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States Approve RTP Tariffs

Fortnightly Magazine - June 15 1996

Regulators in Minnesota and Pennsylvania have approved electric service tariffs with real-time pricing (RTP). In Minnesota, the PUC directed Otter Tail Power Co. to offer large-volume customers: 1) a customer-specific baseline load priced at a standard rate, with deviations priced hourly at the spot market, reflecting a profit margin plus marginal operating and outage costs; and 2) a simplified offer that eliminates the baseline calculation, increases fixed charges, and bills all energy use at the real-time incremental rate. (The incremental "outage charge" contained in both offerings reflects high costs during hours when the reliability of the system could be eroded by increased or decreased consumption.) Re Otter Tail Pwr. Co., Docket No. E-017/M-95-1044, March 18, 1996 (Minn.P.U.C.).

In Pennsylvania, Metropolitan Edison Co. and Pennsylvania Electric Co., will now join Pennsylvania Power & Light Co. in offering RTP tariffs. The tariffs, available to large commercial and industrial customers, should enable the utilities to avoid losing customers to competitors. The state PUC asked for annual reports on the new tariffs to help analyze effects on revenues and expenses. Pa. PUC v. Metropolitan Edison Co., R-00963546, March 14, 1996 (Pa.P.U.C.); Pa. PUC v. Penn. Elec. Co., R-009635437, March 14, 1996 (Pa.P.U.C.). t

Phillip S. Cross is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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