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Noble Americas Energy Solutions Seeks Changes in PacifiCorp OATT to Remove Barriers to Retail Access
June 27, 2011
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Noble Americas Energy Solutions, LLC has protested at FERC revisions to the Open Access Transmission Tariff [OATT] of PacifiCorp, seeking changes to practices which Noble Americas says hinders retail access in Oregon (ER11-3643).
Among other things, Noble Americas has requested that real power losses assessed for delivery on PacifiCorp's distribution system differentiate between delivery at primary voltage and secondary voltage.
"In failing to differentiate between primary and secondary voltage, Schedule 10 [of the OATT] undermines the implementation of retail access in Oregon by burdening an ESS [Electricity Service Supplier] competing with PacifiCorp for retail customers with unduly high power losses when serving a primary voltage customer," Noble Americas said.
Schedule 10 of the OATT identifies the real power losses that are assessed for delivery on PacifiCorp's transmission system. Both the current and proposed Schedule 10 differentiate between usage at transmission-only voltage (46 kV or greater) and use of a combination of the transmission system and distribution system.
An Electricity Service Supplier (ESS) serving retail access load in Oregon must generally use PacifiCorp's distribution system to deliver service to retail customers. Retail customers on the distribution system in Oregon may either take service at primary voltage or secondary voltage. A retail access customer in PacifiCorp's Oregon service territory, Pacific Power, is also subject to a transition adjustment, which is applied either through Pacific Power Schedule 294 or Schedule 295. The former is applied to customers who choose a one-year direct access option, whereas the latter is applied to customers who choose a three-year retail access option. The purpose of the transition adjustment is to provide the appropriate credit or charge for customers who choose retail access service.
"The logical premise behind the transition adjustment is to credit or charge retail access customers the difference between PacifiCorp's net power cost and the estimated market value of the electricity that is freed up when a customer chooses direct access service. This is calculated by subtracting the former from the latter, after adjusting for power losses measured at the point of retail delivery. If the result is a positive number, the difference is applied as a credit to the direct access customer. If the result is a negative number, the difference is applied as a charge to the direct access customer," Noble Americas said.
The power losses measured at the point of retail delivery are published in Pacific Power Schedule 220. These are:
Transmission Delivery Voltage: 3.61%
Primary Delivery Voltage: 5.77%
Secondary Delivery Voltage: 9.18%.
As indicated in Pacific Power Schedule 220, a retail access customer being served by an ESS at primary voltage will be credited with avoiding power losses of 5.77% (measured at retail delivery).
However, pursuant to Schedule 10 of the OATT, Noble Americas said that an ESS serving this same customer must incur a power loss assessment that does not differentiate between primary and secondary voltage.
Specifically, Schedule 10 provides that any use of the PacifiCorp's transmission system shall be assessed real power losses in the following amounts:
Use of any portion of the Transmission System at a voltage of 46 kV or greater: 4.48%
Use of any portion of the Distribution System at a voltage of 34.5 kV or less: 3.56%
Use of a combination of PacifiCorp Transmission and Distribution System: 8.04%
In its currently proposed Schedule 10, PacifiCorp proposes to change the assessment for real power losses as follows:
Use of any portion of the Transmission System at a voltage of 46 kV or greater: 5.00%
Use of any portion of the Distribution System at a voltage of 34.5 kV or less: 3.56%
Use of a combination of PacifiCorp Transmission and Distribution System: 8.56%
"Pursuant to proposed Schedule 10, an ESS would charged 8.56% for losses (measured at input) for delivery to a primary voltage customer, but is credited only 5.77% (measured at retail delivery, which is equivalent to 5.46% measured at input) in the calculation of the transition adjustment," Noble Americas said.
"This disparity creates a material pricing disadvantage for the ESS serving a primary voltage (or transmission voltage) customer, which derives from the inconsistent structure by which power loss factors are assessed (or credited) between PacifiCorp's retail rate schedule in Oregon and PacifiCorp's OATT," Noble Americas argued.
Noble Americas maintained that the appropriate forum for curing this inconsistency is the OATT, rather than in the retail delivery tariff.
"Generally, primary voltage customers incur fewer power losses than secondary voltage customers. Thus, it would be unreasonable for rates charged to Oregon retail customers to ignore the differences between the cost of serving primary and secondary voltage customers in order to conform to the lack of differentiation in PacifiCorp's OATT," Noble Americas said.
Noble Americas further noted, aside from this structural inconsistency relating to the lack of differentiation, there are inconsistencies in the power loss percentages themselves.
While the retail tariff and OATT use different loss calculations ("at retail delivery" for the retail tariff and "at input" in the OATT) Noble Americas said that even after adjusting for the different point of measurement, there are still discrepancies among the percentages used by PacifiCorp.
"Specifically, measured at input, the power losses for transmission delivery in Pacific Power Schedule 220 are equivalent to 3.48% measured at input, compared to 5.00% proposed for Schedule 10. In addition, measured at input, the power losses for combined transmission and secondary distribution delivery in Pacific Power Schedule 220 is 8.41% compared to 8.56% proposed for Schedule 10," Noble Americas said.
"NAES is concerned that PacifiCorp appears to be perpetuating discrepancies between the loss factors used in its OATT and its Oregon tariff, to the unreasonable detriment of retail access in Oregon. Therefore, NAES requests that prior to approval of its Schedule 10 power loss factors, PacifiCorp be required to explain and reconcile the differences between the power loss factors proposed for Schedule 10 and those that PacifiCorp uses in its retail rate schedules in Oregon," Noble Americas requested.
Finally, Noble Americas noted that current Section 7 (c) of OATT Attachment M states that the current Oregon Direct Access Monthly Demand charge rate is available for inspection at a website address, www.oasis.pacificorp/oasis/ppw/currentLRS.pdf. However, in PacifiCorp's proposed OATT, the language in this section that directs interested parties to the website where they can find the Oregon Direct Access Monthly Demand rate is stricken.
"The striking of this language appears to have no useful purpose except to make it more difficult for an ESS to ascertain the Oregon Direct Access Monthly Demand charge rate. This proposed change is inferior to the current version of the OATT and should be rejected," Noble Americas said.
Noble Americas said that it serves more than 15,000 retail customer sites nationwide, with an aggregate load in excess of 4,500 MW.
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