Duke Energy Files New Default Service Plan, Proposes "Price Stabilization" Rider

Duke Energy Ohio has filed for approval of an electric security plan governing the procurement and pricing of default service for the period June 1, 2015 to May 31, 2018

Duke would continue to rely on a mix of 12, 24, and 36 month full requirements, load following contracts, sourced in an auction, for SSO supply.

Two procurement dates would be held annually.

The laddering of the contracts and their procurement terms can be seen in this chart (click here).

One modification proposed by Duke is to convert the rates for capacity under current Rider RC to "energy-only" rates, thereby eliminating all existing demand charges currently applicable under the SSO tariff. "The changes to Rider RC will better align the overall SSO rates with offers that customers receive from competitive retail electric service (CRES) providers," Duke said.

Duke is proposing a price stability rider (Rider PSR) to address its ongoing generation entitlements in OVEC. Duke would sell all entitlements into the PJM market (entitlements would not be used for SSO load), and would allocate costs or credits to all customers on a nonbypassable basis.

However, while OVEC is the only plant specifically cited in the ESP, Duke also says that it, "further proposes Rider PSR as a rider in which additional contractual arrangements could be included to increase the benefits available to customers."

Regarding the need for the price stabilization rider, Duke said that, "the polar vortex confirms that most of Duke Energy Ohio's customers are subject to varying degrees of volatility in the price of capacity and energy whether they take service under the SSO or from CRES providers. Indeed, as a result of the polar vortex, it has become apparent that CRES contracts may contain provisions to allow for the flow through of incremental costs associated with drastic market price increases. It is the stability and predictability associated with OVEC's costs that will serve to benefit Duke Energy Ohio's retail customers."

Duke is also proposing to make POR mandatory for all suppliers using the company's consolidated billing service