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PUC Approves Utility's Time Of Use Generation Rate Offering For Default Service Customers

Retail Suppliers Had Alleged Utility's Offering Would Monopolize Market, Given Lack Of Settlement Data For Retail Supplier TOU Products

PUC Orders Utility To File Testimony Regarding Use Of AMI Data For Wholesale Settlements, THEO, NSPL, & PLC

July 15, 2021

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Copyright 2010-21
Reporting by Paul Ring •

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The Public Utilities Commission of Ohio approved a proposal from AEP Ohio to offer a time-of-use option under its bypassable Generation Capacity (GENC)) Rider applicable to non-shopping customers

In doing so, in order to address concerns raised by retail suppliers, PUCO also directed AEP Ohio, in its separate gridSMART Phase 3 application in Case No. 19-1475-EL-RDR, to file supplemental testimony that addresses a timeline to update the wholesale settlement systems and processes needed to calculate and settle individual THEO, NSPL, and PLC values for all customers with AMI meters, as well as the estimated cost of implementation.

As further discussed below, retail suppliers had opposed AEP Ohio's proposal, alleging that AEP Ohio's proposal would monopolize the market given settlement and data issues facing retail suppliers who seek to offer TOU rates

AEP Ohio's time of use Generation Capacity (GENC)) Rider will be available as an option to non-shopping residential and general service customers with AMI meters. In a prior proceeding, AEP Ohio had been directed to file a TOU generation rate proposal until sufficient competitive offers from competitive retail electric service (CRES) suppliers develop

The TOU GENC rate will be a two-tier time of use rate (on-peak and off-peak). On-Peak hours apply to all weekdays regardless of holidays November through April 6AM to 9AM and May through October 2PM through 6PM. Off-peak will be remaining hours. Specific rates (specific to each the RS and GS classes) will be based on the latest GENC rates

PUCO Staff had reported that, as of March 27, 2019, there was only one CRES provider offering a TOU rate at AEP Ohio

"In light of the limited TOU offerings available to customers, we agree with Staff that AEP Ohio should be required to maintain a TOU rate program," PUCO said in adopting AEP Ohio's proposal with certain changes

PUCO directed that, as recommended by OCC, Residential and General Service 1 customers with AMI meters should be notified of the availability of the new TOU rates. "AEP Ohio should work with Staff, OCC, and other members of the gridSMART collaborative to address the informational or marketing materials or notices to be made available to customers, as well as to discuss whether any additional billing or usage data should be provided on TOU bills or tracked for purposes of reporting to the collaborative members," PUCO said

"Further, in order to ensure that customers are fully aware of the applicable terms of service and TOU rate structure, affirmative enrollment should be required for residential and general service 1 customers that are new to TOU offerings, and for customers that currently receive service under AEP Ohio’s experimental tariff offerings," PUCO said

PUCO denied OCC’s recommendations that a hold-harmless provision be incorporated in the TOU tariffs and that a customer participation cap be imposed on the TOU program

Retail suppliers had alleged that AEP Ohio's proposal would monopolize the market, and alleged that AEP Ohio is not providing necessary settlement data for retail suppliers to offer TOU products

As summarized by PUCO, "Direct Energy argues that AEP Ohio’s amended application should be denied, because the Company failed to meet its obligations under the Phase 2 Stipulation. Direct Energy further argues that the Commission should discontinue AEP Ohio’s TOU offerings and direct the Company to upgrade its systems to provide adequate bill quality data to CRES providers for use in developing and administering TOU programs. Direct Energy emphasizes that AEP Ohio failed to comply with the first step of the three-step process in the Phase 2 Stipulation’s transition plan, which required the Company, with an approximate completion date of 24 months after approval of the Phase 2 Stipulation, to develop a CRES AMI interval data portal that would enable CRES providers to offer more strategic and competitive TOU options and programs and allow for CRES settlement via actual load data. Direct Energy contends that, despite this commitment, AEP Ohio has shown no intention of providing the functionality needed for CRES providers to develop and bill TOU products. Direct Energy adds that the Commission should not proceed to the third step of the transition plan (i.e., determination of whether CRES TOU programs are sufficiently competitive) or approve AEP Ohio’s proposed TOU rate program, as that would reward the Company for its failure to comply with the Phase 2 Stipulation and enable the Company to monopolize the market, while impeding the Commission’s goal of achieving a market-based approach to TOU rate offerings. According to Direct Energy, AEP Ohio’s request to continue the DLC Rider should also be denied, because the rider is unavailable to shopping customers and the Phase 2 Stipulation clearly states that the rider will expire regardless of the Commission’s determination regarding the competitiveness of the CRES TOU market."

As summarized by PUCO, "AEP Ohio argues that it has fulfilled its obligations under the Phase 2 Stipulation. AEP Ohio emphasizes that the Phase 2 Stipulation required the Company to develop the necessary systems and processes to enable CRES TOU programs that are similar to the existing gridSMART TOU programs and that meet the same criteria as the Company’s SMART Shift and SMART Shift Plus offerings. AEP Ohio further emphasizes that it has consistently and transparently provided valuable information in a timely fashion and worked in a collaborative fashion with all intervening parties in the Phase 2 Case through the gridSMART collaborative process, while also providing a system and process manual for the TOU transition program and filing a TOU transition report in Case No. 18-203-EL-RDR. According to AEP Ohio, it was timely confirmed through this process that systems were in place for CRES providers to begin to supply TOU offerings that meet the same criteria as the Company’s SMART Shift and SMART Shift Plus programs. More specifically, AEP Ohio states that, once systems consistent with the specifications in the Phase 2 Stipulation were put in place in 2017, the Company communicated detailed instructions on how to use the systems to CRES providers, which was followed by notification to customers in July 2018 after a single CRES provider began to offer the equivalent of the SMART Shift tariff. AEP Ohio adds that, during this implementation phase, no stakeholder disputed the Company’s progress or claimed that its obligations under the Phase 2 Stipulation were not fully discharged. AEP Ohio concludes that Direct Energy’s arguments constitute an inaccurate and inappropriate attack on the Company and are beyond the scope of these proceedings."

PUCO Staff agrees that additional steps are necessary to enable CRES providers to offer TOU products and services in the retail market.

However, pending resolution of this issue in the gridSMART case noted above, Staff believes that AEP Ohio’s updated TOU proposal is reasonable, and favored adoption.

Case 17-1234-EL-ATA et al.

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