Archive

Daily Email

Events

 

 

 

About/Contact

Search

New York State Agency Says ESCOs, Direct Customers Put At Competitive Disadvantage To NiMo Commodity Supply Due To Use, Treatment Of Load Modifiers

November 30, 2020

Email This Story
Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

A witness testifying on behalf of the New York State Office of General Services (OGS) said in testimony in a Niagara Mohawk (National Grid) rate case that the current use and treatment of Load Modifiers by NiMo creates an, "ongoing inequity in the commodity market in relation to ancillary services."

"National Grid uses Load Modifiers to avoid NYISO Ancillary Services. The NYISO assigns Ancillary Service costs to all Load Serving Entities ('LSEs') proportionately based on load share. However, National Grid uses behind-the-meter generation in its service territory to offset some of its load that is reported to the NYISO. As a result, National Grid is assigned a smaller portion of the total Ancillary Services costs than it would otherwise. Because load modifier expenses are recovered under National Grid’s delivery rates, expenses are being allocated to delivery rates while only National Grid commodity customers receive the benefits. This misallocation should be corrected," a witness for OGS testified

"With new load modifying generation from new distributed energy resources ('DERs') that are expected to come online in the near future, the amount of National Grid load modifiers could be very significant. National Grid’s SIR queue shows 569 MW of completed generation and an additional 3,680 MW not yet complete. These and other new load modifiers will continue to increase the difference between National Grid’s Ancillary Services costs and the costs other LSEs expend in the market for Ancillary Services," a witness for OGS testified

"OGS pays for Ancillary Services for all of the kWh of commodity service that OGS supplies. In total, OGS supplied almost 700 million kWh and paid over $2 million in Ancillary Services for 2020. National Grid, on the other hand, only paid for Ancillary Services for a portion of its total LSE load due to its use of load modifiers. This has the dual effect of decreasing costs for National Grid commodity customers, while simultaneously increasing costs for all the other market participants. The total amount of Ancillary Service costs that the NYISO distributes among LSEs is static. Therefore, National Grid being able to avoid these costs on some of its load results in increased costs to all other load. As a result, National Grid’s Ancillary Services passed on to National Grid commodity customers continues to be below NYISO ancillary services costs. Because Ancillary Services are socialized costs, if one market participant avoids those costs all the other market participants are required to cover the overall cost total. This puts all Direct Customers and Energy Service Companies ('ESCO') at a competitive disadvantage in the NYISO market," a witness for OGS testified

"The use of DERs is particularly troubling in this respect. Because the costs of these contracts are recovered from delivery customers, the benefits should be similarly distributed. In practice, however, only commodity customers realize the avoided Ancillary Services benefits associated with these contracts, creating a distinct disadvantage for Direct and ESCO commodity customers. Not only do these customers not receive a benefit that they pay for, but their Ancillary Services costs increase because of this practice," a witness for OGS testified

"While the costs of SC-6 Generators are recovered from commodity customers, Direct and ESCO customers are still harmed because the costs of the Ancillary Services they must procure go up. Because National Grid avoids buying Ancillary Services for a portion of its load, the costs on all other load increase," a witness for OGS testified

Case 20-E-0380

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
NEW! -- Sr. Power Analyst -- Houston
NEW! -- Supply Analyst -- Retail Supplier -- DFW
NEW! -- Lead Data Analyst -- Retail Supplier
NEW! -- Senior Energy Pricing Analyst
NEW! -- Senior Energy Advisor
NEW! -- Financial Analyst -- Retail Supplier -- DFW
NEW! -- Sr. Energy Intelligence Analyst
NEW! -- Channel Partner Sales Manager -- Retail Supplier
NEW! -- Sr. Billing Analyst -- Retail Supplier
Director of Regulatory Affairs -- Retail Supplier -- Houston

Email This Story

HOME

Copyright 2010-20 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.

 

Archive

Daily Email

Events

 

 

 

About/Contact

Search