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Utilities Propose Smart Thermostat Rebate Program Open To Retail Suppliers
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With respect to retail market issues, the FirstEnergy Ohio utilities' newly filed electric security plan (ESP VI) maintains various provisions previously adopted or ordered by the PUC of Ohio in May 2024 under ESP V, prior to the FirstEnergy Ohio EDCs withdrawing ESP V
ESP VI would run through May 31, 2028
Most notably, the FirstEnergy Ohio EDCs propose a smart thermostat rebate program as directed under ESP V
This ESP VI smart thermostat rebate program would be separate from and in addition to a smart thermostat rebate program ordered and being implemented under the FirstEnergy Ohio utilities' grid modernization program (Phase 2)
The ESP smart thermostat rebate program will provide residential customers with a $50 rebate for the purchase of an Energy Star certified smart thermostat
While the utilities will be among the means through which customers may receive the rebate, customers will also be able to receive the rebate through alternative channels or through a dedicated website
Notably, competitive retail electric suppliers will be able to participate in the smart thermostat rebate program
The EDCs expect total customer participation in the ESP smart thermostat rebate program to be about 45,500
The total cost of incentives under the ESP smart thermostat rebate program is projected at $3.4 million for the proposed 29-month term of ESP VI (Jan. 1, 2026 through May 31, 2028; the specific start date is contingent on the specific date of PUCO approval for ESP VI)
The EDCs will convene a working group, with participants including retail suppliers, to implement the smart thermostat rebate program
The FirstEnergy Ohio EDCs stated that the smart thermostat rebate program is consistent with the program which was ordered under ESP V. Although not specifically addressed in the FirstEnergy Ohio utilities' testimony in support of ESP VI, PUCO in ESP V had highlighted communications between retail suppliers and customers as an issue for the smart thermostat working group to consider
Specifically, in its prior ESP V order, PUCO had said, "The working group should also discuss and implement any reasonable and cost-effective measures necessary to preserve CRES [retail] 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[.]"
Default Service
With respect to default service, the FirstEnergy Ohio utilities do not propose any change to the current procurement and pricing process (which reflects the design adopted under ESP V), aside from a change in one procurement date, and conforming changes in the term length for products procured in later auctions, to reflect the new length of ESP VI
The FirstEnergy Ohio utilities propose to continue to rely exclusively on 12- and 24-month contracts for SSO supplies, consistent with ESP V (with the use of 36-month contracts having ended as part of ESP V)
The FirstEnergy Ohio utilities will continue to use descending clock auctions for a full requirements product (excluding RECs), on a slice of system basis, with no individualized tranches or products for specific customer classes (not counting the separate PIPP load process). During consideration of ESP V, several parties had sought to introduce customer class-specific procurements under ESP V, but PUCO had rejected such an approach
The FirstEnergy Ohio EDCs will continue to use a capacity proxy price for SSO auctions which occur at a time at which no PJM base residual auction capacity price has been established, consistent with current practice and PUCO directive
With regard to the proposed change in the SSO auction dates, the FirstEnergy Ohio EDCs seek to move the summer 2026 auction (currently set for around June) to September 2026
The EDCs said that moving this procurement closer to the delivery date will reduce risk premiums
The FirstEnergy Ohio utilities do not seek any other changes in the procurement dates. The EDCs do propose changes in product term length in certain later auctions to account for the May 31, 2028 end date of ESP VI, but such changes are within the bounds of the existing product mix (solely relying on 12- and 24-month products)
The specific procurement dates, product term lengths, and resulting portfolio proposed by the FirstEnergy Ohio utilities can be seen here
The EDCs do not propose any change in how default service costs are translated into retail rates, or any change in the components of the bypassable SSO rate
Rider NMB
The FirstEnergy Ohio utilities propose to continue the Non-Market Based Services Rider (Rider NMB), along with the Rider NMB pilot program, and also propose to re-institute the expansion of the amount of load eligible to bypass Rider NMB under the pilot program
Rider NMB recovers, on a nonbypassable basis, certain non-market-based PJM costs, with the EDCs assuming responsibility for these costs for all customers
The Rider NMB pilot allows a capped amount of customer load to bypass Rider NMB, with the customer's LSE assigned the obligation to pay the PJM costs normally recovered under Rider NMB for such customer
The EDCs propose that ESP V's expansion of the Rider NMB pilot by 100 MW will be re-introduced (with the 100 MW expansion cap under ESP VI including those customers who already entered into the pilot prior to ESP V being withdrawn). The FirstEnergy Ohio utilities said that the 100 MW expansion is not currently fully subscribed.
An individual customer newly participating in the Rider NMB pilot would be capped at 20 MW
Regardless of the Rider NMB pilot cap, customers would still be able to seek to participate in the pilot through application and approval of a reasonable arrangement by PUCO
Case 25-0092-EL-SSO
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February
3, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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