Ohio Utility Seeks To Create Standby Charge For Governmental Aggregations -- EnergyChoiceMatters.com

Ohio Utility Seeks To Create Standby Charge For Governmental Aggregations

Proposed Standby Charge Part Of New Default Service Plan

January 6, 2023

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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AEP Ohio filed at the PUC of Ohio for approval of an electric security plan (also referred to as the 'ESP' or the 'proposed ESP' or 'ESP V') that will commence upon the expiration of the current ESP IV (June 1, 2024) and continue through May 31, 2030

While some of the ESP testimony from AEP Ohio was available, all of the supporting testimony of AEP Ohio's plan was not available on PUCO's DIS site as of publication time. Further details will be reported when available

Thus far, the most notable provision of the ESP filing is a proposed a placeholder (zero) standby charge, called the Government Aggregation Standby Rider ('GASR'), for municipal aggregators that wish to pay an 'insurance premium' in order for customers to be returned to the SSO rate if the aggregator should drop the customers prior to the end of the contract period.

This charge would be remitted to the auction winners in order to compensate the SSO suppliers for the risk of aggregation customers returning to the SSO.

As proposed, if a government aggregation program elects not to subscribe to standby service, customers dropped back to SSO service during the term of the aggregation program will be served at then-market prices for a minimum period of two years, with AEP Ohio recovering its full cost of such market procurement, including administrative costs, from those dropped customers

Initially, AEP Ohio would serve dropped muni aggregation load, for an aggregation that hasn't paid the standby charge, through daily market purchases. A supplemental auction process would then be initiated to serve the dropped customers, similar to the current SSO auction rules under a default scenario.

With respect to the procurement of standard service offer supplies, AEP Ohio would generally continue its current auction approach

See a proposed auction schedule with product term lengths here

To ensure the SSO obligation is met on and after June 1, 2024, AEP Ohio will have two initial auctions prior to June 1, 2024. Following the semi-annual auction schedule currently in place, the first auction will be held in November 2023, and the second in March 2024. Each auction will seek to procure 50% of the SSO load, or 50 tranches. The 50 tranches at bid in the November 2023 auction will be broken into two separate products: 24-month and 12-month. In the November 2023 auction, the 24-month product will be for 33 tranches and the 12-month will be for 17 tranches. The 50 tranches at bid in the March 2024 auction will be broken out into three separate products: 36-month, 24-month, and 12-month. The 36-month product will be 16 tranches, and the 24-month and 12-month products will be for 17 tranches each

AEP Ohio will then offer a 12-month product in each of its November 2024 and March 2025 auctions, each for 17 tranches. AEP Ohio will offer a 36-month, 24-month, and 12-month product in its November 2025 auction. In the November 2025 auction, the 36-month product will be for 16 tranches, and the 24-month and 12-month products will be for 17 tranches each. AEP Ohio will offer a 24-month and 12-month product in its March 2026 auction (17 tranches of each product). The November 2026 auction will offer a 12- month product for 17 tranches and the March 2027 auction will offer 17 tranches of a 12- month product and 16 tranches of a 36-month product. The November 2027 and March 2028 auctions will each offer a 12-month and 24-month product (17 tranches of each product in each auction). The November 2028 auction will offer 17 tranches of a 12-month product and the March 2029 auction will offer 33 tranches of a 12-month product. The supply term of the 12-month product offered in the November 2028 and March 2029 auctions will expire on May 31, 2030.

Under this proposed schedule, AEP Ohio will offer a 36-month product in the auction three times during the six-year ESP V period; and in most instances, for each auction, products in the auction will be replacing the same product which is set to expire.

AEP Ohio is generally not proposing any changes in the composition of bypassable retail SSO rates.

AEP Ohio said in an overview that the Company proposes to continue its placeholder Retail Reconciliation Rider ('RRR') and SSO Credit Rider ('SSOCR') consistent with the Commission’s decision to approve the riders as $0 placeholders as set forth in the November 17, 2021 Opinion and Order in Case No. 20-585-EL-AIR. These riders, if implemented in a non-zero amount, would address the payment of SSO costs by shopping customers in distribution rates, by implementing a new bypassable rider whose revenue is then credited back to all distribution customers. However, AEP Ohio would continue the riders on a placeholder basis, and it does not appear AEP Ohio is seeking to establish non-zero amounts for the riders

AEP Ohio's proposed ESP includes a new rider to recover capital investment and expenses associated with the Company’s proposed Community Grid Resiliency ('CGR') Pilot Program that consists of four components: portable distributed energy resources – small scale; portable distributed energy resources – small scale; onsite batteries and portable distributed energy resources – site specific; and community micro-grids

Case 23-0023-EL-SSO

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