Arizona Commissioner Offers Amendment To TEP Rate Case Proposed Order That Would Allow All Customers To Be Eligible For Competitive Generation Program

Arizona Corporation Commissioner Justin Olson offered an amendment to a recommended order in Tucson Electric Power's rate case to adopt proposed modifications from retail suppliers to a proposed competitive generation buy-through program (Market Pricing Experimental Pilot Program or MP-EX), except that Olson would further modify the program to allow all customers to be eligible for the program (subject to its participation cap), with no minimum size or aggregation requirement for eligibility

As first reported by EnergyChoiceMatters.com, a recommended order from an ALJ would adopt an MP-EX competitive generation buy-through program as proposed by TEP, including modifications from Kroger to which TEP has agreed. In brief, the MP-EX program under the recommended order would be limited to a participation cap of 75 MW, and would be open to medium and large non-residential customers with demands (including aggregated demand) of at least 3 MW. Under TEP's proposal, customers may not displace with competitive generation more than 50 percent of the customer's average monthly peak demand based on the month of October through April.

See our prior story for full details on the recommended order's MP-EX program

In the proceeding, Calpine Energy Solutions, Constellation Energy, and Direct Energy Business (collectively known as "CCD") had recommended various changes to the MP-EX proposal. Notably, CCD proposed that the program's participation cap be increased to 120 MW. CCD would also allow participating customers to replace their entire load with competitive supply. As proposed by CCD, medium and large non-residential customers would need a peak demand of 2 MW (including aggregation) to be eligible to participate

Under the recommended order, customers electing MP-EX would avoid only TEP's Base Power Charges and PPFAC (Purchased Power and Fuel Adjustment Clause).

Under CCD's proposal, customers electing MP-EX would also avoid TEP's unbundled Generation Capacity charges, in addition to avoiding the Base Power Charges and PPFAC. A capacity reserve charge of $5.00 per kW-month would be applied to 100% of the customer's billed on peak kW. As in TEP's proposal, customers would also be charged a $1,000 per month billing fee and a monthly settlements fee of $500 for each service point billed under the program.

Olson's amendment would adopt CCD's proposed MP-EX program, but would expand the applicability of the program by removing the customer class restrictions and making it available to all TEP customers, with no aggregate requirements.

Olson's amendment notes that this expansion will require a revised fee schedule based on customer class.

Olson's amendment was raised during an ACC meeting yesterday, but other Commissioners did not substantively discuss their position on it. TEP opposed the amendment, likening the proposed broader program to a retail choice pilot, and stating that any such pilot should be addressed in the separate generic retail choice investigation docket

The ACC did not take a formal vote in the proceeding yesterday, and said that a vote will be taken at its meeting in two weeks

Docket E-01933A-19-0028