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PUC Approves Utility's Time Of Use Generation Rate Offering For Default Service Customers
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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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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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Reporting by Paul Ring • ring@energychoicematters.com
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