Maryland PSC Approves Conceptual Change in SOS Structure at Delmarva

The Maryland PSC, in authorizing Delmarva Power to proceed with its plan for the deployment of advanced meters, has approved, in concept, a change in the structure of SOS at Delmarva.

Specifically, the PSC approved, "the concept of a dynamic rate schedule that combines the Standard Offer Service rates in effect at the time the schedule is implemented with the Critical Peak Rebate opportunities for residential, small commercial and medium commercial customers once AMI has been installed."

Under the critical peak rebate, SOS customers would continue to pay the otherwise applicable SOS rate during all hours, but during critical peak events, would be paid a per kWh credit for reducing usage relative to a baseline. There would be no penalty for not reducing usage.

Though the PSC only approved the critical peak rebate concept in principle, and did not approve specifics, Delmarva's AMI business case contemplates that the critical peak rebate will be the default option for all SOS customers.

More specifically, Delmarva contemplates that the critical peak rebate will be phased-in during 2014 for 5,000 residential SOS customers and 2015 for all remaining residential SOS customers. Delmarva contemplates that the critical peak rebate for SOS non-residential customers will be phased-in beginning in 2015 for 1,000 customers and 2016 for all remaining non-residential SOS customers.

The PSC's order only explicitly provides for the critical peak rebate with respect to SOS customers, and is silent on whether such rebates will be available to competitive supply customers.

The PSC did order that Delmarva shall be included in the working group convened by Staff to develop, and submit for the Commission's consideration, a proposal for uniformity of critical peak period seasons, times, frequency, and duration, and other aspects of dynamic pricing implementation.

In this working group, which has previously addressed the critical peak rebate at Baltimore Gas & Electric and Pepco, consensus was reached that the critical peak rebate should be available to all distribution customers, regardless of whether they are on SOS or competitive supply, to the extent that such customer class is eligible for critical peak rebates (at BGE, critical peak rebates will only be made available to residential customers, at Pepco, rebates will be made available to residential and small commercial customers).

See prior story for discussion of treatment of critical peak rebates at BGE, Pepco

Delmarva's installation of smart meters is expected to commence in September 2012 (subject to the completion of installation at Pepco), and conclude after 8 to 12 months, with a currently expected completion date in August, 2013.