Energy Curtailment Specialists Seeks Changes to Maryland Gap RFP Contracts Due to Shortage in Meeting Obligations

July 14, 2011
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Energy Curtailment Specialists, Inc. has petitioned the Maryland PSC to amend its demand response capacity agreements with Pepco and Delmarva Power, after failing to obtain the required capacity resources under the contracts for the 2011-12 delivery year at each of the utilities.

The demand response contracts were awarded to Energy Curtailment Specialists under the PSC's "gap RFP" process, and obligate ECS to provide a redacted amount of capacity from the 2011-12 delivery year through the 2014-15 delivery year (Case 9149).

EnerNOC has also sought similar relief from the PSC due to its inability to provide the awarded capacity (see 6/29), raising serious questions regarding the Gap RFP process and performance thereunder.

The gap RFPs, an outgrowth of the Commission's evaluation of the SOS procurement process and its concern with reliability and lack of new capacity under the Reliability Pricing Model, procured demand resources via nonbypassable surcharge on distribution customers, with no impact on SOS pricing.

ECS redacted the amount of the shortfall at Pepco and Delmarva. ECS has fulfilled its obligation for the awarded demand response capacity at Baltimore Gas & Electric.

ECS is seeking a modification to the contract to allow the use of either Interruptible Load for Reliability (ILR) resources or Demand Resources, as each is defined by PJM, to meet the contractual obligation for ILR resources. Even with the allowance for the use of Demand Resources, ECS is still short of its obligation at Pepco and Delmarva, and sought to lower the amount required under the contract (with the specifics redacted).

ECS said that the change would not impose costs on ratepayers, since the contract price calls for no payment associated with the 2011-12 delivery year (with resources compensated solely through the PJM mechanism and not ratepayers).

ECS also said that its sought changes would not impact reliability, as PJM has said that it has adequate supply.

Under ECS's motion, it does not take a position on whether it has failed to perform a material obligation under the agreement, or otherwise defaulted on the agreement.

The Pepco companies have taken no position on the petition.

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