N-1Report
7 passages
3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MAGINAL COSTS SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for clas...
AI summary The text discusses the SRMC test, comparing average unit revenues to actual marginal costs, influenced by timing differences and rate smoothing. Multi-year rate plans decouple test year revenues from cost fluctuations, while capping non-fuel rates in 2023-2024 GRA led to rates set below prospective costs.
DATE FILED: May 29, 2026 Page 19 of 26 1 3.4 Riders 2 3 Starting in 2010, the fuel cost portion of the embedded cost rates has been subject to fuel cost 4 adjustments (FAM AA and FAM BA).12 5 6 Beginning in 2010, the DSM Cost Recovery Ride...
AI summary The document discusses the history and application of various rate riders, including the Fuel Adjustment Mechanism (FAM), the Demand Side Management Cost Recovery Rider (DCRR), and the Storm Cost Recovery Rider (SCRR). It also references an interim cost assessment for the Maritime Link and the SRMC test results for 2025 and 2026.
11 4.2 SRMC Test for the Above-the-Line Classes 12 13 The actual 2025 revenues of the ATL rate classes reflect the base cost rates approved for use in 14 2024 and the 2025 DCRR and 2025 Storm Cost Recovery Riders (SCRR). Consistent with th...
AI summary The 2025 revenues for Above-the-Line (ATL) rate classes incorporate 2024 base rates and 2025 DCRR/SCRR adjustments. Modifications to unit revenues for Domestic, Small General, LIIR, and Unmetered classes aim to align with SRMC standards. All ATL classes passed the SRMC test in 2025.
Q. Please explain the basis for the SRMC test? A. As I noted earlier, the marginal energy cost is simply the cost of supplying the "last kWh consumed," in a particular hour using available resources (i.e., existing generating equipment or...
AI summary The SRMC test ensures rates generate revenue to cover the marginal cost of the 'last kWh consumed' in a given hour. If rates fail to meet this, they are set below short-run marginal cost, potentially undermining system reliability and cost recovery.
cceptable justification for the failure, such as those described above, the rate should be raised to a level at which it passes the test. Figure 1.1 2025 Base Cost Rate Revenues with DSM and SCRR
AI summary The text discusses adjusting rates based on acceptable justifications for failure, emphasizing the need to raise rates to meet the SRMC test. It references a figure analyzing 2025 base cost rate revenues incorporating DSM and SCRR.
al Average 6.11% 9.11% 16.76 9.60 Small General 5.47% 8.47% 17.52 9.54 83.5% 398.8 -0.15 -0.15 - - Small General (Time of Use) On-Peak (Winter) 5.47% 8.47% 34.62 14.42 140.0% 0.1 -0.15 -0.15 - - Off-Peak (Winter) 5.47% 8.47% 18.96 11.25 68...
AI summary The text presents a detailed breakdown of 2025 base cost rate revenues, including various rate structures such as Time-of-Use, Critical Peak Pricing, and Storm Cost Recovery Rider, along with percentages and figures related to different customer categories and usage periods.
Changes in Supply Elasticities Due to Restructuring Given that FERC open transmission access policies and the creation of an ISO will reduce transmission access constraints, supply elasticities should be higher in the long run. The incenti...
AI summary Restructuring, including FERC open transmission policies and ISO creation, will increase supply elasticities by making generation more market-driven. However, during the transition, the Competitive Transition Charge (CTC) may reduce elasticities for utilities' plants. Must-run units, with performance-based rates, will remain unaffected even if market prices fall below costs.
N-2Report - Refiled
4 passages
The SRMC test involves the following steps: 1. Determine the average annual system marginal cost (over 8760 hours in 2025) at the transmission delivery level. In calculating this marginal cost, the effects of exports and load served under...
AI summary The SRMC test calculates the system marginal cost at the transmission level and compares it to the unit revenue of each rate class. The test involves adjusting for the effects of exports and the ELIADC Tariff, and determining whether rate classes fail based on their revenue relative to marginal costs.
3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MAGINAL COSTS SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for clas...
AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs (SRMC). It explains how SRMC test results are determined by comparing modified average unit revenues to actual marginal costs, and highlights the impact of timing differences between regulatory ratemaking and changes in average annual cost of service.
11 4.2 SRMC Test for the Above-the-Line Classes 12 13 The actual 2025 revenues of the ATL rate classes reflect the base cost rates approved for use in 14 2024 and the 2025 DCRR and 2025 Storm Cost Recovery Riders (SCRR). Consistent with th...
AI summary The 2025 revenues for the above-the-line (ATL) rate classes have been adjusted based on the 2024 base cost rates, 2025 DCRR, and 2025 Storm Cost Recovery Riders (SCRR). Modifications include removing customer charge-related revenues and adding back supply interruptible credit to LIIR revenues. All ATL rate classes pass the SRMC test in 2025.
Q. How should the SRMC test be used? - A. In using the test, it is important to note that there may be good reasons why a rate will fail the test: - If gas and oil prices are very high and coal prices very low, a cost-based rate (i.e., a r...
AI summary The SRMC test is a tool to evaluate rates, and a rate may fail it under certain conditions such as extreme price fluctuations or due discrimination. If a rate fails the test without acceptable justification, it should be adjusted to pass the test.