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PUC's Consultant Recommends Changes To Rider BTCR
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Editor's note. This story has been corrected to reflect the current nature of Rider BTCR at AEP Ohio, that the current Rider BTCR at AEP Ohio is nonbypassable for all customers (including being nonbypassable for pilot customers), and that the consultant's report does NOT recommend changes in the bypassability of Rider BTCR at AEP Ohio
Customers in the current AEP Ohio Rider BTCR pilot are assigned the same PJM transmission cost responsibility as non-Pilot customers under Rider BTCR. However, while Rider BTCR rates for non-pilot customers are set using annual consumption and/or non-coincident billing demand, Pilot participants instead pay a rate calculated using AEP Ohio’s total revenue requirement (demand-based components only) and NSPL. Additionally, Pilot participants are billed based on their individual peak demand (1CP) from the prior year.
A consultant retained by the PUC of Ohio has recommended making changes to the Basic Transmission Cost Rider (Rider BTCR), and its pilot program, at AEP Ohio
The consultant's report found that the pilot program produced aggregate savings on transmission costs, shared by both pilot and non-pilot customers
The consultant's report also found that cost shifting occurred from pilot customers to non-pilot customers, with costs shifted especially to non-pilot General Service Transmission customers
While the consultant found that the quantified benefits of the pilot are greater than the costs, the consultant said that it is "unclear" whether the pilot provides greater benefit versus a policy of eliminating Rider BTCR and more directly exposing some or all customers to PJM transmission and ancillary service costs
"It does not appear that Rider BTCR provides price signals consistent with cost causation," the consultant said
Among other recommendations, the consultant recommends that the rate design currently applied to pilot customers should be expanded and applied to all General Service customers with a demand meter.
The consultant recommends that such modification be implemented in a phased manner to provide affected customers time to implement demand reduction strategies and/or to adjust operations
The consultant recommends that the current Rider BTCR design should be retained for Residential, Lighting, and Non-Demand General Service customers
The consultant also recommended that the PUC adopt a stay-out period for pilot participants to prevent gaming by customers toggling into and out of the pilot program when economically advantageous. The consultant did not recommend a specific minimum stay-out, but cited such rules adopted as part of ESP V, which does not permit a pilot customer, who exits the pilot, from returning to the pilot during the term of the ESP.
Case 24-0493-EL-RDR
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February 24, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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