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Utility Files Alternative Default Service Procurement Plan

September 26, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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National Grid in Massachusetts has filed with the DPU a proposed alternative basic service procurement plan for its large industrial customer group (General Service – Demand G-2 customers, and General Service – Time-of-Use G-3 customers), after it did not award any supply for the industrial customer group in its standard procurement

National Grid's instant filing is limited to the large customer group, and does not include the residential and small commercial customer groups, for which a procurement awarded load and which resulted in fixed rates in excess of 30 cents per kWh for the winter term, which remains subject to DPU approval (see details here)

Specifically, under its standard procurement plan, National Grid procures 100 percent of their large commercial and industrial (C&I) basic service load requirements on a quarterly basis. Consistent with these requirements, on September 14, 2022, the Company concluded a request for proposal (RFP) process to solicit 100 percent of its basic service load requirements for its Industrial customer group for the three-month basic service period November 1, 2022 through January 31, 2023.

The RFP process failed to secure basic service supply for the Industrial customer group, as National Grid said that the bids received were, "unreasonably high and unacceptable."

Accordingly, National Grid has proposed an alternative basic service procurement plan to serve the Industrial customer group. The Company proposes to self-supply the Industrial group by assuming the responsibility for managing the load asset for these customers in the ISO New England spot market.

The Company proposes to set the monthly basic service rates for the affected customers by estimating cost elements of self-supply.

Specifically, National Grid proposes the following rates, under the monthly rate option, for the Large Industrial Customer Group:

Industrial, cents per kWh

Monthly Rates
         Nov      Dec      Jan
NEMA    18.043   29.449   37.607
SEMA    18.279   29.270   35.334
WCMA    17.764   28.065   36.765

Fixed Rate Option, Nov-Jan
NEMA: 28.736
SEMA: 28.455
WCMA: 27.387

"The Company does not propose any modifications to currently effective cost recovery methods for Basic Service. Under the current method, the Company recovers the cost of Basic Service cost by charging customers a rate reflective of the cost of procurement as approved by the Department," National Grid said

"To the extent that the Basic Service revenue billed to customers is over or under the cost of procurement, the deferral balance is credit or recovered through its Basic Service Adjustment Factor as set forth in M.D.P.U. No. 1457," National Grid said

National Grid said that, "'Self-supply' means that the Company will assume responsibility for managing the load assets for this segment of its Basic Service load in the ISO-NE market. These responsibilities will include scheduling the Basic Service load in the ISO-NE Day Ahead Energy Market. The Company’s Day Ahead load bidding strategy is to minimize exposure to the Real Time Energy Market by bidding the forecasted load requirements into the Day Ahead market and allow the Real Time Energy Market to be the balancing market for actual load conditions. In effect, this approach means that the Company is effectively buying energy from the ISO-NE hourly energy market."

National Grid said that, currently, approximately 8 percent of the Company’s Industrial customer group load during November 1, 2022 through January 31, 2023 term are expected to remain on Basic Service supply.

Docket 22-BSF-d3


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