New York ESCOs Seek Phase-In of Blended WACOC Releases at NYSEG

Several ESCO parties have asked the New York PSC to phase-in the proposed introduction of system-wide weighted average cost of capacity (WACOC) releases of capacity to ESCOs at NYSEG.

As only reported in Matters, NYSEG had proposed WACOC capacity releases as part of the introduction of a single Gas Supply Area (GSA).

The Retail Energy Supply Association, Small Customer Marketer Coalition, and Empire Natural Gas Corporation noted that in a collaborative report filed with the PSC, NYSEG had indicated that the consolidation into a single GSA will be delayed and occur on September 1, 2013.

"Nonetheless, in conflict with this proposal it recommends that the blended WACOC be instituted on April 1, 2013 or 6 months prior to the institution of the single GSA," the ESCOs noted.

"The blended WACOC is inextricably linked to the single GSA; thus it is illogical to sever them with respect to implementation. This will cause unnecessary confusion as customers will be subjected to material changes on a serial basis," the ESCOs said.

"In view of this material change, and to provide sufficient time for implementation of the blended WACOC, the phase-in of the system-wide WACOC should more reasonably commence with 50% of the change implemented on September 1, 2013 in concert with a single GSA and the, remaining 50% on September 1, 2014. In this manner the application of the blended WACOC would start with the consolidation into a single GSA," ESCOs said.

"This schedule would also provide needed additional time to accommodate existing long term contracts which were entered into prior to the finalization of the program changes. Moreover, in light of the significant rate impact (as noted further below) on transportation customers associated with the implementation of the blended WACOC, the phase-in schedule proposed herein will help customers assimilate these changes in a more reasoned and prudent manner," the ESCOs said.

The ESCOs submitted a cost impact analysis showing the impact upon transportation customers of implementing the full measure of the blended WACOC. The ESCOs noted that a residential customer in the DTI Area will experience an 8.8 percent increase and a commercial customer a 9.4 percent increase. The DTI Area of NYSEG represents about 60% of NYSEG's territory, including the Cities of Elmira, Ithaca, Cortland, Auburn, Geneva, Newark, Canandaigua, Oneonta and Norwich.

The ESCOs further said that, "implementation of the blended WACOC should be held in abeyance pending implementation of the new EBB system," that will permit pool-by-pool auto-balancing for daily metered cash out calculations.

The ESCOs also requested that the Commission direct the Companies to establish a "Reliability Collaborative" open to ESCO participation to provide a forum for review, analysis, and recommendations on capacity holdings and liquid points in the NYSEG and RGE territories.

"Given the application of the blended WACOCs the Companies' capacity activities will continually and materially impact upon ESCOs. As we are directly affected by these costs, at a minimum ESCOs should have the opportunity to provide their views and recommendations concerning their incurrence. In the Report, NYSEG merely indicates that it will update ESCOs regarding portfolio changes during GMOG meetings. This is inadequate and does not address the ESCO's request for a process by which the ESCO's would be able to engage in this process in a meaningful way," ESCOs said.

Case: 09-G-0716