NEM Urges Connecticut to Examine Further Delivery Rate Unbundling

Connecticut should examine, "whether additional unbundling is necessary to separate out the full retail costs to the utility of providing 24/7 no-notice, last resort [electric] standard service," the National Energy Marketers Association said in comments to PURA (12-05-04).

NEM's comments were filed in PURA's proceeding to review all non-distribution and non-transmission delivery charges on electric bills, including, among other charges, the Bypassable and Non-Bypassable Federally Mandated Congestion Charges (FMCCs).

NEM noted that the utilities were directed to file on July 10 specific descriptions of each charge, the costs included in each, and the mechanics of how each is calculated. Given that stakeholder comments will be better informed in response to this specific information, NEM asked that parties be allowed to file reply comments to the utilities' July 10 submission.

At a high level, NEM said that, "[t]he utilities' generation services rate should reflect the full costs of providing this 24/7 no-notice, default service to consumers."

"Rate unbundling permits consumers to see and understand the full extent of the costs associated with utility default service and permits consumers to make accurate, informed comparisons with competitive offerings. Also, consumers that migrate should not be penalized by a double payment of commodity-related costs, once to their competitive supplier that is currently providing the service, and once to the utility that is no longer providing the service but is collecting the cost through delivery rates that have not been fully unbundled," NEM said.

NEM noted that in a 2004 decision, the DPUC established a uniform list of costs applicable to the electric utilities' FMCC charges. NEM noted that the approved costs to be included in bypassable FMCC rates (and added to the generation services rate to establish the generation services charge against which retail energy marketers compete) were as follows: TSO Supply Costs, Operating Reserves, Regulation, FTR Auction Expense, FTR Market Revenue, ARR Revenue, Congestion Risk Mitigation, TSO Consulting Fees, Capacity for TSO, Brokers Fees for TSO and ICAP for TSO. The approved costs to be included in nonbypassable FMCC rates (and included in the delivery services rate charged to all customers, shopping and non-shopping) were as follows: ISO Schedule 1, 2 and 3, RMR-Fixed, ISO Load Response Program, VAR Support, Black Start, D&D Legacy Costs, 2003 SW CT Summer Generation, ISO Transition Cost Reconciliation, ISO Credit Insurance Charge, ISO Participant Defaults, SWCT Energy Resources.