ConEd Seeks Emergency Changes To Default Service Electricity Supply Pricing Mechanism -- EnergyChoiceMatters.com

ConEd Seeks Emergency Changes To Default Service Electricity Supply Pricing Mechanism

March 16, 2022

Email This Story
Copyright 2010-21 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

Consolidated Edison Company of New York, Inc. has filed at the New York PSC for emergency approval of electricity tariff amendments that, "provide for an electric supply cost recovery mechanism that will more closely align supply prices with the Company’s hedging positions, reducing the likelihood of significant customer bill volatility."

ConEd noted that the energy component of the Company’s Market Supply Charge ("MSC") is currently developed for each rate class based on NYISO day-ahead hourly energy prices and hourly weights developed from class-specific load shapes. Separate energy prices are developed for the New York City load zone (Zone J) and for each of the two Westchester load zones (Zones H and I). These energy prices are determined for each customer’s bill based on the actual market prices for that customer’s billing period.

The Adjustment Factor - MSC II is primarily used to recover hedging costs from customers or refund hedging benefits to customers. It includes an estimate of hedging costs or benefits for the billing month and a reconciliation of the preceding month’s estimated versus actual hedging costs or benefits.

Under the current mechanism, increases or decreases in the market price of energy directly affect customers’ bills as they occur, while the difference between forecasted and actual hedging impact is provided in a subsequent month’s Adjustment Factor - MSC II.

"To better align the manner in which market prices and associated hedging impacts are applied to customers’ bills, the Company is proposing to calculate the energy component of the MSC using forecasts of energy prices each month, along with estimates of associated hedging impacts," ConEd said

As proposed, the Company will develop the MSC’s energy component for each rate class using forecasted energy prices (including estimates of associated hedging impacts) and hourly weights developed from class-specific load shapes. The energy prices will be determined for each customer’s bill based on the forecasted prices for that customer’s billing period. Differences between actual energy costs and energy revenues derived from the MSC (including hedging impacts) will continue to be recovered through the MSC adjustments, ConEd said

To implement these changes, the Company is proposing the following changes to the Electric Tariff:

• The definition for costs/benefits of "hedges" has been renamed "Hedging Impact" and moved under the definitions section in General Rule 25.
• The description of the cost of energy in General Rules 25.1(a)(1) and 25.1(b) has been changed to reflect that the cost of energy used in the determination of the MSC will be based on a forecast of NYISO market prices and an estimate of the associated Hedging Impact.
• The Adjustment Factor - MSC II has been revised to reflect that it will no longer recover the entire the Hedging Impact, because the estimated Hedging Impact is recovered through the MSC itself. The Adjustment Factor – MSC II will recover the reconciliation of the Hedging Impact that was recovered in the MSC and the actual incurred Hedging Impact from the previous month.
• General Rule 25.2.3, which describes the reconciliations of the Adjustment Factor - MSC I and Adjustment Factor - MSC II has been revised to clarify that such reconciliations may be passed through the Adjustment Factor - MSC I and Adjustment Factor - MSC II over multiple months.

ConEd proposes that these tariff changes become effective on June 1, 2022

Separately, the New York PSC noted in a press release today that, "The other major utilities, Orange and Rockland, National Grid, NYSEG, RG&E, National Fuel, PSEG Long Island, and Central Hudson, are reviewing their existing power supply purchasing to mitigate the risk of severe price volatility, refocusing their efforts to educate consumers regarding anticipated bill increases, and increasing outreach and education efforts to promote consumer payment assistance plans and programs to reduce energy usage."

As previously reported, the PSC had directed such utilities to review their approaches to full-service supply billing to ensure they are reducing the likelihood of extreme and sudden price volatility

Email This Story

HOME