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Settlement Addresses Separate Default Service For Large Customers (Data Centers & Others)
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Correction 10/11/24 1:45pm ET:
AEP Ohio is not a signatory to the settlement as originally reported
AEP Ohio issued the following statement:
AEP Ohio president and chief operating officer Marc Reitter stated:
"What has been proposed by the partial settlement fails to adequately address the main issues expressed in AEP Ohio’s application. It’s unprecedented to present a 'settlement' to the PUCO that isn’t supported by the PUCO staff or the utility that initially raised the concern. The PUCO should reject it. AEP Ohio remains committed to finding a solution that balances the infrastructure investment needed to meet extreme power demands of data centers with protections for Ohio consumers."
Original story:
A settlement among several major parties in a PUC of Ohio proceeding reviewing a proposed tariff from AEP Ohio governing service to data centers (and now also including other large loads) addresses the return of such large customers to utility supply, but is unclear regarding such customers' eligibility to take the regular default service in other circumstances (i.e., at service initiation)
As previously reported, AEP Ohio has proposed a new tariff applicable to certain data centers that would have, among other things, made such loads ineligible to take -- at any time -- the regular Standard Service Offer (SSO) rate, with AEP Ohio proposing an alternative default service to serve these data center customers
See full details on the original proposal here
The settlement, signed by
The new tariff, now called Schedule EIC (Electricity-Intensive Customer), will apply to any new electric service agreement (ESA) -- not just data centers -- for new load greater than 50 MW at a Single Location if AEP Ohio provides proof of a Transmission Capacity
Constraint. Schedule EIC would not apply to entities that have already signed an LOA or ESA prior to the effective date of the new tariff
With regards to default service, the settlement adds a provision which "modifie[s]" AEP Ohio's original SSO proposal, but the provision's applicability is unclear. The settlement's language only explicitly addresses an EIC customer's "return" to utility supply, but is silent with regards to such customer's eligibility for regular default service at the time that their electric service commences.
AEP Ohio's original data center SSO proposal would have instituted a separate default service for all customers covered under the data center tariff, not only customers returning to utility supply, and would have excluded from the regular SSO auctions the new data center load.
The settlement specifically states that the settlement's SSO provision "modifie[s]" -- not "replaces" -- AEP Ohio's original SSO data center proposal. Nothing in the settlement's SSO provision explicitly appears to modify, or necessarily contradict, AEP Ohio's original proposal which would have made data centers ineligible for the regular SSO at service initiation, placing them on an alternative form of utility supply to the extent the customer was not taking service from a retail supplier
While it is expected by AEP Ohio that all EIC customers will take competitive retail supply, it remains unclear under the settlement's language whether new EIC customers will be eligible for the regular SSO at start-up, or, if not, what form of default service will govern such customers
With respect to those customers under Schedule EIC -- and certain other customers -- returning to utility supply, the settlement is clear
EIC customers -- and all other customers having an existing ESA with
Contract Capacity over 25 MW that are part of the 5,000 MW expansion currently
under ESA -- will not be eligible "to return to" the existing regular SSO product.
These customers will be served under a separate form of utility supply with pricing based on real-time energy and a pass-through of capacity
plus an adder for ancillary costs and the wholesale supplier’s cost.
The supplies for any such returning customers would be provided by wholesale suppliers, not AEP Ohio itself, with the supplies and suppliers procured by a, "separate yet
to be determined competitive and transparent process where competitive suppliers."
Qualification standards for such wholesale suppliers would be set by PUCO
The settlement does not cite any minimum stay provisions which would apply to EIC customers returning to the separate EIC-specific SSO, but also does not explicitly "modify" AEP Ohio's prior SSO proposal which included a minimum stay. AEP Ohio's original separate SSO proposal would have imposed a 6-month minimum stay to the extent the customer was placed on AEP Ohio's auction-based data center SSO.
For context, the entirety of the settlement's SSO provision is below:
"AEP Ohio’s SSO proposal will be modified by the following provision: Customers
served under Schedule EIC and all other customers having an existing ESA with
Contract Capacity over 25 MW that are part of the 5,000 MW expansion currently
under ESA will not be eligible to return to the existing default SSO auction product.
Instead, the customers that fall under these tariff requirements and those that have an
existing ESA with Contract Capacity over 25 MW will be served by a separate yet
to be determined competitive and transparent process where competitive suppliers,
subject to qualifying criteria approved by the Commission, will provide electric
power and energy that is based on real time energy and a pass through of capacity
plus an adder for ancillary costs and the supplier’s cost."
Addressing behind-the-meter generation for EIC customers, which was another issue of concern to retail suppliers, EIC customers will expressly be allowed to interconnect behind-the-meter generation and/or co-located load on the same
terms as any other customer, under the applicable interconnection rules (PUCO, PJM OATT and PJM
Manuals)
The settlement would withdraw (without prejudice) AEP Ohio's proposal for a Mobile Data Center/Flexible Load Tariff (Schedule MDC/FLT) that would have been applicable to Mobile Data Centers with monthly demand that is greater than 1 MW
The settlement sets forth other terms related to taking service under EIC, including the tariff's applicability, the sign-up process, financial commitments, minimum demand, and exit fees
Notably, the stipulation would allow an EIC customer to assign up to 50% of its unused capacity, for which it has been assigned responsibility (cost), to another EIC customer
Settling parties urge PUCO to open a generic investigation into issues raised by large loads, including, "market-driven
opportunities such as battery storage, surplus interconnection of distribution-level
generation and storage, and virtual power plants[.]"
Case 24-508-EL-ATA
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October 10, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
AEP Ohio, the Data Center Coalition, Amazon, Google, Microsoft, the Retail Energy Supply Association, Constellation, IGS Energy, Ohio Energy Leadership Council, and others, would modify the customers governed by the new tariff, and the provisions related to default service
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