National Grid Seeks To Remove Mystic Costs From Default Service Bids; Would Be Included In Rates As Estimated Pass-Through, But Reconciliation Would Be Nonbypassable -- EnergyChoiceMatters.com

National Grid Seeks To Remove Mystic Costs From Default Service Bids; Would Be Included In Rates As Estimated Pass-Through, But Reconciliation Would Be Nonbypassable

Utility Says Action Would Lower SOS Rates In Time Of Rising Prices

November 17, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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National Grid has filed a petition at the Massachusetts DPU to exclude the responsibility for costs resulting from the ISO New England Mystic Cost of Service Agreement from electricity basic service (default service) bids, with bidders instead passing through to National Grid their actual costs related to the Mystic agreement

National Grid would include an estimate of costs related to the Mystic agreement for basic service load in the ultimate basic service prices charged to retail customers

However, to the extent actual Mystic costs differ from the estimate that National Grid included in retail basic service rates, any reconciled deviations would be included in the annual Basic Service reconciliation and, ultimately, recovered through the nonbypassable Basic Service Adjustment Factor (BSAF).

National Grid proposes to begin excluding Mystic costs from basic service bids commencing with the current solicitation for the Company’s Residential and Commercial Customer Groups for the six-month period May 2023 through October 2023, and for the Industrial Customer Group for the period February 1, 2023 through April 30, 2023, with such treatment continuing in future Basic Service solicitations for the period through May 2024.

"The intended benefits of the Company’s proposal to exclude the Mystic COS Costs from bids for Basic Service will be to maintain, or even increase bidder participation in its RFPs until the Mystic COS Agreement expires, and eliminate the need for suppliers to include a risk premium with their bids, for Mystic COS Costs, which will result in lower bid prices, and the likelihood of lower Basic Service rates for customers at a time when Basic Service costs have increased dramatically," National Grid said

"The benefits of the Company’s proposal to exclude the Mystic COS Costs from the bids in the Company’s current and upcoming Basic Service solicitations and recover the costs through an estimate included in Basic Service rates subject to reconciliation for the actual Mystic COS Costs that would be recovered through the BSAF outweigh any negative impact on customers. If the Mystic COS Costs remain incorporated in Basic Service bids, the RFPs could result in poor bidder participation or unacceptable high bids. If the Mystic COS Costs remain incorporated in Basic Service bids, the RFPs could result in poor bidder participation or unacceptable high bids. As a result, RFPs could fail which would require that the Company self-supply in the spot market, (i.e., buy energy from the ISO-NE hourly energy market). Customers would therefore bear the risk of Mystic COS Costs, and the added risk of spot market supply. Since the Mystic COS Agreement will expire in May 2024, the Company’s proposal is a short-term measure that provides the best protection for customers," National Grid said

Docket 22-BSF-D4

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