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PUC Approves Increasing Amount Of Mass Market Default Service Supplies Sourced From ISO Spot Market To 50%
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At Unitil, the New Hampshire PUC approved increasing the amount of default service electricity supplies self-served from the ISO New England real-time market to 50% for Non-G1 (mass market) customers, for the period August 1, 2025 to January 31, 2026
The remaining 50% of Unitil Non-G1 default service will be sourced from non-overlapping 6-month fixed price full requirements contracts
Currently, Unitil, on a self-serve basis, sources
30% of its Non-G1 default service supplies from the ISO-NE real-time market
In determining a fixed default service customer rate for the six-month period August 2025 to January 2026, proxy prices for the self-served, spot-market-sourced supplies will be developed in the same manner as used for the current spot-sourced supplies
The PUC also approved relying on the ISO market for 100% of G1 (large customer) default service at Unitil
The PUC said, "Given the ongoing broad differential between the ISO-New England
prevailing monthly market prices, including all components, and the requirements-contract\RFP prices being paid by Unitil, we expect that the proposed expansion of the ISO-New England market-based procurement component will offer savings for Unitil
default service customers, and offer a valuable process for a market-based
procurement approach."
The PUC rejected arguments from retail suppliers that reliance on spot market purchases violates the restructuring statute by, among other things, not reflecting appropriate price signals, and by resulting in cost-shifting (as a fixed retail rate will be set in advance of consumption based on proxy prices, with later reconciliations)
The PUC, in its order approving an expansion of the use of ISO-NE spot market supplies, did not address proposals to change how default service reconciliations are handled, which will be subject to a later, separate order. Unitil has proposed to make default service reconciliations nonbypassable
The PUC said, "We ... do not agree with RESA’s, and the NRG Retail
Companies’[,] comments to the effect that the [self-served] market-based procurement approach is a
violation of the Restructuring Act, RSA 374-F; ... this approach is just, reasonable, in the
public interest, and within our authority, pursuant to the Restructuring Act and all
allied statutes, to approve."
The PUC said, "Importantly, we expect that this proposal will support more
competitive energy market outcomes in line with the Restructuring Policy Principles
incorporated by statute."
The PUC also rejected use of 100% full requirements contracts
"Third party 100 percent RFP procurements come with substantial risk premiums, exacerbated by
market volatility, that is costly when compared to the six-monthly average based
default service offering using self-supply, which of course includes exposure to
wholesale market spikes," the PUC said
Granite State Electric
Separately, the PUC also approved the continued use of ISO-NE day-ahead market purchases for 50% of small customer group default service at Granite State Electric (Liberty Utilities), with the remaining 50% sourced from full requirements contracts, for the period August 1, 2025 to January 31, 2026
Proxy prices will generally be developed in the same manner as previously used, though the source for futures prices will change.
The proxy
energy price used to develop a 6-month fixed default service rate, developed in advance of the 50% self-serve market purchases, will be an average of: (a) the four-year
rolling weighted average of ISO-New England market prices in the New Hampshire
load zone, and (b) forward pricing for the ISO-New England market. Due to the lack of
availability of the NYMEX Futures prices in a published format available to GSE, GSE
will substitute the S&P Global power forward prices for the ISO-New England
market
The PUC also approved a new process for procuring GSE default service supplies to the extent the RFP for full requirements supplies does not receive any bids or the PUC rejects the winning bidders or prices
In the event of such a failed or rejected RFP, GSE will serve 100% of small customer default service under ISO-NE day-ahead market purchases
For Large Customer Group default service, GSE will source 100% of supplies from the day-ahead ISO-NE market
GSE: Docket DE 24-061
Unitil: Docket DE 24-065
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April 11, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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