RESA Asks N.Y. PSC to Remove Electric Default Service Rates from Power to Choose Site

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The Retail Energy Supply Association has submitted a petition to the New York PSC to eliminate the posting of electric default service rates on New York's Power to Choose website, citing the, "confusing, inaccurate and misleading" reporting of utility commodity pricing.

ESCOs are required to post on Power to Choose, by the fifth day of each month, the price of each generally available product that would have been charged on the first day of the month. Default service rate reporting by the utilities was not mandated by the PSC's ESCO price reporting order, but the default service rate is listed first on the Power to Choose charts.

RESA said that, "the information provided by the electric utilities on the web site is highly divergent, inconsistent and apparently not tethered to any overarching uniform standard." Indeed, each utility's unique default service pricing mechanism makes the creation of any standard reporting impossible.

"Moreover, the confusion derived from the lack of uniformity and consistency related to utility default service pricing may serve to impede customer shopping," RESA said.

For example, RESA said that Consolidated Edison's unique commodity pricing mechanism makes it, "virtually impossible for the utility to make any representation to consumers concerning the specific rate any particular customer will be charged."

This is because under the ConEd Market Supply Charge, "[t]he cost of energy per kilowatt hour applicable to each customer's billing period will be based on NYISO day-ahead Locational Based Marginal Price, load-weighted by the applicable rate class's hourly load shape."

As such, ConEd no longer provides a projected rate for a monthly period and instead calculates the default service rate on an after-the-fact basis using the day-ahead LBMPs for the applicable billing period using the methodology described above.

In light of this pricing structure for which the default rate is not known until the completion of the billing cycle, "it is totally inaccurate for Con Edison to report at the beginning of each month that a residential rate for March or any other monthly period was set at a specific rate per KWH," RESA said.

ConEd currently posts the prior month rate on Power to Choose, with an explanation stating that, "[t]he listed commodity price is for the month of February 2011, not March 2011. Con Edison's commodity price for electric is available at a one month lag due to day-ahead pricing."

However, RESA said that this rate, "provides no indication whatsoever to the residential customer what the actual rate will be for service provided during the applicable month listed on the web site."

RESA said that even in other service areas where a monthly forecast is produced for the following month, such as Orange & Rockland, "additional problems regarding the accuracy of that information are also created."

In particular, RESA noted that the ultimate monthly rate is subject to an adjustment to reflect prior period adjustments and/or the impact of hedging. "Thus, it is conceivable that even where a utility has a forecast commodity cost available as of the first of March, the ultimate rate to the consumer will be different due to the adjustments that will be applied but which will not be available until a later period in the month," RESA said.

Other aspects of the current reporting which may be confusing to customers cited by RESA include NiMo's listing of the commodity rate, which states that, "[c]ommodity rates change on a daily basis. The rate per kWh listed is the commodity rate effective March 2, 2011."

Given such "infirmities," and the fact that the price reporting order imposed no obligation on utilities to post default service rates, RESA requested that the PSC remove the electric default service rates from the Power to Choose site. At a minimum, RESA said that the default rate for utilities which do not provide a monthly forecast (such as ConEd) should not be listed, since, "the utility has no idea what the price will be as of the first of the month and any information posted on the web site will be incorrect."

RESA's petition was filed in Case 98-M-1343.

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