Maryland PSC Expands Critical Peak Rebates to Non-SOS Customers

The Maryland PSC has ordered Baltimore Gas and Electric Company and Pepco to implement dynamic pricing consistent with a working group report, which had recommended expanding dynamic pricing eligibility beyond only SOS customers, except that the PSC ordered that Pepco's 2012 implementation of dynamic pricing will be determined at a future hearing.

BGE's and Pepco's dynamic pricing programs will be critical peak rebates which pay customers a credit for reducing usage, relative to a baseline, during called events. The bypassable SOS price will not be modified and will remain in effect.

As was exclusively reported by Matters, a working group report recommended that the critical peak rebates be made available to all customers in eligible classes, regardless of whether the customer is on SOS or competitive supply, at Baltimore Gas & Electric and Pepco. Eligible classes will be residential at BGE, and residential and small commercial and Pepco.

The work group noted that it did not reach consensus on a proposal by Pepco to phase-in the critical peak rebates, which Pepco proposes to start with 5,000 residential SOS customers in the 2012/13 delivery year. During this phase-in only, the critical peak rebate would not be available to competitive supply customers, Pepco proposes. As noted above, the PSC will issue a further order regarding this proposal for service in 2012.

Customers who accept a competitive electric supplier's dynamic pricing offer, or an offer from a Curtailment Service Provider (CSP), which has been monetized in the PJM market(s) or directly tracks PJM market prices, must be removed from the applicable utility critical peak rebate tariff to avoid any double counting and double payment of demand reductions.

The working group contemplates that PJM will develop an approach for mass market customers that is similar to its existing approach for dynamic pricing programs utilized by certain commercial customers. Specifically, the alternative supplier or CSP must first contact PJM in order to attempt to monetize load reductions into the PJM markets, with PJM working directly with the utilities to confirm the individual customer's applicability.

The critical peak rebates will be rewarded as line-item credits on customers' bills.

An annual true-up will be required to calculate the difference between actual PJM market revenues (net of PJM credits and charges) and the critical peak rebate amounts paid to customers for the current PJM delivery year. As previously reported, BGE and Pepco propose that this annual dynamic pricing rebate true-up should be bundled as part of the nonbypassable EmPOWER MD Charge on the customer's bill, since all distribution customers will be eligible for the critical peak rebate program.

While all customers are eligible for the program, Matters previously noted that customers on competitive supply may choose to opt-out of the utility-offered critical peak rebate program in favor of demand response options offered by their supplier. As Matters previously noted, it is unclear whether customers who opt-out of the utility critical peak rebate in favor of a competitively offered dynamic rate offered by a retail supplier or curtailment service provider, and who thus do not contribute to any critical peak rebate over/under recovery, will be required to bear this portion of the EmPOWER MD Charge