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Pennsylvania Utility Agrees To Use Five-Year ATC Block For Part Of Default Service Under Settlement
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A non-unanimous settlement governing the provision of default service at UGI Utilities, Inc. - Electric Division in Pennsylvania included a longer-term around-the-clock (ATC) block product than that originally proposed by UGI
The non-unanimous settlement includes as signatories UGI, the Office of
Consumer Advocate, and the Office of Small Business Advocate. Penn Renewables did not sign the settlement and is contesting in the default service proceeding a proposal to change how net metered customers are assigned to a default service class (with UGI proposing to start making the determination based a customer's supply peak load impact as noted below), which would result in a change in the price paid to impacted net metered customers for excess generation
The non-unanimous settlement would establish a default service plan for UGI for the period June 1, 2025 through May 31, 2029 (DSP V)
The non-unanimous settlement generally would adopt UGI's proposed default service product mix, except for a change in the term length for one of UGI's energy-only ATC blocks for GSR-1 customers (those under 100 kW)
UGI had initially proposed, for GSR-1 customers, a portfolio relying, in part, on 20 MW of ATC block supply, with each block consisting of 10 MW, with staggered 24-month terms
While the non-unanimous settlement still sets the ATC block amount for GSR-1 customers at 20 MW, one of the 10 MW blocks under the settlement will be for a five-year term, with the second 10 MW block having a 2-year term, with this 2-year block procured on a rolling basis during the term of the default service plan
In contrast, UGI's current SOS portfolio includes both ATC and non-ATC blocks, with the non-ATC blocks being monthly products procured in 6-month terms
Other than the change to the term length of one of the ATC blocks, UGI's originally proposed default service portfolio would be approved by the non-unanimous settlement. Aside from the ATC blocks, the GSR-1 customer portfolio would include staggered 12-month full requirements load-following contracts and a small a long-term supply arrangement between UGI and the Allegheny Electric Cooperative, Inc. (about 250kW)
The 12-month full requirements load-following contracts for GSR-1 would serve any SOS load not covered by the blocks or Allegheny Electric Cooperative contract. UGI said that, compared to its current default service portfolio (which has about 45 MW in blocks), the product mix under the non-unanimous settlement relies more on
fixed price full requirements contracts (once the DSP V portfolio reaches a steady state, about 75% of small customer SOS will be served by full requirements contracts)
For GSR-1, at steady state, each full requirements load-following contract would be for 50% of the SOS needs above the block and Allegheny purchases, with the 12-month fixed price full requirements contracts being established to have overlapping 6-month intervals
The GSR-1 procurements will continue to seek supplies for applicable residential and small commercial customers on a combined basis
Under the non-unanimous settlement, UGI would establish unique residential and non-residential SOS rates under GSR-1 by applying an allocation factor to the Energy Cost supply rate component resulting from the GSR-1 procurements (as noted, the procurements are not customer class-specific).
The residential Energy Cost rate would be established by multiplying, by 1.01, the Energy Cost (EC) component resulting from the procurements. The non-residential Energy Cost rate would be established by applying a factor of 0.97 to the EC component resulting from the procurements
Currently, all GSR-1 customers pay the same default service rate
The non-unanimous settlement includes an extended time over which GSR-1 default service reconciliations will be recovered.
GSR-1 reconciliations will occur every six months, but the resulting reconciliation amounts will be amortized over 12 months (rather than recovered within 6 months)
GSR-2 default service customers (at and over 100 kW) would continue to be served under hourly pricing
While UGI did not propose a change in cutoff between fixed price default service (GSR-1) and hourly prices (GSR-2), the non-unanimous settlement would adopt UGI's proposal to change how the 100 kW for the two classes is measured for net metering customers
Specifically, UGI would place a net metering customer into either class based on supply peak load impact
If a net metering customer’s supply peak load impact is assessed to be less than 100 kW, that customer would be included in the GSR-1 group. If a net metering customer’s supply peak load impact is greater than or equal to 100 kW, that customer would be assigned to GSR-2.
The non-unanimous settlement includes a potential 50% load cap applicable to the full requirements procurements, but the prospective application of the cap will only be triggered after UGI receives, in a procurement, at least 3 independent bids, and the cap would only apply prospectively to future procurements (and not the procurement with the 3 independent bids that triggered the load cap)
P-2024-3049343
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October 22, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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