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PUCT Staff Says Discretionary Service Charges Must Be Lowered as Part of TNMP Advanced Metering Plan
April 18, 2011
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Texas-New Mexico Power should be ordered to reduce discretionary service charges annually as part of any order approving its advanced meter deployment plan, PUCT Staff said in direct testimony (38306).
Discretionary service charges include fees for disconnections, reconnections, Move-Ins, and similar services.
While TNMP's original testimony contemplated reduced discretionary service charges as advanced meters are deployed, with the charges updated in a rate case or annually on January 1, TNMP said in a subsequent RFI that discretionary service charges are used to credit TNMP's overall cost of service, and that there are no cost savings to be realized from deployment of the advanced metering system either in base rates or the advanced metering system surcharge.
In response to another RFI, TNMP further said that it does anticipate some operational savings from the advanced metering system deployment, but that it will only be able to identify those savings once deployment is underway.
Staff stressed that a specific commitment for cost reductions in discretionary service charges (DCSs) should not be delayed until deployment is underway. "The Commission has set a precedent for aggressive reductions in DSCs resulting from the savings associated with deployment of AMS in the Final Orders issued in the three cases for Oncor, CenterPoint, and AEP - Texas," Staff noted.
"The realization of savings through the reductions in DSCs is an integral component of the deployment of advanced meters in Texas. It provides for a sharing of the benefits resulting from deployment among customers and the utility. Customers paying the [advanced meter] surcharge but without an advanced meter can enjoy the benefits of the deployment through these reductions in common services in the DSCs - such as out of cycle meter reads for switching from one REP to another, reconnections following disconnections for non-payment, move-in and move-out, etc," Staff added.
"These reductions are also important for the retail electric market in ERCOT to continue to mature. This is because the reductions in DSCs allow the REPs to more ably offer dynamic products to customers. These dynamic products such as prepaid service, time of use, and real time pricing products in the aggregate, can over time help manage peak demand," Staff said.
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