News Digest

Fortnightly Magazine - January 1 2001


News Digest

EES North America


State PUCs

Retail Marketing Credits. As the Federal Energy Regulatory Commission pondered remedies for volatility in California's wholesale power markets, the state PUC was considering how much the state's three major investor-owned electric distribution utilities (UDCs) must spend on power supply procurement and retail marketing for the benefit of their standard-offer default customers, and thus how much to add to the "PX Credit" that is subtracted from bundled rates to determine the wires-only charge that UDCs assess to customers that choose a competitive retailer for generation supply.

As of late November, three proposed decisions were pending before the full commission, one issued by Administrative Law Judge Robert Barnett (with lower credits more favorable to UDCs), two more issued by Commissioners Josiah Neeper and Richard A. Bilas (with credits as much as five times higher, and thus more favorable to competitive retailers). Each decision would assess credits higher than proposed by the three UDCs-Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E)-but lower than suggested by the Office of Ratepayer Advocates (ORA) or the Alliance for Retail Markets (ARM)....

The UDCs proposed low credits, claiming that their obligation to serve as supplier of last resort made it impossible for them to avoid a significant amount of marketing or power procurement costs. But Commissioner Neeper warned against that view: "It is not correct to assume that the utilities' default provider status will always be required, and thus that certain procurement costs are in the long run unavoidable." .

Distributed Generation. In updating its current rules, New York barred electric utilities from requiring any sort of insurance coverage as a condition for interconnection by electric customers of distributed generation facilities of 300 kilovolt-amperes or less.

Instead, the commission will leave it up to private markets to craft insurance arrangements for small-scale generators that install DG plants.

The commission also will allow customers to lease their on-site DG units to third parties, and will not limit the standard interconnection contract to a specific term (e.g., five years), despite hard lessons learned from cogeneration contracts that locked in rates at out-of-market levels.

"Standardized [DG] contracts do not include payments for energy," said the commission. "It is not unreasonable for us to require utilities to enter into interconnection agreements that last for the lifetime of the DG unit." .

On-Site Solar. By contrast to New York (see above), Florida will require proof of liability insurance no less than $100,000 before allowing electric customers to interconnect photovoltaic generating systems smaller than 10 kilowatts under a pilot program with Tampa Electric.

The utility will pay customers 9 cents per kilowatt-hour for their solar generation, or 1 cent less than the premium price for the solar-generated power under a "green" energy program OK'd for Tampa Electric back in September. .

Electronic Data Interchange. New York invited comments on proposals offered on Oct. 10 by the state's EDI Collaborative for using Electronic Data Interchange in business processes for enrolling and removing retail direct access customers. .

Performance-Based Rates. Rejecting arguments from