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Connecticut Draft Would Expand Mandatory Time of Use Generation Rates to All Default Service Customers
August
5, 2011
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The Connecticut PURA issued a draft decision which would require the expansion of mandatory Time of Use (TOU) generation rates to all default service customers at United Illuminating, and which would also expand optional Variable Peak Pricing to all customers (05-06-04RE06).
Under the draft, UI would be directed to move residential customers onto Rate RT under the following schedule. Currently, residential customers with monthly consumption above 2,000 kWh are on Rate RT, which includes a simple peak/off-peak differentiation for generation rates.
Proposed Expansion of Rate RT:
January 1, 2012 - Any residential customer who consumes more than 1,750 kWh in a single month (30-day billing period) will be placed on Rate RT within three months
January 1, 2013 - Any residential customer who consumes more than 1,500 kWh in a single month (30-day billing period) will be placed on Rate RT within three months.
January 1, 2014 - Any residential customer who consumes more than 1,250 kWh in a single month (30-day billing period) will be placed on Rate RT within six months.
January 1, 2015 - Any residential customer who consumes more than 1,000 kWh in a single month (30-day billing period) will be placed on Rate RT within six months.
January 1, 2016 - Any residential customer who consumes more than 750 kWh in a single month (30-day billing period) will be placed on Rate RT within six months.
January 1, 2017 - Any residential customer who consumes more than 500 kWh in a single month (30-day billing period) will be placed on Rate RT within six months.
January 1, 2018 through December 31, 2019 - All remaining residential customers will be placed on Rate RT through a phase-in to be determined by UI.
Furthermore, TOU rates would be expanded to small business customers as well. Currently, customers with a monthly demand in excess of 100 kW are subject to TOU rates. Rate GST includes a simple peak/off-peak distinction for generation.
Proposed Expansion of TOU Commercial Rates:
January 1, 2012 - Any business customer whose monthly demand exceeds 80 kW will be placed on a TOU rate within three months.
January 1, 2013 - Any business customer whose monthly demand exceeds 60 kW will be placed on a TOU rate within three months.
January 1, 2014 - Any business customer whose monthly demand exceeds 40 kW will be placed on a TOU rate within three months.
January 1, 2015 through December 31, 2016 - All remaining business customers will be placed on a TOU rate through a phase in to be determined by UI.
Additionally, PURA would also approve the expansion of a Variable Peak Pricing generation rate option for all customers, and approve UI's expansion of Variable Peak Pricing to all 24 hours of the day, as opposed to peak periods only as done currently. Unlike with the to-be mandatory TOU rates, which are fixed for a set period of time, the opt-in Variable Peak Pricing generation rates vary daily based on projected average day-ahead LMPs.
At this time, PURA is requiring UI to use its Standard Service and Last Resort Service supply contracts to serve customers who opt for Variable Peak Pricing. However, these supply contracts do not reflect the real-time generation market and/or pricing envisioned by the Legislature, the draft notes. "Therefore, it is inappropriate to rely on these contracts as a long term strategy for offering VPP or other dynamic pricing options that may become available. At some point VPP generation service must be procured in the market as a supply option provided by a third party supplier to eliminate the need for UI to administer this rate through the pricing scheme being approved herein," the draft finds.
"The Authority finds that although customers have not requested VPP pricing it is appropriate to include a request for this generation service option as part of UI's procurement process to establish a cost based rate and determine how the market values this product. Therefore, UI will be required to include a request for VPP generation service as part of the Company's procurement process," the draft states.
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