Workgroup Leaders Propose TOU Pilot Program To Be Offered By Retail Supplier, As Well As Option For SOS Customers

The workgroup leaders in a Maryland PSC rate design proceeding (PC44) have filed proposals for two pilot programs to offer customers Time of Use rates -- one of which relies on a retail supplier to offer dynamic supply prices, and another designed for SOS customers that would offer TOU rates for delivery service only.

The workgroup leaders noted that a group consensus on TOU pilots could not be reached, stating, "we believe that one of the most substantial obstacles to achieving workgroup consensus was differing stakeholder views on role of retail choice and standard offer service ('SOS') in the pilot programs."

The workgroup leaders stated that they were "mindful" of the Commission’s prior direction, in opening PC44, to encourage the private market to offer time-varying rates

"This report reflects the workgroup leaders’ best attempt to accommodate the various, and often times disparate, stakeholder views by outlining two pilot programs: one with SOS only and one with retail supply only. We felt it prudent to differentiate between the SOS and retail supply option to provide customers different pilot programs with understandable choices on pricing and time periods and the Commission with more Maryland-specific data about time-varying rate designs, including what pricing may be meaningful to customers," the leaders said

Both pilots -- the Retail Supplier TOU pilot (offering service from a retail supplier) and SOS pilot (customer remains on SOS) -- would be offered on an opt-in basis to residential customers at BGE, Pepco, and Delmarva (excluding net metering customers).

The Retail Supplier pilot would be offered for a period of 18 months, starting May 1, 2018. The SOS pilot would be offered for a period of 24 months, starting May 1, 2018

Under the Retail Supplier TOU pilot, there would be a sole retail supplier in each utility territory offering service under the TOU pilot. The supplier would be selected via competitive RFP

Under the Retail Supplier TOU pilot, there would be a 3-hour peak in summer (June-Sept.), with a 2:1 peak/non-peak ratio for the supply rate. There would not be a non-summer peak period

The retail supplier rate would be fixed for 18 months under the Retail Supplier pilot.

The Retail Supplier TOU pilot would also include peak and off-peak distribution rates.

There would be no early termination fees under the Retail Supplier pilot, and customers would be permitted to leave at any time

"Rollover of [Retail Supplier TOU pilot] customers to new contracts with supplier would be guided by RFP language and include specific consumer protections to be included in RFP," under the proposal

Under the SOS pilot, customers would still receive the standard, flat SOS rate. The supply rate would not be time-based under the SOS pilot. Only distribution rates would be time-based under the SOS pilot.

Under both pilots, customers will be responsible for payment at the rates/usage prescribed in the pilots (i.e. customers will not be provided with a "best of lower bill guarantee" at the end of the pilots to avoid bias in pilot design).