Consolidated Edison Seeks Declaratory Order on Application of Minimum Demand to MSC Capacity Charge

Consolidated Edison Company of New York, Inc. has petitioned the New York PSC for a declaratory ruling concerning its application of a Minimum Demand for the Market Supply Charge (MSC) capacity component.

Specifically, ConEd is seeking to confirm as appropriate its prior application of a Minimum Demand (5 kW) for the Market Supply Charge (MSC) capacity component during billing periods in which customers had demands less than the Minimum Demand, notwithstanding the fact that the ConEd tariff did not include, for several years, explicit language applying the Minimum Demand to capacity charges through the MSC.

ConEd told the PSC that its full service, demand-billed customers, "historically have been responsible for a Minimum Demand for both delivery and supply."

"There has been no Commission action changing that determination," ConEd said.

ConEd noted that as a result of Case 07-E-0523, its rate leaves were reformatted in April 2008. Among the changes made, the existing Minimum Demand language in the tariff was removed from a position that addressed both the delivery and supply aspects of this service, and was to be included under two separate sections addressing supply and delivery, respectively. However, while ConEd added a section addressing Minimum Demand language for delivery, the supply Minimum Demand language was inadvertently not added.

ConEd maintained that the inadvertent omission, "did not change the Company's obligation to charge demand-billed customers a Minimum Demand for supply."

ConEd discovered the omission as part of a comprehensive review of its tariff, and a revised tariff with the supply Minimum Demand language was approved effective February 20, 2012.

Several customers, represented by Utility Rate Analysis Consultants, have filed a complaint over the application of a Minimum Demand to capacity charges during the period in which the tariff lacked language concerning a Minimum Demand charge for supply.

"[The] inadvertent omission should not relieve these customers of their responsibility for these charges and thereby result in a windfall to the Complainants," ConEd said.

However, ConEd said that to the extent the PSC orders refunds to demand-billed customers for the difference between capacity costs associated with a Minimum Demand and the customer's metered demand for periods prior to February 20, 2012, ConEd should be permitted to recover from all full service customers the cost of such refunds through the MSC.

ConEd said that charging full service customers the cost of any refund would be appropriate since applying a Minimum Demand to the supply charges for demand-billed customers did not result in an over-recovery of capacity costs, because all MSC revenue is reconciled against ConEd's costs, and the difference is debited or credited to all full service customers through Adjustment Factor – MSC I. In other words, ConEd was not enriched by application of a Minimum Demand to the supply charges.