Indiana Michigan Power Files Proposed Nonbypassable Capacity Charges

Indiana Michigan Power (AEP) has filed with the Michigan PSC proposed retail capacity rates to be paid by competitive supply customers (U-17032).

The charges are to compensate I&M for capacity provided to these customers under I&M's Fixed Resource Requirement. The PSC is currently investigating the establishment of a state compensation mechanism to govern such charges. Currently, I&M charges retail suppliers a wholesale capacity charge equal to the RPM clearing price for such capacity.

Specifically, I&M proposes to impose a nonbypassable capacity charge on all retail customers, with the charge derived by removing an amount of currently bypassable power supply costs into a new nonbypassable capacity charge. The capacity charge would be identical for shopping and default service customers.

This charge would be applied to the customer, and retail suppliers would not be charged for wholesale capacity by I&M.

If a customer's retail supplier were to commit its own capacity to the Fixed Resource Requirement, instead of relying on I&M capacity, then the retail capacity charge would be bypassable for that supplier's customers.

I&M said that it developed the charges using the cost of service study which was the basis of current rates, and then separated the power supply related charges into two components – capacity charges and non-capacity charges. Non-capacity charges include items such as transmission, ancillary services and other PJM charges.

Additionally, both customers served under standard service and customers served by an alternative supplier will receive a credit of 80% of I&M's off-system sales margins consistent with the PSC's Order in Case U-16801.

The nonbypassable capacity charges for select rate schedules are below, as well as the bypassable non-capacity charges remaining after the capacity charges were separated from existing rates. The charges for all rate schedules may be found here (starting on page 93).

The nonbypassable capacity charges plus the bypassable non-capacity charges equal the former total "power supply" rate, which had been completely bypassable.

Tariff RS (Residential, Tariff Codes 015, 016 and 820):
Capacity: 4.181¢/kWh
Non-Capacity: 2.586¢/kWh
Former Total Bypassable Power Supply: 6.767¢/kWh



Tariff SGS (Small General Service)
Capacity:
For the first 2,000 kWh used per month: 4.685¢/kWh
For all kWh over 2,000 used per month: 1.883¢/kWh

Non-Capacity (all kWh): 2.611¢/kWh

Former Total Bypassable Power Supply:
For the first 2,000 kWh used per month: 7.296¢/kWh
For all kWh over 2,000 used per month: 4.494¢/kWh



Tariff MGS (Medium General Service

MGS Secondary (Tariff Codes 215, 218 & 840)
Capacity
Demand: $1.18/kW
Energy: 4.062¢/kWh

Non-Capacity:
Demand: $0.23/kW
Energy: 2.553¢/kWh

Former Total Bypassable Power Supply
Demand: $1.41/kW
Energy: 6.615¢/kWh


MGS Primary (Tariff Codes 217 & 841)
Capacity
Demand: $1.15/kW
Energy: 3.945¢/kWh

Non-Capacity:
Demand: $0.22/kW
Energy: 2.480¢/kWh

Former Total Bypassable Power Supply
Demand: $1.37/kW
Energy: 6.425¢/kWh


MGS Subtransmission (Tariff Codes 236 & 842)
Capacity
Demand: $1.13/kW
Energy: 3.878/kWh

Non-Capacity:
Demand: $0.21/kW
Energy: 2.437¢/kWh

Former Total Bypassable Power Supply
Demand: $1.34/kW
Energy: 6.315¢/kWh



Tariff LGS (Large General Service)

LGS Secondary (Tariff Codes 240, 242 & 850)
Capacity
Demand: $4.94/kW
Energy:
On-peak: 5.745¢/kWh
Off-peak: --

Non-Capacity:
Demand: $0.99/kW
Energy:
On-peak: 2.954¢/kWh
Off-peak: 1.796¢/kWh

Former Total Bypassable Power Supply
Demand: $5.93/kW
Energy:
On-peak: 8.699¢/kWh
Off-peak: 1.796¢/kWh


LGS Primary (Tariff Codes 244 & 851)
Capacity
Demand: $4.81/kW
Energy
On-peak: 5.581¢/kWh
Off-peak: --

Non-Capacity:
Demand: $0.96/kW
Energy
On-peak: 2.870¢/kWh
Off-peak: 1.743¢/kWh

Former Total Bypassable Power Supply
Demand: $5.77/kW
Energy
On-peak: 8.451¢/kWh
Off-peak: 1.743¢/kWh


LGS Subtransmission (Tariff Codes 248 & 852)
Capacity
Demand: $4.71/kW
Energy
On-peak: 5.484¢/kWh
Off-peak: --

Non-Capacity:
Demand: $0.95/kW
Energy
On-peak: 2.820¢/kWh
Off-peak: 1.714¢/kWh

Former Total Bypassable Power Supply
Demand: $5.66/kW
Energy
On-peak: 8.304¢/kWh
Off-peak: 1.714¢/kWh



Tariff LP (Large Power)

LP Secondary (Tariff Codes 305 & 860)
Capacity
Demand: $7.96/kW
Energy
For the first 210 on-peak kWh used per kW: 5.710¢/kWh
For all over 210 on-peak: kWh used per kW: --
For all off-peak kWh used: --

Non-Capacity
Demand: $1.62/kW
Energy
For the first 210 on-peak kWh used per kW: 2.964¢/kWh
For all over 210 on-peak: kWh used per kW: 1.804¢/kWh
For all off-peak kWh used: 1.804¢/kWh

Former Total Bypassable Power Supply
Demand: $9.58/kW
Energy
For the first 210 on-peak kWh used per kW: 8.674¢/kWh
For all over 210 on-peak: kWh used per kW: 1.804¢/kWh
For all off-peak kWh used: 1.804¢/kWh


LP Primary (Tariff Codes 306 & 861)
Capacity
Demand: $7.75/kW
Energy
For the first 210 on-peak kWh used per kW: 5.548¢/kWh
For all over 210 on-peak: kWh used per kW: --
For all off-peak kWh used: --

Non-Capacity
Demand: $1.58/kW
Energy
For the first 210 on-peak kWh used per kW: 2.880¢/kWh
For all over 210 on-peak: kWh used per kW: 1.753¢/kWh
For all off-peak kWh used: 1.753¢/kWh

Former Total Bypassable Power Supply
Demand: $9.33/kW
Energy
For the first 210 on-peak kWh used per kW: 8.428¢/kWh
For all over 210 on-peak: kWh used per kW: 1.753¢/kWh
For all off-peak kWh used: 1.753¢/kWh


LP Subtransmission (Tariff Codes 308 & 862)
Capacity
Demand: $7.59/kW
Energy
For the first 210 on-peak kWh used per kW: 5.450¢/kWh
For all over 210 on-peak: kWh used per kW: --
For all off-peak kWh used: --

Non-Capacity
Demand: $1.55/kW
Energy
For the first 210 on-peak kWh used per kW: 2.829¢/kWh
For all over 210 on-peak: kWh used per kW: 1.722¢/kWh
For all off-peak kWh used: 1.722¢/kWh

Former Total Bypassable Power Supply
Demand: $9.14/kW
Energy
For the first 210 on-peak kWh used per kW: 8.279¢/kWh
For all over 210 on-peak: kWh used per kW: 1.722¢/kWh
For all off-peak kWh used: 1.722¢/kWh


LP Transmission (Tariff Codes 310 & 863)
Capacity
Demand: $7.50/kW
Energy
For the first 210 on-peak kWh used per kW: 5.392¢/kWh
For all over 210 on-peak: kWh used per kW: --
For all off-peak kWh used: --

Non-Capacity
Demand: $1.53/kW
Energy
For the first 210 on-peak kWh used per kW: 2.800¢/kWh
For all over 210 on-peak: kWh used per kW: 1.704¢/kWh
For all off-peak kWh used: 1.704¢/kWh

Former Total Bypassable Power Supply
Demand: $9.03/kW
Energy
For the first 210 on-peak kWh used per kW: 8.192¢/kWh
For all over 210 on-peak: kWh used per kW: 1.704¢/kWh
For all off-peak kWh used: 1.704¢/kWh