THE FEDERAL ENERGY REGULATORY COMMISSION met Aug. 14 in Chicago to address complaints filed concerning late-June electric price spikes in the Midwest, which saw prices climb a high as $7,000 per...
Retail Aggregation: A Guaranteed Right for Small Customers?
With a CTC likely to cover stranded costs,
aggregators must somehow find power cheap
enough to offer real savings.
Retail aggregation: Wherever you stand, it appears 1998 could be the year of reckoning.
By then (em say those watching the future of aggregation in the "leader" states of California, New York, Massachusetts, and New Hampshire (em rulemakings will have sorted out the issues of stranded costs, distribution, and reliability. Widespread blocs of schools, businesses, and residents will start wielding buying power. Or will they?
Trials . . .
New Hampshire is set to begin its pilot program for retail electric competition on May 28.1 However, that start date assumes that the state's franchised electric utilities first will have met requirements set by the state Public Utilities Commission (PUC) to file unbundled tariffs for transmission,
distribution, and charges to recover administrative and stranded costs. (At press time, PUC hearings on the compliance tariffs were set for April 1-5.)
Some 3 percent of New Hampshire's electric load is up for grabs. Residential and small commercial customers may participate in the pilot either individually or as part of an aggregated "Geographic Area of Choice" (GAC). Any GACs participating in the pilot will be selected randomly by their franchised utilities under the oversight of the PUC, along with the names of firms that would procure power on their behalf. After customers are selected, the aggregation of customer loads will be permitted to lower entry barriers for small customers.
In Massachusetts, the future of retail aggregation was to be mapped out in restructuring proceedings that ended February 16. New York, meanwhile, shows a preference for wholesale wheeling "with a commitment to adding retail access as quickly as possible" in its ongoing restructuring effort in its electric Competitive Opportunities docket.2 One onlooker who stands to benefit from aggregation predicts it will be piloted in select areas of the state, then go full-blown in three years or less.
California's December restructuring decision,3 still under a 100-day review at press time, calls for direct access, or direct access via aggregation, for about 4 percent of the state's consumers, beginning January 1, 1998. That percentage would grow over five years. Although the California Public Utilities Commission has yet to set clear rules, consumer groups say customer aggregation is key to delivering the benefits of competition to smaller users. Utilities are supposed to confer with interested parties on direct access until August 30, then submit a plan containing the parties' comments. A month-long review period follows.
Tribulations . . .
Utility officials and aggregation proponents in these states offer divergent attitudes to pooled power loads. To some, they're clearly economic aggravation; to others, fiscal salvation.
Patty Spangler, power pool manager at the Association of Bay Area Governments (ABAG) of Oakland, CA, knows the difficulties of aggregation. On April 1, after a year of effort, her regional planning organization begins a natural gas aggregation of more than 100 municipalities, water and park
districts, and sewer agencies in the nine-county San Francisco Bay area. The pool projects savings of 2.3 percent on gas bills.