.

c. To the extent available, provide experiences from other jurisdictions where CCA has been adopted but there has not been a specific focus on achieving local economic benefits.

8. Legal / Regulatory Considerations

a. If Connecticut were to enable the adoption of CCA models, what existing statutes, regulations, and/or past PURA decisions would need to be modified, if any? What new legislative or regulatory matters would need to be pursued, if any? What Connecticut statutes, regulations, and/or PURA decisions support the adoption of CCA model, if any?

b. Who would regulate or oversee the governance of the CCA, what should an oversight role consist of, and what should be the frequency of review?

c. Discuss whether the objectives outlined as reasons for adopting a CCA model in Connecticut could be realized through a modification to the existing standard service procurement model.

d. Address whether the Authority should license electric aggregators that want to participate in a CCA program. If yes, address how the licensing of aggregators could work within a CCA model.

e. Discuss whether the Authority should charge an application fee to towns that register in a CCA program.

f. Discuss whether the municipalities that register for a CCA program should be required to post the rates on the EnergizeCT rateboard.

g. Comment whether adopting an opt-out CCA model would create a competitive advantage for the CCA over other electric suppliers and aggregators who operate in the CCA’s region and market to individual residences and businesses in order to obtain and build market share.

h. Provide any known examples where there is a correlation between the adoption of a CCA followed by a reduction in the number of choices of electric suppliers and aggregators available who compete for customers in the CCA’s area.

i. Identify any legal challenges that have been raised by electric suppliers, aggregators or other parties in states where CCA models have been adopted or considered.

j. Discuss whether and how the uptake of a CCA model would cause upward price pressure on standard service rates. Discuss how average retail electric rates for all Connecticut ratepayers (i.e., ratepayers subscribed to third-party suppliers and CCA providers, as well as standard service customers) would be impacted by a CCA model.

k. Identify states that have attempted but failed to pass legislation to adopt CCA. Provide insights as to why the proposed legislation was not approved

l. Discuss whether there should be a Purchase of Receivables program associated with CCA?

9. Consumer Related Issues

a. Would the Authority be responsible for addressing customer complaints associated with a municipality’s adoption of a CCA program? Explain.

b. If a customer opts-out of their town’s CCA program, is the customer required to notify the town or the EDC? Explain.

c. Explain how the existing third-party market would be informed about a municipality’s decision to establish CCA. Would third-party suppliers be prohibited from marketing to customers within the boundaries of a CCA?

d. How would a CCA provider interact with residential customers receiving financial hardship protections?

e. Address how a CCA provider would interact with the new Shared Clean Energy Facilities program approved by the Authority in its December 18, 2019 decision in Docket No. 19-07-01, Review of the Statewide Shared Energy Facility Program Initiatives.

f. Could a CCA model be tailored to supplement existing limited income customer protections or services? Explain.

g. Compare and contrast the adoption of a CCA model to a tariff designed for a specific group of customers (e.g. a voluntary green tariff), or the Disadvantaged Communities Green Tariff adopted in California1.

10. Competing Objectives

a. Identify if any of the objectives identified above in natural conflict with each other. If so, describe the issue and discuss whether it can be mitigated or resolved.

Docket 20-05-13

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