|
Consulting |
Search |
Conn. Senate Passes Bill Requiring Portfolio Management for Standard Service, Additional Customer Protections
June 6, 2011
Email This Story
The Connecticut senate passed unanimously SB 1243 which revises the procurement methodology for standard service, and includes several new customer protection measures for customers of electric suppliers.
The bill appears likely to clear the House, and Gov. Dannel Malloy is expected to sign the legislation.
The bill calls for the newly created Department of Energy and Environmental Protection to annually develop a plan for the procurement of electric generation services and related wholesale electricity market products, "that will enable each electric distribution company to manage a portfolio of contracts to reduce the average cost of standard service while maintaining standard service cost volatility within reasonable levels."
"Each procurement plan shall provide for the competitive solicitation for load-following electric service and may include a provision for the use of other contracts, including, but not limited to, contracts for generation or other electricity market products and financial contracts, and may provide for the use of varying lengths of contracts. If such plan includes the purchase of full requirements contracts, it shall include an explanation of why such purchases are in the best interests of standard service customers," the bill states.
The annual plan may be modified to take advantage of favorable market conditions. The costs of procurement for standard service shall be borne solely by the standard service customers.
Additionally, upon the request of an electric distribution company, the Department of Energy and Environmental Protection shall initiate a docket to consider the buy down of an electric distribution company's current standard service contract to reduce ratepayer bills and conduct a cost benefit analysis of such a buydown. If the department, as a result of such docket, determines such a buydown is in the best interest of ratepayers, the company shall proceed with such buydown.
On or before January 1, 2012, and from time to time thereafter, the Department of Energy and Environmental Protection shall initiate a generation evaluation and procurement process. The evaluation process shall entail a nonbinding prequalification process to identify potentially eligible new generators. Interested generators shall submit to the department information demonstrating how the generator will reduce electric rates for Connecticut ratepayers while maintaining or improving reliability, improving environmental characteristics of the Connecticut generation fleet and providing economic benefit to Connecticut.
If the department makes a determination of eligibility of one or more generators, it shall issue a request for proposals to consider bilateral purchasing contracts from new generators by pricing such electricity on a cost-of-service basis, power purchase agreement, or other mechanism the department determines to be in the best interest of Connecticut customers, so that such contracts shall directly or indirectly, or in combination with other initiatives, provide electricity at lower rates for Connecticut consumers. Such contracts shall be for a term of not less than five and not more than twenty years and shall provide that development, construction and operation risk be borne by the generator. Generators shall be awarded contracts based on criteria, including, but not limited to, reduction of rates, generator's heat rate, decrease in regulated pollution and cost effectiveness.
Last Resort Service would remain subject to quarterly procurements.
Electric Supplier Regulations
The bill requires each electric supplier to provide each customer with a demand of less than 100 kW a written contract, but does not require the use of a wet signature for all enrollments.
Each contract for electric generation services shall contain all material terms of the agreement, a clear and conspicuous statement explaining the rates that such customer will be paying, including the circumstances under which the rates may change, a statement that provides specific directions to the customer as to how to compare the price term in the contract to the customer's existing electric generation service charge on the electric bill and how long those rates are guaranteed.
Additionally, the contract shall also include a clear and conspicuous statement providing the customer's right to cancel such contract not later than three days after signature or receipt of the contract, and describing any penalty for early termination of such contract.
A customer who has a maximum demand of 500 kW or less shall, until midnight of the third business day after the latter of the day on which the customer enters into a service agreement or the day on which the customer receives the written contract, have the right to cancel a contract for electric generation services entered into with an electric supplier.
Any third-party agent who contracts with or is otherwise compensated by an electric supplier to sell electric generation services shall be a legal agent of the electric supplier. No third-party agent may sell electric generation services on behalf of an electric supplier unless (A) the third-party agent is an employee or independent contractor of such electric supplier, and (B) the third-party agent has received appropriate training directly from such electric supplier.
On or after July 1, 2011, all sales and solicitations of electric generation services by an electric supplier, aggregator or agent of an electric supplier or aggregator to a customer with a maximum demand of 100 kW shall, among other things, provide a statement that the agent does not represent an electric distribution company.
Additionally, for door-to-door sales to customers with a maximum demand of 100 kW, solicitations shall be conducted (i) in accordance with any municipal and local ordinances regarding door-to-door solicitations, (ii) between the hours of 10 o'clock a.m. and 6 o'clock p.m. unless the customer schedules an earlier or later appointment, and (iii) with both English and Spanish written materials available.
Additionally, each electric supplier shall only advertise renewable energy credits purchased beyond those required pursuant to the RPS.
The bill also limits residential early termination fees to the lesser of (A) $100; or (B) twice the estimated bill for energy services for an average month.
"An electric supplier shall not make a material change in the terms or duration of any contract for the provision of electric generation services by an electric supplier without the express consent of the customer. Nothing in this subdivision shall restrict an electric supplier from renewing a contract by clearly informing the customer, in writing, not less than thirty days nor more than sixty days before the renewal date, of the renewal terms and of the option not to accept the renewal offer, provided no [termination] fee pursuant to subdivision (6) of this section shall be charged to a customer who terminates or cancels such renewal not later than seven business days after receiving the first billing statement for the renewed contract."
Customers will not be permitted to waive any protections contained in the bill.
Suppliers may continue to utilize utility consolidated billing, provided that they pay a pro rata share of such costs. The Public Utilities Regulatory Authority within the Department of Energy and Environmental Protection shall conduct a proceeding to determine the cost of billing, collection and other services provided by the electric distribution companies or the department solely for the benefit of participating electric suppliers and aggregators, and order an equitable allocation of such costs among electric suppliers and aggregators.
As part of this same proceeding, the department shall also determine the costs that the electric distribution companies incur solely for the benefit of standard service and last resort service customers. After such determination, the department shall allocate and provide for the equitable recovery of such costs from standard service or last resort service customers.
The bill also states that the requirement for department regulations to provide guidelines for determining, "the billing relationship between the electric distribution company and electric suppliers, including, but not limited to, the allocation of partial bill payments and late payments between the electric distribution company and the electric supplier," expires October 1, 2011.
The bill requires electric suppliers to offer a time-of-use price option to customers. Such option shall include a two-part price that is designed to achieve an overall minimization of customer bills by encouraging the reduction of consumption during the most energy intense hours of the day. The supplier shall file its time-of-use rates with the Public Utilities Regulatory Authority.
EDC Renewable Generation Provisions
The bill allows an electric distribution company to build, own, or operate Class I renewable energy generation facilities, with the EDC's ownership stake not exceeding 10 MW. The EDC may enter into a joint venture with a private developer, in which case the generation projects could total 30 MW, so long as the EDC's share remained capped at 10 MW.
Additionally, individual renewable facilities constructed under this provision are limited to 1-5 MW in size.
The bill calls for the EDC to use the power, capacity, and related products produced by the renewable facilities to meet the needs of default service customers. However, nothing shall preclude the market sale of any products from the facility, in which case such costs/benefits shall be recovered via nonbypassable surcharge.
Additionally, the bill allows the electric distribution companies to conduct solicitations for long-term REC contracts from customer-sited distributed resources, with RECs either being used for default service, or sold into the market with nonbypassable cost recovery.
The bill also calls for the department to study the costs and benefits associated with participating in ISO New England and any potential benefits of joining another independent system operator or operating outside of the existing independent operator systems, with an examination of the framework within the Federal Energy Regulatory Commission that has contributed to the state's high rates.
Email This Story
Copyright 2010-
Be Seen By Energy Professionals in Retail and Wholesale Marketing
Run Ads with Energy Choice Matters
Call Paul Ring
954-
|
Consulting |
Search |