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Allegheny Power Using Estimate of Reconciliation Factor in Providing Weighted Average Maryland SOS Rates, OPC Says
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Maryland utilities are using different approaches for the treatment of bypassable reconciliation factors in calculating weighted average SOS prices disclosed to customers, the Office of People's Counsel said in supplemental comments to the PSC.
OPC's comments followed earlier comments seeking greater consistency in the provision of SOS price comparison information to customers (see 3/8 story).
OPC noted that BGE and the Pepco Holdings utilities do not include the reconciliation factor (e.g. the Energy Cost Adjustment or Procurement Cost Adjustment) when calculating the weighted average SOS price, since the reconciliation factor is typically not known for the entire period covered by the weighted average price.
In contrast, OPC said that it appears Allegheny Power is including an Energy Cost Adjustment amount of 0.337 cents/kWh in the weighted SOS average calculation for the entire period beginning June 1, 2011. "It has been OPC's position that excluding the true-up factor for future periods provides the best information on the premise that the true-up factor could be a positive or negative number and tends to be a small amount in either case," OPC said.
However, OPC called the 0.337 cents/kWh reconciliation factor at Allegheny "significant," since it equals about 4% of the SOS rate. Given that the number appears much larger at Allegheny, OPC allowed that it might be necessary for Allegheny to include an estimated reconciliation factor in the weighted average, "to avoid giving out misleading information." OPC said that more information should be provided to customers regarding the estimate, however.
PSC Staff recommended that the front of each utility's webpage provide a Supply Price Comparison advertisement or dedicated section linking to Customer/Energy Choice information. "[I]t remains difficult to find the supply price comparison information on all the utility websites," Staff said.
"Critically, the supply portion of the residential customer's bill consists of the majority of the costs; therefore, it is vital to provide information in a timely fashion and draw attention to helpful information regarding the supply rates on their bills," Staff said.
Staff also said that Allegheny should, "display [its] SOS rate in the same manner as the other [utilities]." Staff was responding to the format Allegheny had used, which has since been updated, for providing SOS price disclosures late last summer.
However, OPC noted the new situation at Allegheny cited by Matters in our 3/8 story; specifically, that Allegheny is providing two weighted averages in its SOS price comparison information, but is not listing all of the "known" actual future rates.
As previously noted, the March Allegheny bill did not list the "known" actual SOS rates for the SOS periods beginning June 1, 2011 and October 1, 2011, despite these base SOS rates having been adopted by the Commission in late February. The March Allegheny bill did provide a weighted average rate for the period beginning June 1, 2011, however.
"If the procurement for those periods is complete and the tariff pages approved, the SOS pricing information should include the rates for all known periods," OPC said.
OPC also said that Allegheny's provision of a weighted average for the period beginning June 1, 2011 is confusing as Allegheny did not list the duration for this weighted average price (under the PSC's pro forma language, typically the weighted average is provided as lasting through a specific end date, rather than providing a start date).
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