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FirstEnergy Solutions Seeks RPM-Priced Capacity for All Government Aggregation Load at AEP Ohio

September  29, 2011
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Should the Public Utilities Commission of Ohio accept a non-unanimous stipulation regarding AEP Ohio's electric security plan, FirstEnergy Solutions sought, at a minimum, to require AEP to provide RPM-priced capacity to governmental aggregation loads, and for such loads to be excluded from the RPM-set aside caps.

FirstEnergy Solutions attacked nearly all aspects of the settlement, from the nonbypassable market transition rider, to the contemplated ratebased generation, to the prolonged transition to auction-based default service, and the establishment of a $255/MW-day capacity price for load not eligible for lower, RPM-priced capacity under caps which will be established for the RPM set-aside (see 9/7)

FirstEnergy Solutions particularly focused on the impacts from the set-aside cap on government aggregation. Customers can join the RPM set-aside queue only after they have signed a contract with a retail provider. This obviously does not occur under opt-out aggregation.

AEP Ohio has stated that a governmental aggregation community's contract with a retail provider does not qualify for placement in the set-aside queue. AEP Ohio will include governmental aggregation customers in the queue only when they are enrolled, after the opt-out/opt-in process.

Assuming PUCO does not make RPM-priced capacity available to all opt-out aggregations, FirstEnergy Solution said that the Commission should require AEP Ohio to accept an affidavit of a governmental aggregation community's contract with a retail provider as the only requirement to secure the governmental aggregation customers' right to get into the set-aside queue.

After deducting current shopping levels from the RPM set-aside caps, "it becomes clear that the caps provide for little increase in shopping," FirstEnergy Solutions said. "In fact, the caps allow for only 7% additional shopping in 2012, up to 17% additional shopping in 2013, and 27% additional shopping in 2014, based on current shopping data provided by AEP Ohio."

"Indeed, AEP Ohio recently announced that 70% of the caps were already met by customers who are currently shopping or provided notice to AEP Ohio prior to September 7, 2011. Specifically, AEP Ohio announced that the commercial class had already exceeded its initial pro rata allotment, which then reduced the pro rata allotments initially reserved for residential and industrial customers. AEP Ohio further believes that the industrial customers, too, will soon exceed their pro rata allotment for 2012, based on customers who have provided notice after September 7, 2011," FirstEnergy Solutions said.

"Further, AEP Ohio's recent announcement that the commercial class has already exceeded its pro rata allotment for 2012 means that the pro rata allotment for residential customers has been lowered. The remaining allotment would not even accommodate the communities that have passed ballot initiatives and those that have a November ballot initiative," FirstEnergy Solutions added.

FirstEnergy Solutions reported that legislation authorizing approximately 30 communities in AEP Ohio's service territory to governmentally aggregate has already passed, but only two of those communities have completed governmental aggregation. However, there are ballots scheduled for November 2011 that would authorize governmental aggregation for another 50+ communities in AEP Ohio's service territory.

FES said that these November ballot communities reflect approximately 300,000 households and over 6,000 small commercial establishments.

Another group of approximately 14 communities is considering legislation for the May 2012 ballot. These potential May ballot communities reflect approximately 650,000 more households and 3,000 more small commercial establishments.

However, FES expects that customers under these aggregations will not be allotted RPM-priced capacity under the set-aside.

FES also said that it willing to offer to serve AEP Ohio's Percentage of Income Payment Plan customers under a bilateral wholesale contract at 5% off the price-to-compare, if such customers received RPM-priced capacity and this allotment of RPM-priced capacity does not count towards the caps proposed in the Revised ESP.

 

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