Proposed Government Aggregation Standby Rider Removed, Capacity Proxy Price Added As Part Of Default Service Plan Settlement

Stipulation Would Require New Utility CIS To Accommodate Supplier Consolidated Billing, Accelerated Switching

New Residential Smart Thermostat Demand Response Program, Open To Retail Suppliers, Would Be Funded

September 6, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Major parties to the electric security plan (ESP) proceeding of AEP Ohio have entered into a stipulation which would approve an ESP (ESP V) for a term of June 1, 2024 through May 31, 2028

Signatory parties include AEP Ohio, Staff of the Public Utilities Commission of Ohio, the Ohio Energy Leadership Council, Ohio Energy Group, Retail Energy Supply Association, Interstate Gas Supply, and Ohio Partners For Affordable Energy, among others. The Ohio Consumers' Counsel is not a signatory party

The stipulation provides that, "The Company’s proposed Governmental Aggregation Standby Rider will be withdrawn with prejudice for the ESP V term."

The Governmental Aggregation Standby Rider would have charged municipal aggregations an insurance premium for the ability to return customers to the standard default service rates if the aggregation's supply contract was terminated. For aggregations not paying the premium, customers dropped to utility supply during an aggregation's term would have paid market prices, not the standard SSO rate, for a minimum period of two years

See more background on the now-withdrawn Governmental Aggregation Standby Rider here

The stipulation also adopts the use of a capacity proxy price for wholesale SSO auctions for those periods in which the future PJM Base Residual Auction capacity price has not yet been established. The stipulation notes that issues concerning use of a capacity proxy price -- and other changes to default service -- are under consideration in a generic PUCO proceeding, and to the extent PUCO orders changes to default service, implementing such changes by modifying the SSO as established in the instant stipulation would not trigger AEP Ohio's right to withdraw the ESP, so long as any SSO changes allow for timely and adequate cost recovery by AEP Ohio, along with a reasonable time to implement the modifications.

The capacity proxy price would generally function as envisioned by PUCO Staff in the generic SSO proceeding, and as used in other PJM states

The SSO auction manager, in consultation with PUCO Staff, would establish the proxy capacity price based on objective criteria in advance of the applicable auction. See background on use of a capacity proxy price here.

The actual capacity price will be substituted for the capacity proxy price and charged to SSO customers during the applicable PJM delivery year. Once the actual capacity price is known, AEP Ohio shall promptly calculate and post what the SSO auction clearing price would have been had the actual capacity price been known, and shall follow the same methodology as exists today for translating the SSO auction clearing price into the Generation Energy Rider and Generation Capacity Rider rate. AEP Ohio commits to provide interested stakeholders information on how the proxy price will work.

One notable provision is that, if the results of the BRAs for all products to be offered in a given SSO auction will become known soon after that scheduled SSO auction (or the results of the BRAs for all products to be offered in a given SSO auction will be known just before that scheduled SSO auction), the auction manager, in consultation with AEP Ohio, may make a timely decision to delay the scheduled SSO auction by up to 30 days.

Otherwise, with respect to the procurement of standard service offer supplies, AEP Ohio would generally continue its current auction approach as set forth in its original ESP application. See details from the original application here

Under the stipulation, the bypassable Retail Reconciliation Rider (a placeholder meant as a proxy for further unbundling certain SSO costs in delivery rates which is currently set at $0/kWh) would remain at $0 per kWh

The ESP provides for cost recovery of a new CIS at AEP Ohio, and includes provisions concerning the capabilities of such CIS. While the stipulation addresses the capabilities of the CIS, the stipulation itself would not order implementation of various specific policies (such as SCB); rather, the stipulation is only assuring that the CIS would be able to accommodate such policies in the future, if adopted

The stipulation provides that AEP Ohio will meet quarterly with RESA, Staff, and other interested stakeholders to discuss issues related to the CIS implementation and its timeframe

Among other things, the stipulation provides that AEP Ohio shall ensure that the new CIS will have the functionality to accommodate supplier consolidated billing (SCB), without any signatory party agreeing to continue providing supplier consolidated billing. AEP Ohio will not implement changes unless it receives Commission approval for a SCB tariff outlining the process.

Additionally, AEP Ohio shall ensure that the CIS is capable of allowing large commercial and industrial customers to switch on an accelerated basis (3-days), "subject to reasonable limits approved by the Commission regarding the number of times a customer can shop within a billing period."

Furthermore, AEP Ohio shall ensure that the CIS is capable of allowing residential and small commercial customers, "to switch to or from the SSO default service on an accelerated basis."

AEP Ohio shall also ensure that the CIS is capable, "of allowing customers that relocate within AEP Ohio’s service territory can [sic] keep their existing CRES [retail] provider when they move to a new location provided that AEP Ohio continues to perform billing for the customer, if and when AEP Ohio’s operational plan is approved in Case No. 19-2141-EL-EDI."

The stipulation also provides that AEP Ohio shall:

• Ensure that the new CIS can provide authorized CRES providers and third parties, i.e., with customers’ consent, with access to interval customer data (15-minute interval) for all customers with meters capable of recording interval data. Such data should be made available through both manual actions by an authorized CRES provider or third party and through EDI transactions. As part of its next base distribution rate case, AEP Ohio will evaluate the costs, if any, and propose a tariff charge for each method (manual and EDI) as applicable for CRES providers and third parties that request 15-minute data. The data and information used to evaluate the costs associated with this provision will be shared with Staff as part of the rate case review. As products and services that utilize the 15-minute interval data are developed by CRES marketers and third parties, the Signatory Parties offering such products and services will share updates with the gridSMART Collaborative, once they are publicly available.

• Ensure that the new system can account for negative loads of both shopping and non-shopping customers, that the negative load data would be properly accounted for and reportable to PJM (consistent with PJM settlement and billing procedures) such that individual customers could participate in net metering and other market programs and their supplier could obtain value for the customer’s behind the meter generation in the PJM markets.

• Ensure that the new CIS can calculate banked usage for net metering customers.

• Ensure that the new systems are flexible enough to allow for the introduction of new rate, product, and service offerings without the need for substantial additional investment in IT systems.

• Ensure that the new system maintains no less functionality than what is available under the current systems and no less functionality than what AEP Ohio agreed to in Paragraphs III. N and P in the Stipulation approved in Case No. 19-1475-EL-RDR.

• Ensure that AEP Ohio’s customers can continue to directly access their interval customer data (15-minute interval) at any time through their customer portal:

i. At least 24 months of energy usage data in 15-minute, 30-minute, or 60-minute intervals made available on a best efforts basis within 24 hours of performing industry-standard validation, estimation, and editing (VEE) processes and no later than thirty (30) days after the end of each meter cycle.

ii. At least 24 months of detailed billing history data, including breakdown of all billing line item charges.

iii. Flexible views (for non-residential customer with multiple accounts) with options to (a) select individual account, (b) group accounts by defined criteria, or (c) access full account list.

Additionally, the new CIS system will incorporate secure data sharing functionality.

"Upon receiving evidence of all necessary customer consent, AEP Ohio's CIS system will be capable of providing to CRES providers and third-party aggregators available customer data sufficient to allow them to enroll residential accounts to participate in the PJM ancillary services market, including but not limited to the customer’s peak load contribution," the settlement provides

AEP Ohio will evaluate the costs of providing such service, if any, and propose charges, as applicable, for this service in its next rate case.

Additionally, the stipulation states, "AEP may propose tariff charges to be billed to third parties that utilize the AEP Ohio bill to charge for non-jurisdictional items/services, The revenue for those tariff services shall be credited to help offset any charges for data transfer and bill format costs. Signatory Parties reserve their rights to contest the proposed tariff changes."

"AEP Ohio will ensure that it shows past due non-jurisdictional charges separately from AEP Ohio past due regulated charges on its bill through a bill format application within 60 days of executing the Stipulation," the stipulation states

The stipulation includes certain EV charging and whole house distribution rates.

Notably, AEP Ohio is to establish a workgroup that will meet semi-annually with interested parties to discuss, among other things, "additional TOU rate offerings, including potential SSO TOU options."

The stipulation provides for a residential smart thermostat demand response program administered by AEP Ohio but which is also open to retail (CRES) providers

Under the settlement, AEP Ohio will implement a smart thermostat demand response program with an annual cap of $5,000,000 for the term of the ESP, which will be administered as follows:

• Residential customers enrolled in the demand response program agree to permit AEP Ohio to call events on their thermostat to reduce (winter) /increase (summer) the temperature of their home by no more than 3 degrees for no more than 4 hours during times of peak usage determined by AEP Ohio ('Demand Response Event'). AEP Ohio has the ability to call Demand Response Events to implement a PJM directive, to protect its distribution system, to limit or avoid distribution outages, to reduce load on localized constrained distribution circuits, and to reduce the coincident peak demand of the distribution network. AEP Ohio will not bid in the associated demand response into the PJM market. Customers reserve the ability, on their own or through their agent on their behalf (e.g., CRES) to engage in energy efficiency and peak demand reduction activities and/or participate in PJM demand response programs. To the extent that a single smart thermostat cannot be utilized in more than one demand response program, the working group (referenced below) will address how to optimize CRES participation in this smart thermostat demand response program, including but not limited to using a portion of the annual $5,000,000 funding cap to implement a solution.

• AEP Ohio will not subject a customer to more than sixteen (16) Demand Response Events in a calendar year, excluding any CRES events being noticed through AEP Ohio’s system.

• Residential customers can take advantage of an initial $75 incentive toward the purchase of a new qualifying smart thermostat or an initial $50 incentive for residential customers with existing qualifying smart thermostats acquired outside of this demand response program (qualified smart thermostats means those that have the required capabilities to administer the program and have reasonably/competitively sourced access costs) through AEP Ohio or a CRES provider; whereby, the customer will be required to agree to be enrolled in the program for a term of 12 months. Enrolled customers would be automatically renewed for the next program year unless the customer expressly opts out of the program. Customers will only be permitted to redeem the initial incentive for one thermostat per account number.

-- In signing up participating CRES customers, CRES must: (1) provide an account number or SDI so that AEP Ohio can verify that customer’s identity as a customer with an active AEP Ohio account that is not previously associated with a $75 smart thermostat rebate under this program, and (2) provides make, model and serial number of the installed smart thermostat.

-- As part of the initial enrollment process, AEP Ohio and CRES will acquire affirmative consent for enrollment.

-- If the customer consents, the $75/$50 rebate can be transmitted directly to the CRES provider.

• Residential customers would receive an annual $25 incentive following each program year (September 1 through August 31) as long as the customer participates (does not override) in at least 75% of the Demand Response Events.

• Residential customers will be permitted the ability to override the Demand Response Event

A collaborative will discuss and implement, "any reasonable and cost-effective changes necessary to preserve CRES providers communication channels with their CRES customers relative to programming initiated pursuant to market-based activities, and will further explore a reasonable and cost-effective solution for any potential limitations to CRES provider offered programs that could be impacted or limited due to physical or technology capabilities with smart thermostats and the vendors running the smart thermostat demand response operations."

The collaborative will also address and form a recommendation as to whether the demand response program should incorporate other in-home demand-response-capable devices that would use a portion of the existing $5,000,000 annual funding cap.

The stipulation would continue and expand AEP Ohio's current Basic Transmission Cost rider pilot (BTCR Pilot), which allows customers to elect to be charged based on 1CP for the transmission costs, versus using monthly billed demand. Each year of the ESP, an additional 100 MW of space will be made available under the BTCR 1CP Pilot. Twenty percent of the increased participation cap per year (20 MW) will be set aside for customers with a monthly billing demand of 10 MW or less

Additionally, any AEP Ohio customer wishing to enroll in the BTCR 1CP Program that was not able to subscribe through the standard process can enter the program through a reasonable arrangement application. Reasonable arrangement customers on 1CP transmission billing do not count against the MW cap.

Case No. 23-23-EL-SSO; 23-0023-EL-SSO

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