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N.Y. PSC Confirms ESCO-Sourced Recharge New York Power Eligible for Delivery Discounts

September  20, 2011
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The delivery discounts under the Recharge New York economic development program shall apply to all amounts delivered under the program, whether they are sourced from the New York Power Authority or ESCOs, the New York PSC confirmed in an order yesterday (11-E-0176).

Under the Recharge New York program, 910 MW of electricity will be made available to eligible New York businesses and not-for-profit entities. This power allocation will consist of 455 MW of New York Power Authority hydroelectricity and 455 MW of market electricity purchased from NYPA or ESCOs by Recharge New York recipients.

Recharge New York recipients will also avoid the System Benefits Charge, the Renewable Energy Portfolio Standards surcharge, and the Energy Efficiency Portfolio Standards surcharge, for the customers' volumes associated with the Recharge New York program. Additionally, the Recharge New York volumes will not be included in the Revenue Decoupling Mechanism.

As only noted by Matters (8/29), statements from NYPA clouded whether delivery rate discounts would apply to any ESCO-supplied portion of the Recharge New York power, as NYPA described the discount as only applying to power, "sold by NYPA to Program participants."

If this description were interpreted as only applying the discount to the NYPA hydropower and NYPA-sourced market purchases, it would have discouraged customers from purchasing their market supply share of the Recharge New York power from ESCOs, since they would not receive a delivery rate discount for such power.

The PSC clarified in its order that a participant's total allocation of Recharge New York power should be exempt from the above delivery surcharges and RDM, "regardless of whether a participant purchases the market component from NYPA or purchases the market component from another source."

If the applicant opts to purchase the market component of Recharge New York power elsewhere, "such power is still considered RNY power, and therefore the participant is entitled to the discount," the PSC said.

The PSC's order also confirms that the delivery rate discounts will be limited to exemption from the SBC, RPS, and EEPS surcharges, and will not include reductions in base rates.

The Commission directed the utilities to file tariff amendments to become effective October 1, 2011, implementing discounted delivery rates for the delivery of Recharge New York power allocations.

These tariff amendments shall not include any customer charge or similar mechanism associated with the cost of providing service to Recharge New York participants.

However, to the extent the utilities believe they incur incremental costs for providing service to Recharge New York program participants (such as for load splitting service), the utilities can file additional tariff amendments to include a customer charge or similar mechanism to recover these costs. Such tariff amendments should include work papers to demonstrate that the proposed customer charge or similar mechanism recovers costs that are incremental to the amounts recovered in rates.

 

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