|
Consulting |
Search |
New Default Service Rate Mechanism Approved at Niagara Mohawk
July 18, 2011
Email This Story
The New York PSC has approved, without major modification, a revised electric default service commodity rate mechanism at Niagara Mohawk (10-E-0050).
As only reported by Matters, the accepted modifications include revising the basis for setting the retail commodity rates charged to NiMo's residential and small commercial customers, implementing new reconciliation mechanisms for recovering electric supply costs that are not recovered by the retail commodity rates, and revising the manner in which the company allocates the costs of procuring capacity to its supply customers (3/11).
Most of the changes will take effect on January 1, 2012, as proposed by NiMo. The exception is the change in the allocation of capacity costs, which the PSC ordered to take effect May 1, 2012, in order to align with the start of the annual New York ISO capability period.
For non-hourly customers, NiMo will change the manner in which commodity rates are determined, from being based on hourly NYISO Day-Ahead prices to a forecast of NYISO Day-Ahead prices derived using monthly forward trading market prices, obtained approximately four days prior to the forecast month.
Additionally, NiMo will implement a new mechanism, the Electric Supply Reconciliation Mechanism (ESRM), to reconcile all commodity costs and revenues not related to non-bypassable legacy hedge contracts and the NYPA hydropower contracts.
Specifically, the ESRM will reconcile: (i) the costs and benefits of "New Hedges" (after June 1, 2001) as well as costs associated with procuring and maintaining the New Hedges; (ii) timing of actual expenses and revenues; (iii) forecast and actual monthly prices for mass market customers; (iv) capacity costs; (v) ancillary services costs; and (vi) prior reconciliations that would have flowed through the Commodity Adjustment Charge prior to January 1, 2012.
The ESRM will be reflected on the commodity portion of customers' bills.
The PSC's order confirms that the bypassable new hedge adjustment under the ESRM will apply exclusively to mass market customers (SC-1, SC-1C and SC-2 Non-Demand).
Costs of legacy hedges (along with the benefit from NYPA hydropower) will remain nonbypassable, though recovered under a new Legacy Transition Charge given that the Competitive Transition Charge will be eliminated. Legacy hedges will not impact bypassable commodity rates, and the PSC's order confirms that NYPA hydropower reconciliations will also appear on the delivery portion of bills.
Regarding capacity, NiMo will base the Locational Based Marginal Capacity Price on the NYISO Capacity Spot Market price, rather than the current price from the six-month block auction.
Furthermore, NiMo will institute a capacity tag system for customers eligible for mandatory hourly pricing.
For non-hourly customers, NiMo will change the factor it uses to estimate customers' usage during the NYISO system peak and thus customers' share of capacity costs. Specifically, NiMo will start using the demand of the class at the NYISO peak hour as opposed to the demand of the class during the hour in which the class itself peaks.
The Commission's order confirms that NYISO demand curve charges shall be included in the capacity cost calculations for all customers.
The Commission declined to require any additional reporting on NiMo's hedges as requested by the Retail Energy Supply Association.
Furthermore, the PSC found that NiMo has answered RESA's concerns about utility consolidated billing. NiMo clarified that it is not proposing to alter the Rate Ready billing model and will continue to provide the billing rate shells populated with its supply prices. In addition, as part of NiMo's outreach and education effort, it will host a meeting with the ESCOs to discuss any potential impact the changes to the various rate mechanisms herein may have on ESCO billing options.
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 |