EnerNOC Seeks Changes to Maryland Gap RFP Contracts Due to Shortage in Meeting Obligations

EnerNOC has petitioned the Maryland PSC to amend its demand response capacity agreements with Potomac Edison, Pepco, and Delmarva Power, after failing to obtain the required capacity resources under the contracts for the 2011-12 delivery year at any of the three utilities.

The demand response contracts were awarded to EnerNOC under the PSC's "gap RFP" process, and obligate EnerNOC to provide a redacted amount of capacity from the 2011-12 delivery year through the 2014-15 delivery year (Case 9149).

The gap RFPs, an outgrowth of the Commission's evaluation of the SOS procurement process and its concern with reliability and lack of new capacity under the Reliability Pricing Model, procured demand resources via nonbypassable surcharge on distribution customers, with no impact on SOS pricing.

EnerNOC redacted the amount of the shortfall at each utility.

At Potomac Edison, EnerNOC is seeking a modification to the contract to allow the use of either Interruptible Load for Reliability (ILR) resources or Demand Resources, as each is defined by PJM, to meet the contractual obligation for ILR resources. Even with the allowance for the use of Demand Resources, EnerNOC is still short of its obligation, and sought to lower the amount required under the contract (with the specifics redacted).

At Pepco and Delmarva, EnerNOC is seeking a modification to the contract to allow the use of Full Emergency Demand Response and Capacity Only ILR to meet its obligations, whereas the contract calls for the products to be registered in PJM's Full Emergency Load Response Program. Even with these changes, EnerNOC is still short of its obligation, and sought to lower the amount required under the contract (with the specifics redacted).

EnerNOC said that both changes would not impose costs on ratepayers, since the contract price calls for no payment associated with the 2011-12 delivery year (with resources compensated solely through the PJM mechanism and not ratepayers).

EnerNOC also said that its sought changes would not impact reliability, as PJM has said that it has adequate supply.

Under EnerNOC's motion, neither it nor the utilities take a position on whether EnerNOC failed to perform a material obligation under the agreement, or otherwise defaulted on the agreement.

Potomac Edison does not oppose EnerNOC's petition. The Pepco companies have taken no position on the petition.