A no-holds-barred interview with the electric industry’s chief architect of wholesale electric market design.
Electric Shopping Credits. The New York Public Service Commission OK'd a proposal by Consolidated Edison Co. to adopt a floating-rate shopping credit for generation supply that would reflect prices published by the New York Independent System Operator. Any difference between actual costs and market-based costs would be shared in a 90-10 ratio between ratepayers and utility stockholders.
The PSC also approved a one-time flat payment of $65 to encourage residential and small commercial customers to switch to a competitive supplier (industrial customers would receive an extra 0.2 cents per kilowatt-hour), despite objections from ConEd that any credit in excess of market price would violate the terms of the utility's 1997 restructuring orders.
The PSC said it would revisit the issue within a year, as it expected market structures to change soon, with the addition this summer of a capacity market at the NY ISO, and other advances regarding competitive metering and a move toward a single-bill format. .
Electric Transition Costs . The Arkansas PSC set guidelines to govern the recovery of transition (stranded) costs by electric utilities that would deny recovery of any costs already reflected in current rate levels, such as for employees now focusing on devising plans to implement retail choice.
However, in a rehearing order, the PSC retreated from an earlier proposed rule that would have forced utilities to seek prior approval of any investment in any long-lived asset subject to stranding but carrying a useful life beyond the end of the stranded-cost recovery period. .
Net Metering . At press time, Virginia had set a hearing for March 29 to consider arguments regarding proposed final regulations governing net energy metering. The rules would apply to customers owning and operating electric generation on the premises using solar, wind, or hydro energy as the sole fuel source, but only for unit sizes of not more than 10 kilowatts (residential customers) or 25 kW (non-residential) that are interconnected and operated in parallel with the distribution grid and intended primarily to offset the customer's own power requirements.
Also, all qualifying on-site generation located within the service territory of the native distribution utility could not be allowed to exceed 0.1 percent of peak-load forecast for the area for the previous year. .
Metering and Billing. The Arkansas PSC opened a generic proceeding to determine whether metering, billing, payment, collection, aggregation, and related services should be offered in a competitive framework. It asked for comments to address market expectations for product differentiation, plus lists of potential product vendors describing their readiness to serve and their willingness to deal with different classes of customers with different economic characteristics. .
DSM Incentives. Massachusetts expanded incentives for utility stockholders in approving final guidelines for demand-side management and energy efficiency programs designed to avoid costs incurred by utilities for electric generation, gas supply, transmission, distribution, and environmental compliance.
Rather than limit performance incentives to reflect only the direct costs of program implementation, the commission broadened the plan to cover costs associated with plan administration, marketing, market research, and program monitoring and evaluation.
As the commission