Arizona ALJ Recommends Approval of Program to Allow Large Customers to Shop

An Arizona ALJ has recommended that a settlement at Arizona Public Service, which contains an opportunity for certain large customers to elect an alternative source of wholesale power, should be approved without modification.

Specifically, the proposed order would adopt a settlement which would, among other things, create new Experimental Rate Service Rider Schedule AG-1 at APS, under a four-year pilot.

Experimental Rate Schedule AG-1 is to be a buy-through rate for large commercial and industrial customers offered as an alternative to standard generation that will give larger customers greater control over their energy costs.

This program was developed in response to customer input and allows wholesale Generation Service Providers (GSP) to provide wholesale power to APS on behalf of specific customers. APS will purchase and manage generation on behalf of the customer for a management fee of $0.0006 per kWh.

Capped at 200 megawatts, applicants must be able to aggregate into a 10 megawatt group.

More specifics on the program, including eligible rate classes and other rate structure details, were contained in Matters' initial story on the proposed buy-through rate

A collaborative process is to be used to develop program guidelines including the customer enrollment process, APS' provision of imbalance energy, energy scheduling and billing and competitive bidding processes.

The proposed decision notes that, as described by witnesses from retail suppliers, the electric service provided under proposed Rate Schedule AG-1 differs from retail electric competition in that, "the GSP will transfer title to the electricity the GSP bought, at the direction of an eligible Rate Schedule AG-1 customer, to APS at a delivery point outside of APS' network delivery" and "APS remains the load serving entity for the retail customer providing all services, including the generation delivery and billing under a Commission approved rate schedule."