PUC Orders Utility To File Proposal For Use Of ISO Market Prices For 10-20% Of Mass Market Default Service -- EnergyChoiceMatters.com

PUC Orders Utility To File Proposal For Use Of ISO Market Prices For 10-20% Of Mass Market Default Service

Mass Market SOS Rates Falling 20%

December 8, 2023

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

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The New Hampshire PUC had ordered Unitil (UES) to develop a proposal to use an ISO New England market-based procurement for a tranche of 10 to 20 percent of Unitil's small customer group default electricity service, for the period August 2024 to January 2025

As previously reported, the PUC has directed the utilities to explore ISO-based market pricing for mass market default service, citing risk premiums under full requirements service

In its default service plan for the period February 1, 2024, through July 31, 2024, which is the subject of the PUC's order (with new rates discussed further below), Unitil did not propose any use of ISO market pricing for the small customer group, citing an ongoing review of default service issues being conducted by the state's Department of Energy

However, the PUC cited data filed by Unitil which shows continued premiums under full requirements contracts, with the PUC directing Unitil to specifically file a proposal to use ISO prices for 10-20% of small customer default service. The proposal will remain subject to PUC review, and the PUC did not adopt the use of ISO pricing for any part of small customer default service at this time

The PUC said, "In light of the empirical data developed through IR 22-053, and the monthly data being submitted by the Company in this docket, the Commission believes that the time is right to develop an ISO-New England market-based component for energy service procurement for UES’s small and medium customer groups. To that end, we order UES to develop a proposal, for submission to the Commission no later than January 22, 2024, for an ISO-New England market-based procurement tranche of 10 to 20 percent, through whatever combination of direct Day-Ahead and Real-Time ISO-New England market acquisitions the Company finds advisable, for the Company’s upcoming August 2024-January 2025 energy service period for the Company’s small and medium customer groups. This proposal would be assessed by the Commission in a future phase of this proceeding upon submission by the Company."

The PUC said, "UES has ... submitted, as part of the ordering requirements of Order No. 26,850, data for the months of August and September 2023 showing that the Company’s requirements-contract prices for energy service were higher than the ISO-New England market prices for each month by a factor of approximately 1.5 to 2."

In terms of pricing, the PUC approved, for the Small Customer Group (Residential, Rate D) a fixed default service rate of 10.718 cents per kilowatt-hour (kWh) for the period February 1, 2024, through July 31, 2024. That's 20% lower than the current rate of 13.257 cents per kWh

For G2 and OL (medium commercial) customers), the fixed default service rate will be 10.038 cents per kilowatt-hour (kWh) for the period February 1, 2024, through July 31, 2024. That's 21% lower than the current rate of 12.794 cents per kWh

All rates above include the RPS adder.

Rates under the monthly rate option for these classes can be found in Unitil's tariff filing here

Docket DE 23-054

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