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People's Counsel No Longer Proposes "Separate" SOS Rate For Customers Within CCA Boundary If CCA Causes SOS Costs To Rise
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The Maryland Office of People's Counsel has proposed revisions to the mechanism meant to address risk to SOS suppliers and customers from the potential start of an opt-out municipal aggregation (CCA) at Montgomery County, Maryland
As previously reported, the PSC has already adopted changes to the SOS procurement process to mitigate potential risks from the launch of the CCA, largely adopting OPC's prior framework.
See more details here
As previously reported, OPC's framework, in brief, caps the amount of new load for which an SOS supplier would be responsible -- originally this was capped at 15 MW, but now OPC proposes a 10.5 MW cap. This load responsibility cap would cover potential increases in the SOS supplier's load obligations from initial municipal aggregation opt-outs (5.5 MW) as well as later returns to SOS from the CCA or competitive retail suppliers, load growth, etc (5 MW, the INC cap)
If the 5 MW INC cap is hit, OPC proposes that Pepco would assign the costs of any additional SOS supplies, that must be procured due to the increased load above the cap, based on the amount of INC above 2.5 MW in each county (i.e. Montgomery County, and Prince George’s County). Currently, legislation only allows Montgomery County to operate a CCA.
As a result, at Pepco, if additional procurements were required due to the CCA as described above, OPC's prior mechanism would have applied "separate" SOS rates to each county, based on each county's contribution (if any) to the additional supply procurement
OPC still proposes that these additional costs (or credits) be applied uniquely to each county, but OPC no longer uses the term "separate rates" to describe the mechanism
Rather, OPC proposes that, "All customers will receive the same SOS rate."
Assigned costs (or credits) related to the additional procurements will be recovered (or refunded)
through a county-specific Power Cost Adjustment (PCA).
OPC in its filed proposal does not provide more specifics on its proposed county-specific "Power Cost Adjustment (PCA)"
Pepco currently uses a bypassable Procurement Cost Adjustment to true-up SOS costs, and Pepco uses in its tariff the abbreviation PCA for the Procurement Cost Adjustment.
It was not clear whether OPC's "Power Cost Adjustment (PCA)" is meant to refer to the existing Procurement Cost Adjustment (PCA), or is meant to be a new mechanism, separate from the Procurement Cost Adjustment
The Procurement Cost Adjustment is bypassable. Thus, to the extent OPC means that costs will be recovered through the Procurement Cost Adjustment, OPC's revised proposal doesn't change the ultimate cost treatment.
However, the presentation of costs to customers (SOS rate versus PCA) may differ.
The PCA is updated monthly
Pepco's website informing customers of SOS Pricing Information states that, "the 'SOS Pricing Information' excludes the PCA".
On Pepco's website, the "SOS Pricing Information" is a listing of current and known Standard Offer Service (SOS) prices and a weighted average of known SOS prices, including effective dates
The parties to a workgroup addressing the impact of the CCA on SOS also noted, "There is a possibility that the special reserve RFPs result in effectively zero impact on
SOS rates. OPC raises for the workgroup’s consideration that in such a scenario, it may
be unnecessary to initiate recovery (or refund) through a county-specific Power Cost
Adjustment (PCA) if the impact on SOS rates is de minimus or even negative. In such
circumstances, SOS rates should be adjusted. For clarity, Staff’s proposal could
recommend that instead of a very small (effectively zero) county-specific PCA, SOS rates
could be adjusted for all SOS customers."
OPC's proposal came in the annual SOS procurement improvement process (PIP)
In a report on the process, PSC Staff said that Staff is not aware of any party opposing the revisions to OPC’s original proposal.
Staff also reported that, prior to the start of the 2025 PIP, Montgomery County advised the PIP parties that its CCA will not start before October 1, 2028.
Previously, Montgomery County had indicated that its opt-out aggregation would begin no earlier than June 1, 2027
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New Bypassable Costs May Not Be Reflected In Consumer-Facing Info, Based On Website Description
State's First Opt-out Aggregation Won't Start For Another Year
August 26, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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