P-2NSPI (UARB) IR-1 to IR-33; NSPI (Irving Oil) IR-1 to IR-7; NSPI (CBRM) IR-1 to IR-17 - Responses
46 passages
RESPONSE TO INFORMATION REQUEST TO: NSUARB FROM: NSPI Question IR-1: The existing GRLF Rate appears to be promoting self-generation while the proposed Load Retention Rate is designed to discourage self generation and as such the two rates...
AI summary NSPI responds to a question about the potential conflict between the GRLF Rate and the proposed Load Retention Rate, stating that there is no conflict and that both rates serve the interest of all customers by supporting self-generation where appropriate.
RESPONSE TO INFORMATION REQUEST TO: NSUARB FROM: NSPI Question IR-6: Section 48 (3) of the Public Utilities Act R.S.N.S., c.380, states that "Where Nova Scotia Power Incorporated applies to the Board to increase its capacity to produce pow...
AI summary NSPI responds to a question about whether the Load Retention Rate contradicts Section 48 (3) of the Public Utilities Act, which requires the Board to consider private producers when approving increased generating capacity. NSPI asserts there is no contradiction, as the Load Retention Rate aims to discourage premature new generation but does not prevent it under Availability Clause (I).
RESPONSE TO INFORMATION REQUEST TO: NSUARB FROM: NSPI Question IR-10: The Board's "Rules of Practice and Procedure Respecting Regulatory Proceedings" address the issue of confidentiality in Section 7, Paragraphs (1) through (11). Please di...
AI summary NSPI responds to a question about potential conflicts between the Board's confidentiality rules and the load retention rate's implementation. NSPI notes that the Rules of Practice allow for confidential filings during public hearings and that the Board has the authority to adjust rules as needed for the public interest.
DETERMINATION OF DEMAND Demand or kW demand noted in this schedule shall be the kW demand integrated over the demand interval. Demand interval shall be of the same duration specified in the rate schedule under which standard service is pro...
AI summary The document defines demand and demand interval as part of the rate schedule. Demand is measured as kW demand integrated over a specified interval, which is 30 minutes if standard service is not provided by the Company.
Customer's Reactive Kilovolt-Ampere Demands The customer's maximum thirty-minute leading or lagging kilovolt-ampere demand shall be apportioned among the various types of service utilized under this schedule in proportion to the customer's...
AI summary The document outlines the method for apportioning a customer's maximum thirty-minute reactive kilovolt-ampere demand among different service types based on their kilowatt portions of Supplementary, Maintenance, and Standby Power Demand.
Cancelling RATE DESIGNATION: 450 CLASS OF SERVICE: COMPETITIVE RATE - LARGE POWER AND LIGHTING SERVICE AREA: ALL MINNESOTA SERVICE AREA Avai.lability: To individual customers or to groups of customers within the Company's Large Power and L...
AI summary This section outlines the competitive rate designation for large power and lighting customers in Minnesota, specifying eligibility, terms, and conditions for offering such rates, including MPUC approval processes and cost recovery mechanisms.
ORIGINAL VOLUME NO. 8 ORIGINAL SHEET NO. 22.1 _R_A_T_E_D_E_S-IG_N_A_T-IO_N_:-·4,5(~. ·(~.)f CLASS OF SERVICE: COMPETITIVE RATE - LARGE POWER AND LIGHTING SERVICE AREA: ALL MINNESOTA SERVICE AREA - (5) T_he maximum rate reduction offered un...
AI summary This section outlines a competitive rate schedule for large power and lighting services, specifying that the maximum rate reduction cannot exceed the difference between the company's rate and the customer's cost for the lowest cost competitive energy supply.
Unless specified to the contrary in writing by the Company to any customer using this schedule, the on-peak and off-peak period available to all customers is as follows: On-Peak Time Period Length On-Peak Hours Off-Peak Hours 14 hours 8 a....
AI summary The document outlines the on-peak and off-peak hours for customers, specifying that on-peak hours are from 8 a.m. to 10 p.m., Monday through Friday, while off-peak hours include all other times, including weekends, holidays, and other days not covered by on-peak periods.
5. Metering and Service Facilities The Company will furnish and install appropriate metering to measure energy flow. The customer shall make a nonrefundable contribution for the cost of any instrument transformers required by the Company t...
AI summary The document outlines the responsibilities of customers regarding metering and service facilities, including nonrefundable contributions for instrument transformers, installation of service entrance equipment, and reimbursement for rebuilding Company facilities to accommodate parallel generation systems.
AVAILABILITY: Schedule NS is designed to allow the Company to offer, on an experimental basis through December 31, 1999, prices and/or tenns and conditions that meet unique customer needs. It is available only to individual customers who w...
AI summary Schedule NS is an experimental offering by the Company, available to individual customers with at least 5 MW of combined demand, allowing them to access prices and terms tailored to their needs. It is limited to 300 MW of participation and requires a confidential filing to demonstrate compliance with system return requirements.
Energy Charge: The energy charge per kilowatt-hour for all kilowatt-hours applicable under this rate schedule are $0.062 during the billing periods ending in the months of December, January, February, and March and $0.052 during the billin...
AI summary The energy charge per kilowatt-hour is set at $0.062 during certain months and $0.052 during others. Rates are adjusted annually based on diesel fuel prices from The Wall Street Journal, with adjustments limited by a bandwidth to prevent excessive changes, especially in the early years.
Reactive Demand Charge: In situations where appropriate metering is installed and customers execute Customer Service Agreements on or after April 3, 1995, the Company will charge customers for reactive demand. The reactive demand charge fo...
AI summary The document outlines the reactive demand charge structure for customers with appropriate metering and Customer Service Agreements executed after April 3, 1995. Large General Service customers are charged $.67 per kVar for reactive demand exceeding specific thresholds, while other customers are charged $.67 per kVar for all reactive demand exceeding 50% of their highest monthly kW demand.
AVAILABILITY. Subject to the limitation set forth below on the total number of contracts in effect hereunder at any one time, this rate is available to any non-residential customer taking service from the Company under Rate 6L, Large Gener...
AI summary This rate is available to non-residential customers under Rate 6L, Large General Service, provided that bypassing the Company's electric service is economically feasible and practical. However, service under this rate is not available for energy previously served under Rider 27 unless the displaced generation facilities are no longer capable of providing that energy.
ELIGIBLE LOAD. For a customer entering into an initial Rate CS contract. service hereunder shall be available only to existing load, which, for purposes of this rate, is defined as the customer's highest Maximum Demand for the calendar yea...
AI summary Eligible load under Rate CS is defined as the customer's highest Maximum Demand in the prior calendar year. For recontracting customers, service is limited to the volume of eligible load under the prior contract. New or expanded load is not eligible for service under this rate.
and electrical requirement.s that makes it well-suited to the installation of a cogcneration facility. In addition, Consumers says that Upjahn has the capability to move pI"od.uction to other states. Therefore, Consumers asserts, it undert...
AI summary Consumers has signed a 10-year special contract with Upjohn, which is exempt from the power supply cost recovery clause. The contract includes rate escalations based on the producer price index, with a floor and cap. Consumers argues that the agreement benefits both parties and supports economic development and system stability.
AVAILABILITY: The Load Retention Rate is available to customers which meet the following criteria 1. The Customer must provide notice to the Company that they will request termination of electrical service for either a portion or all of th...
AI summary The Load Retention Rate is available to customers who meet specific criteria, including providing notice of termination due to alternative generation, demonstrating departure from the El Paso system for financial reasons, and submitting a notarized affidavit confirming they would leave the system without the Load Retention Rate.
REQUIRED INFORMATION: The Company shall obtain the following information from the Customer, and file that information with the New Mexico Public Utility Commission (NMPUC): - 1. The customer shall provide detailed engineering and economic...
AI summary The Company is required to obtain specific information from customers, including engineering studies, sworn affidavits, and agreements on energy usage limits, to be filed with the New Mexico Public Utility Commission.
the billing demand of the consumption period minus the billing demand noted outside of the test period(s); multiplied by: 10.00( per kilowatt of demand in the summer period; 30.00( per kilowatt of demand in the winter period; multiplied by...
AI summary The customer's bill is calculated by summing the results of two components: one based on the difference in billing demand during the consumption and test periods, and another based on demand charges during summer and winter periods, multiplied by the number of test period hours.
Billing at the Load Retention Rate 171 For each consumption period, the load Retention Rate, which is applied to the whole or to any eligible portion of a customer's bill, is applied according to the following calculations: - a) a bill is...
AI summary The load Retention Rate is applied to a customer's bill based on two calculation methods, with the higher value determining the final bill. The rate applies to the entire or a portion of the load, determined by agreement between the customer and Hydro-Quebec, considering factors like voltage discounts and transformation losses.
BENEFITS For existing and potential Ontario Hydro Direct customers and Large Use customers of municipal utilities faced with major decisions that involve energy cost considerations, a LREP could ensure that their electricity prices are hig...
AI summary A Load Retention and Expansion Price (LREP) can help existing and potential Ontario Hydro Direct and Large Use customers ensure competitive electricity prices, benefiting the provincial economy and utilities retaining or acquiring these customers.
TERMS AND CONl>ITIONS - Ontario Hydro's evaluation will include, among other things: a review and assessment of the third-party reviewer's report; the supporting documentation provided by the applicant; and the effect, if any, that grantin...
AI summary The document outlines the terms and conditions for the Load Retention and Expansion Price (LREP) agreement, including evaluation processes, contract duration, energy efficiency requirements, and approval requirements from the Ontario Hydro Board and the provincial government.
DEFINITIONS 1. Base Period The base period is normally the twelve months ended December 31, 1986. If twelve months of billing history are unavailable for the period ended December 31, 1986, the base period is the first full twelve months o...
AI summary The document defines key terms related to billing and service locations, including the base period, sales tax exemption certificate, service location, new service location, and qualifying service location. It also outlines billing adjustments for existing customers based on usage compared to the base period.
GENERAL CONDITIONS - 1. The customer must demonstrate that it has a viable competitive alternative to service under Rate Schedule LP-5, LP-6, or IS-T to be eligible for this rider. The customer must provide written information, satisfactor...
AI summary The general conditions outline the process for customers seeking competitive rates under Rate Schedule LP-5, LP-6, or IS-T. Customers must prove they have a viable alternative, provide documentation, and demonstrate financial capability. The company retains sole discretion in determining appropriateness and setting rates.
that the customer is financially capable and willing to implement its viable, currently available competitive alternative. CONDITIONS OF SERVICE. Electric service under this rider shall be firm. RATE, BILLING AND UNBUNDLING. The rates nego...
AI summary The Economic Efficiency Rider (EER) outlines conditions for electric service, rate structures, and unbundling procedures. Rates are based on the customer's competitive alternative and must not be below the end-block price of the Base Rate. Unbundling procedures are detailed for contracts lacking Direct Access provisions and applicable discounts.
SPECIAL CONDITIONS (Continued) - 5. Contribution to Margin (CTM) Credit: This credit is limited to a combined total of 55 MW of load from all customers to which the CTM Credit is extended. It is applicable only to customers with a SIC Code...
AI summary The document outlines special conditions for a utility service schedule, including limits on the Contribution to Margin (CTM) Credit, rules for customers with recorded demands over 4,000 kW, revenue accounting components, seasonal definitions, and ineligibility for other discounts. The text includes references to a decision and filing by Southern California Edison and the California Public Utilities Commission.
SPECIAL CONDITIONS (Continued) - 10. Billing: A Customer's bill is first calculated according to the total rates and conditions above. The following adjustments are made depending on the option applicable to the customer. - a. Bundled Serv...
AI summary The document outlines billing conditions for different customer service options, including bundled service, direct access, and hourly PX pricing. It details how bills are calculated, adjustments made, and the inclusion of various charges such as the Competition Transition Charge (CTC). The CTC payment method can be negotiated between marketers or brokers and customers.
GENERAL FINDINGS The general findings of the survey illustrate the extent to which economic development utility rates or other similar vehicles are utilized among the states to compete for business customers. As competition continues in th...
AI summary The document discusses how states use innovative utility rates, such as economic development and load retention rates, to attract and retain business customers. It highlights that 39 out of 45 states offer such rates, often to stimulate business activity and reduce the frequency of rate cases. Midwestern states like Illinois and Michigan are noted for offering these rates, while Wisconsin does not offer them to electric customers.
SECTION B. Load Retention Rates Load retention rates are generally discounted utility rates offered on a customer's existing load in response to a bonafide threat of bypass, and in exchange for the customer's agreement to continue receivin...
AI summary Load retention rates are discounted utility rates designed to prevent customers from bypassing the utility by installing cogeneration or self-generation facilities. These rates help sustain system load and retain customer revenues, benefiting ratepayers by minimizing potential revenue deficiencies. Illinois is among several states that offer these rates for both electric and gas customers.
SECTION C. Economic Development Related Rates For purposes of this report, economic development related rates are those that provide an economic motivation to a customer in exchange for the alteration of the customer's load pattern (not ne...
AI summary This section discusses economic development related rates, focusing on interruptible rates and off-peak load rates. Interruptible rates allow customers to accept service interruptions in exchange for lower rates, benefiting both customers and utilities by reducing costs. Off-peak rates encourage energy use during non-peak times, lowering customer costs. Illinois is highlighted as one of 37 states allowing such rates.
Enhance the competitiveness of a specific industry 11 Increase the efficiency of utility plant utilization 32 Other 13 No Response 14 The same of the same of the same of the same of the same of the same of the same of the same of the same...
AI summary The document text contains a heading and a table with fragmented and repeated entries. It appears to be related to utility rate structures, including terms like 'Rate', 'Tar', 'Fix', and mentions of 'Electric' and 'Alabama'. However, the content is largely incomplete and repetitive, making it difficult to extract meaningful information.
Introduction PROSCREEN II, a computer software system developed by Energy Management Associates (EMA), The Utilities Division of EDS, supports electric and gas utility decision analysis and corporate planning. The system combines quality p...
AI summary PROSCREEN II is a comprehensive software system developed by Energy Management Associates (EMA) for utility planning and decision analysis. It includes twelve application modules and offers flexibility through a control system and a GUI, allowing users to manage data entry, scenario analysis, and reporting efficiently.
PROSCREEN II: Evolution of the Industry Leader PROSCREEN II is fully supported by the technical and consulting services of Energy Management Associates. PROSCREEN II is an evolving product. enhanced and upgraded continuously. The PROSCREEN...
AI summary PROSCREEN II is a continuously evolving utility planning tool developed since 1982. It has been instrumental in financial and resource planning for utilities, particularly in handling high interest rates, creative financing methods, and incorporating price elasticity feedback to manage demand and rate shock.
General Description PROSCREEN Il's advantage as an integrated planning system is its strength in all functional areas of utility planning. PROSCREEN Il allows analysts to address all aspectS of an integrated planning study at the depth and...
AI summary PROSCREEN II is an integrated utility planning system that offers comprehensive capabilities in demand and supply-side resource optimization, financial analysis, and production cost simulation. It is connected to EMA's PROMOD III system, allowing for seamless data integration and analysis of financial implications.
veral load groups may be easily combined into a single DSM alternative if desired in PROVIEW. In addition to the optimal plan, PROVIEW develops multiple suboptimal DSM portfolios for further analysis. The user also has available the same i...
AI summary The text discusses the use of PROVIEW in analyzing demand-side management (DSM) alternatives, including the ability to combine load groups and examine the financial and rate impacts of specific programs through penetration factor inputs.
Module Methodology The LF A Module allows the user to create electric company load forecasts to be transferred. to the GAF Module for production costing purposes. The LF A processes the components of company load at a class and group level...
AI summary The LF A Module is used to create electric company load forecasts, which are transferred to the GAF Module for production costing. Load forecasts are developed at the class and group level, with seasonal load shapes represented by typical weekly profiles. The module also estimates demand-side program costs and customer costs for use in other modules.
Output Reports The following repons are provided by t.l-ie CER Module: - Project Financial Cost Flows Bond Sizing Report - System Report Project Revenue Requirements - Oass Report System Revenue Requirements - Project Report Busbar Costs R...
AI summary The document outlines various output reports generated by the CER Module, including financial cost flows, revenue requirements, busbar costs, and diagnostics for evaluating processing results. These reports cover bond sizing, deferred taxes, AFUDC, plant closings, and other financial considerations.
escalation rates or annual amounts. - Users have the ability to enter any deferred debit or credit balances as well as any changes to these balances through deferred expense or revenue respectively. - Federal tax liability is calculated an...
AI summary The text describes capabilities related to tax calculations, rate increases, cost allocation, and financial impact analysis. It includes features such as deferred tax handling, automatic rate adjustments, cost of service methodologies, and tools for evaluating DSM program impacts.
Rate Change Logic After the desired financial condition is reached, the FIR Module recreates the Income Statement, Balance Sheet, and Statement of Cash Flows to account for changes in interest expense, dividends, etc. Expenses and rate bas...
AI summary The FIR Module iteratively adjusts revenues to meet desired financial targets such as rate of return on equity, total capital, or jurisdictional rate base. This process recalculates financial statements and ensures liquidity by adjusting revenues until the desired cash and rate of return levels are achieved, resulting in an initial rate change request for regulatory approval.
Class Revenue The Oass Revenue Module (CRM) provides for a complete breakdown of expe~ses, rate base, and rate increases into jurisdictions ( e.g., retail, FERC, etc.), and rate classes (e.g .• residential, commercial, industrial). This mo...
AI summary The Oass Revenue Module (CRM) breaks down expenses, rate base, and rate increases by jurisdiction and rate class, and is part of the FIR Module. It helps analyze the impact of alternative plans on load management, conservation, and marketing for different customer groupings.
Public Power Application in the Financial Reporting and Analysis Module The FIR Module incmporates the explicit financial and rate change characteristics of REA cooperatives, municipals and joint-action agencies without the approximation a...
AI summary The FIR Module in PROSCREEN II is designed to model public power entities with specific financial and rate change logic, ensuring adequate net margin and compliance with coverage restrictions. It handles different incorporation types and automatically adjusts financing and rates based on assumptions, including tax liabilities for taxable cooperatives.
Module Logic The CRM employs a two-step process to develop class rate and revenue forecasts. The first step is to calculate a cost of service at the rate class level .. The second is to develop rates for each class based on this cost of se...
AI summary The CRM uses a two-step process to develop class rate and revenue forecasts: first calculating the cost of service at the rate class level, and then developing rates for each class based on this cost of service.
Class Cost of Service The CRM combines the functiooalization and classification steps of a cost of service analysis as its initial process, referred to as the classification process. Plant and expense items are assigned to user-defined cla...
AI summary The CRM combines classification and functionalization steps in a cost of service analysis. Plant and expense items are assigned to user-defined categories, and classified costs are allocated to jurisdictions and rate classes using various methods such as Coincident Peak Demand, Noncoincident Peak Demand, and KWH Energy Sales.
Revenue Determination The structure of the CRM is designed to provide the user with maximum flexibility in modeling. By altering the number of asset classes or classification categories modeled, it is possible to produce a substantially de...
AI summary The CRM module offers flexibility in modeling cost of service analysis by allowing users to adjust allocation methods and control revenue requirements. It accounts for regulatory lag, political influences, and competitive market realities, ensuring total revenue and net income align with jurisdictional targets.
RESPONSE TO INFORMATION REQUEST TO: IRVING OIL LIMITED FROM: NSPI Question 4: Reference: Proposed load retention rate availability condition ( 4). Please explain the rationale for not making this rate available to new load. Response 4: The...
AI summary NSPI explains that the Load Retention Rate is intended for existing customers and not new load, as other rates are available to encourage new load, including the Industrial Expansion Interruptible Rate, Time-of Day Expansion Rate, and Surplus Power Interruptible Rate.
"REVISED" Question IR-7: Reference 1) Direct evidence of Christopher Huskilson, page 3, lines 5- 11: "To ensure that load retention rates are offered only in circumstances where they are justified, NSPI proposes that such rates be based on...
AI summary The text references a proposal by NSPI to justify load retention rates based on their benefit to other customers and mentions NSPI's 1998 power exports following approval from the National Energy Board and a new transmission tariff.
RESPONSE TO INFORMATION REQUEST TO: CAPE BRETON REGIONAL MUNICIPALITY FROM: NSPI Question IR-17: In what ways does the proposed load retention rate serve the public interest? Is the proposal consistent with the principle of equity? If so,...
AI summary NSPI explains that the proposed load retention rate avoids rate increases by retaining load, benefits all customers, addresses equity as discussed in a prior response, and promotes efficient use of existing resources to minimize electricity costs in Nova Scotia.
P-3NSPI (Sempra) IR-1 to IR-14
61 passages
9 10 Since that time, NSPI has filed additional rate design materials and a study of NSPI' s 11 rate proposals was completed by consultant Douglas Bowman at the request of the 12 Board. On August 17, 1995, NSPI filed an application for an...
AI summary The document discusses NSPI's application for a 3% rate increase and changes to rate design, following the submission of additional materials and a study by consultant Douglas Bowman. The Board requested a review of previous recommendations and information on rate design and industry restructuring impacts.
3 4 As I stated in my previous testi1nony, the prin1ar; purpose of TOU rates is to 5 improve the extent to which rates reflect the cost of producing electricity. Most 6 utilities have costs that vary by time of day or time of year in a rel...
AI summary The text discusses the purpose of Time-of-Use (TOU) rates, emphasizing their role in aligning electricity prices with production costs and encouraging efficient consumer decisions. It notes that while all parties support TOU rates in principle, NSPI and Mr. Bowman differ on the extent of their implementation.
2 3 First, while seasonal demand charges would improve NSPI's rate structures, they are 4 not substitutes for seasonal TOU rates. Under the seasonal demand charge approach, 5 customers are charged based on their single highest load occurri...
AI summary The text discusses the differences between seasonal demand charges and time-of-use (TOU) rates, emphasizing that TOU rates provide ongoing incentives for customers to reduce demand during peak periods, unlike seasonal demand charges which only penalize the highest load during on-peak hours.
12 Lost Revenue Recovery Mechanisms 13 14 Although lost revenue recovery mechanisms are usually associated with demand-side 15 management programs, I support establishing temporary mechanisms for innovative 16 rate designs. Most utilities...
AI summary The text discusses lost revenue recovery mechanisms for innovative rate designs, highlighting their role in reducing revenue risks for utilities and protecting customers. It contrasts temporary mechanisms with ERAM-type systems, arguing that a targeted, temporary approach balances innovation and efficiency.
16 Voluntary versus :Mandatory rates 17 18 In my previous testimony, I discussed the issues surrounding voluntary versus 19 mandatory TOU rates but did not take a position. Bowman and NSPI both recommend 20 voluntary TOU rates and NSPI als...
AI summary The text discusses the pros and cons of voluntary versus mandatory time-of-use (TOU) rates. While mandatory TOU rates are more efficient in promoting fair cost distribution, voluntary rates are easier to implement. The author supports voluntary TOU rates, provided revenue shortfalls are addressed by non-participating customers, leading to a gradual shift toward more efficient rate structures.
I Pilot TOU Programs 2 3 Utilities do not need to conduct pilot programs before adopting voluntary TOU rates. 4 In fact most have not. The primary purpose of TOU rates-to provide more efficient 5 price signals-can be accomplished without s...
AI summary The text argues that pilot Time-of-Use (TOU) programs are not necessary for utilities to adopt voluntary TOU rates, as the primary purpose of TOU rates can be achieved without studying customer response. While TOU pilots can provide valuable load shifting data, they are costly and time-consuming, leading most utilities to rely on other utilities' experiences and predictive models instead.
19 TOU Rate Structures and Revenue Reconciliation 20 21 For price signals to be efficient, they must present a reasonably accurate picture of 22 the utility's marginal costs. The challenge for TOU rate design involves providing 23 efficien...
AI summary The document discusses the challenges of designing Time-of-Use (TOU) rate structures that provide accurate price signals while recovering embedded revenue. NSPI found that reconciling marginal costs with revenue requirements using an equi-proportional method results in rates that deviate significantly from marginal costs. Bowman evaluated several reconciliation methods, concluding that the customer charge approach aligns best with marginal costs, though it may lead to higher customer charges.
I Implementation Timelines 2 3 Mr. Dominie states on Page 5 of his direct evidence that NSPI would not plan to 4 begin its experhnental TOU rate until after its new customer information system is 5 completed in 1997. While NSPI might be ab...
AI summary The document discusses NSPI's planned timeline for implementing a Time-of-Use (TOU) rate, noting that it would begin after the completion of a new customer information system in 1997. It also references Hydro-Quebec's experience with implementing a similar program and considers the timing of launching the TOU program during the winter months.
III. SEASONAL RATES AND DECLINING BLOCK RATES FOR DOMESTIC CUSTOMERS 21 22 In my previous testimony I recommended that NSPI pursue seasonal rates (non-time 23 differentiated) for all customer classes. With regard to NSPI's proposal to offe...
AI summary The testifier previously recommended seasonal rates for all customer classes and did not find sufficient justification for NSPI's proposal to offer declining block rates to domestic customers for both summer and winter. This position remains unchanged based on the current case review.
5 Seasonal Rates 6 7 In 1993 I looked at NSPI's embedded cost of service study and found significant 8 differences between summer and winter costs. In the Interim IR-R2, NSPI reports a 9 seasonal differential in avoided costs for the year...
AI summary The text discusses seasonal rate differentials based on NSPI's embedded cost of service study and the reconciliation of seasonal avoided costs using the equi-proportional method, leading to higher winter rates for some customer classes.
1 Domestic Declining Block Rates 2 3 With regard to declining block rates for domestic customers, my previous concerns 4 related to information, or lack thereof, about the cost of serving large- versus small s use customers. Declining bloc...
AI summary The text discusses concerns about the efficiency of declining block rates for domestic customers in Nova Scotia, noting that they are efficient when large-use customers consume more energy during off-peak periods but not when usage is weighted toward on-peak periods. The analysis found no additional support for these rates and concluded that the proposal remains unchanged.
IV. GENERAL RATE DESIGN CONSIDERATIONS 2 1 3 I would now like to turn to rate design issues of a general nature !hat the Board has 4 asked me to address. 5
AI summary The speaker is addressing general rate design issues requested by the Board, indicating a focus on broader rate design considerations rather than specific programs or regulatory processes.
6 Balancing Multiple Objectives 7 8 The degree to which a particular rate design promotes economic efficiency depends on 9 the price component customers rely on to evaluate purchase decisions. If this price IO reflects a utility's marginal...
AI summary This section discusses the importance of balancing economic efficiency with other objectives in rate design, such as rate stability, simplicity, and assisting low-income customers. It highlights the challenges of implementing Time-of-Use (TOU) rates, including customer resistance to large fixed charges and the need to align rate changes with public expectations.
10 Short-Run versus Long-Run Marginal Costs 11 12 I indicated that for utility rates to be considered efficient they must reflect marginal 13 costs. Marginal costs can be measured over either the short run or long run. For rate 14 design p...
AI summary The text discusses the importance of distinguishing between short-run and long-run marginal costs in utility rate design. Short-run marginal costs are appropriate for short-term contracts, while long-run marginal costs are better for long-term decisions, such as those made by consumers choosing between energy sources for new homes.
11 Elasticity Estimates 12 13 Estimates of price elasticity are useful for predicting how customers will respond to 14 rate changes. Most utilities include some type of price coefficient in their load 15 forecasting models. These coefficie...
AI summary Price elasticity estimates help predict customer responses to rate changes. While industry studies show measurable responses to TOU rates, results vary and cannot be generalized. Dr. Globerman notes that precise guidance is limited, but the evidence suggests TOU rates generally lead to significant response, justifying additional metering costs. Lost revenue recovery mechanisms are recommended for innovative rates due to uncertainty in customer participation and shifting behavior.
V. HYDRO-QUEBEC'S RECENT TOU EXPERIMENT 11 10 12 In its recent two-year pilot (1993-1994), Hydro-Quebec found that voluntary TOD 13 rates significantly reduced the peak loads of residential customers. Some of the 14 information learned may...
AI summary Hydro-Quebec's two-year Time-of-Use (TOU) pilot (1993-1994) showed that voluntary Time-of-Day (TOD) rates significantly reduced residential peak loads. Participants paid higher on-peak rates and lower off-peak rates, with no significant change in off-peak consumption. Load management devices enhanced the program's effectiveness, and Hydro-Quebec plans to expand the initiative.
VII. SUMMARY 17 18 In summary, I continue to endorse TO U rates for reasons of efficiency and fairness. 19 While I expect TOU rates will result in either load shifting or load reduction, neither 20 is required for my support. If loads did...
AI summary The summary supports TOU rates for efficiency and fairness, endorses a lost revenue recovery mechanism for NSPI with conditions, supports seasonal rates but questions year-round declining block rates, and encourages Flexible Pricing to address customer needs in a competitive environment.
Senior Project Manager (1982 to 1985) Electric Power Research Institute Developed, managed, and coordinated projects related to demand-side planning, rate design, load forecasting, and customer behavior and response. Major projects include...
AI summary The text outlines the professional experience of an individual in the energy sector, focusing on roles in demand-side planning, rate design, load forecasting, and load management. It highlights projects related to forecasting software, load control experiments, and textbooks on marginal cost calculations.
Books :;,_ f "The Future of Integrated Resource Planning." Electric Utilities Moving into the 21st Century. Edited by Greg Enholm. 1994. Demand-Side Management: Concepts and Methods (2nd Edition). With Clark W. Gellings. Lilburn, GA.: Fair...
AI summary The text lists various publications and chapters related to electric utility management, focusing on demand-side management, rate design, and forecasting methods, with contributions by Clark W. Gellings and others. These works span from the 1980s to the 1990s and cover topics such as conservation, load forecasting, and integrated resource planning.
Conference Proceedings and Papers - "The Effect of Increasing Competition and Deregulation on IRP and DSM." In Proceedings of the 7th National Demand-Side Management Conference. With G. Collins and S. Shaffer. Cosponsored by Electric Power...
AI summary The text lists a series of conference papers and proceedings related to demand-side management (DSM), integrated resource planning (IRP), and energy efficiency in competitive markets. These papers were presented at various conferences between 1992 and 1995, with topics including DSM financial incentives, customer value, and utility shareholder mechanisms.
Articles in Technical Journals - "Cloudy Days for DSM." With A. Faruqui and G. Wikler. Electricity Journal, vol. 7, no. 6, July/August 1994, pp. 54-66. - "Efficient Block Rate Structures: Rethinking Conventional Wisdom." With K. Seiden. El...
AI summary The text lists various academic articles published in technical journals, primarily focusing on topics related to demand-side management (DSM), rate structures, forecasting models, and electricity generation costs. These articles were authored by John H. Chamberlin and his colleagues and appeared in journals such as the Electricity Journal, EPRI Journal, and The Engineering Economist.
Technical Reports Demand-Side Mana.gement: Decoupling Profits from Sales. With M. Reid. Washington, D.C.: Edison Electric Institute, January 1993. Customer Response to Rate Options. With A. Fauqui, S. Shaffer, K. Seiden, M. Mauldin, and S....
AI summary The text lists various technical reports related to demand-side management, rate design, and cost-benefit analysis in the electricity sector, primarily authored by individuals and organizations associated with the Edison Electric Institute and the Electric Power Research Institute (EPRI). These reports focus on energy efficiency, rate structures, and load management.
SELECTED PRESENTATIONS f l l - "Lessons Learned from the California Experience." Regulatory Restructlfring Conference sponsored by Electric Utility Consultants, Denver, CO, April 1995. - "Pricing and Rate Competition." Retail Wheeling Summ...
AI summary The document lists a series of presentations and conferences related to energy regulation, demand-side management, and competitive electricity markets, focusing on topics such as pricing strategies, regulatory restructuring, and strategic planning in the utility sector.
COURSES AND LECTURES Lecturer: "Rate Course" and "Innovative Pricing." Sponsored by EPRl, Tampa, FL, February 1994. Lecturer: "Pricing as a Marketing Tool." Demand-Side Management Course, Center for Professional Advancement, Burlingame, Ca...
AI summary The text lists various courses and lectures on topics such as rate design, demand-side management, integrated resource planning, and forecasting methods, delivered by different lecturers and organizations between the 1970s and 1990s.
DR. CHAMBERLIN - DIRECT EVIDENCE In 1993, I testified in the board's Thank you. generic rate design hearing on pricing issues related to Nova Scotia Power. Since that time a considerable amount of new analysis has been presented to the The...
AI summary Dr. Chamberlin testified in a 1993 rate design hearing and reaffirms his support for time-of-use (TOU) rates, emphasizing their benefits in improving resource efficiency and providing accurate hourly cost signals. He argues that TOU rates are superior to seasonal demand charges and should be implemented in Nova Scotia Power's situation.
DIRECT EXAMINATION BY MR. OUTHOUSE Q. Thank you, Dr. Chamberlin. Dr. Chamberlin, the only question that I would have before cross-examination; you said in your remarks that avoided cost is not synonymous with long-run marginal cost. Can th...
AI summary Dr. Chamberlin is being questioned about the distinction between avoided cost and long-run marginal cost, clarifying that they are not synonymous. This distinction is important in regulatory proceedings involving cost recovery and rate design.
DR. CHAMBERLIN, DIRECT EXAM. BY MR. OUTHOUSE 2749 - be calculated in a similar manner? - 2 They can be calculated in a similar manner, in which Α. case avoided costs are calculated if they're 3 calculated the same way as long-run marginal...
AI summary The discussion revolves around the calculation of avoided costs and long-run marginal costs, with the expert noting that they can produce similar results if calculated on the same planning assumptions. The expert also clarifies that avoided costs are often used differently in PURPA contexts and may involve distinct approaches compared to long-run marginal costs.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE A. Well, it's been a couple of years since I looked at that. I'm not sure that I can in detail. What I recollect from a couple of years ago was that, as I looked at NSPI's embedded cost of service s...
AI summary The discussion centers on the allocation of fixed costs between winter and summer periods in relation to time-of-use initiatives. Concerns are raised about whether fixed costs are being arbitrarily assigned to winter and whether shifting consumption would lead to cost savings. The expert responds that the issue is one of efficiency rather than allocation.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE - A. I've heard you say that several times. I just don't think I can agree with it. I wouldn't price it that way. I would price it as to cost and let customers' value choices drive their decisions a...
AI summary Dr. Chamberlin discusses pricing strategies, emphasizing cost-based pricing and customer value choices, and expresses views on flexible rates versus the domestic third block. He highlights the importance of unbundling reliability and allowing customers to make decisions based on their value preferences.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE 2762 would not be considered at risk. How would you rationalize your position on those two items? Well, I think there's several differences. Α. The concern that I had with the third block is, first...
AI summary Dr. Chamberlin discusses concerns with the third block rate, suggesting that a time-of-use rate would better align costs with load. He also highlights the long-term obligation to serve customers with heating systems, which affects costs over 15–20 years, unlike flexible rates that unbundled obligations.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE - A. And this is information which is they regard as very important and highly confidential. first observation. The second observation is I don't think it's a matter of fairness, I think it's a If y...
AI summary The discussion centers on customer concerns regarding the disclosure of cost information and its impact on business decisions. The witness highlights the potential risk of customers leaving if forced to reveal sensitive information to competitors, and the board is asked how to determine if this is a real possibility or just a bandwagon effect.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE 2768 would that tell you about the current level of our electricity rates for industrial load? - A. I don't know that it would tell me anything without knowing a lot more than I do about what load g...
AI summary The cross-examination discusses the impact of electricity rates on industrial load, the need for NSPI to demonstrate effects of price changes on production decisions, and the importance of pricing incremental energy at marginal cost to promote efficiency.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. KEHOE - Q. Well, that was my next question. That's exactly the problem. It's all customers really should have from a fairness perspective and an efficiency perspective, all customers really should have ac...
AI summary The discussion focuses on the fairness and efficiency of time-of-use rates, with the argument that they better align customer usage with marginal costs. The question also explores whether increasing the number of customer classes could achieve similar outcomes if time-of-use rates are not implemented.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. MACDONNELL 2772 think marginal - Q. If you'd like to substitute a word, that's fine. - A. I think reflecting marginal costs in the rates is a very important thing to do. I think, the more efficiency is an...
AI summary The discussion focuses on the importance of reflecting marginal costs in rates and the reconciliation process involving revenue requirements. It highlights the differences between marginal cost-based and embedded cost-based revenue requirements, particularly in examples like California.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. MACDONNELL 2773 part of the reconciliation process? A. Sure. Acknowledging that one way to do cost Q. Okay. Is there a necessity to be consistent between the cost allocation study and rate design? allocat...
AI summary The discussion centers on the importance of consistency between cost allocation studies and rate design, particularly when there is a disparity between embedded energy costs and marginal energy costs. The concern is that using a cost allocation method that assigns fixed capital costs based on energy consumption may lead to inefficiencies if rates are set based on lower marginal costs, potentially attracting more demand than revenue can support.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. MACDONNELL 2775 - Q. Just on page 26 to 28 of your study I've been asking most witnesses a couple of questions about competition. That's the portion of your study relating to flexible rates and competitio...
AI summary The discussion centers on the concept of flexible rates and competition in Nova Scotia. The witness acknowledges the potential value of flexible rates but emphasizes the need for regulatory guidelines. The conversation explores the challenge of avoiding undue discrimination in rate design, especially during the transition to a more competitive market.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. MACDOUGALL 2785 allocation studies would reflect 65% of fixed costs classified to energy. - I didn't review them, though. So, I'm I mean, in Ā. concept if I'll agree with this. In concept if capacity cost...
AI summary Dr. Chamberlin discusses the allocation of capacity costs to energy in allocation studies, noting that if 65% of fixed costs are classified to energy, this could lead to over-allocation and affect pricing. He also mentions that revenue reconciliation and rate design play a role in how these costs are ultimately reflected.
DR. CHAMBERLIN, CROSS-EXAM, BY MR. MacDOUGALL 2790 - 1 A. It's addressed in several people's testimony, and 2 disagreed about, so I have done a study myself. - Q. If you didn't, I was going to say, an approximation would be about three cen...
AI summary The discussion revolves around the appropriate pricing for interruptible customers, with differing opinions on whether to use a marginal energy cost of approximately three to three and a half cents. The witness suggests an alternative approach involving discounts or credits based on the nature of the interruptibility agreement.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. CAMPBELL 2794 of load shifting, whether it's none, or a lot. there I agree that I'm making an assumption in my testimony, that that the rates themselves are cost effective; that is, the efficiency gains a...
AI summary Dr. Chamberlin discusses the cost-effectiveness of load shifting and efficiency gains, noting that increased off-peak usage can be beneficial and may offset meter costs. He also comments on the use of cost/benefit analysis in evaluating reconciliation methods, arguing against its use in this context.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. CAMPBELL 2795 - to produce that electricity off peak, everybody benefits from it. The cost/benefit method doesn't address that. It says it's across, when in fact,\nit's above. - Q. You identify Mr. Bowman...
AI summary The discussion centers on the method of setting time-of-use rates, with a focus on whether customer charge methods or adjustments to peak and off-peak pricing better address cost/benefit considerations. The speaker critiques the customer charge method for potentially making time-of-use rates unpalatable due to high charges and suggests alternative approaches.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. CAMPBELL 2797 use rate, and still want to adopt the principal of getting marginal costs reflected in the prices for marginal usage, for as many customers as possible. Suppose that's what you do. If small...
AI summary Dr. Chamberlin discusses the concept of declining block rate structures as a method to reflect marginal costs in pricing for electricity usage. He explains that smaller customers, who tend to consume more during peak times, would be charged higher rates than larger customers who consume more during off-peak times, making declining block rates an efficient pricing mechanism.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. CAMPBELL 2803 - 1 2 3 difference in load factor in the third block, would that tend to support a declining block price structure? - 4 5 6 7 8 A. Well, just looking at it, it would tend to support a it wou...
AI summary Dr. Chamberlin discusses the potential impact of load factor differences on block pricing structures, suggesting that a non-seasonal rate structure might be flat or slightly U-shaped. He expresses concern about the lack of sufficient cost-based justification for the proposed block rate structure.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. HARRIS 2814 being suggested to us that if there's any alignment of rates to take place, it should be with the kind of rates that might be expected to prevail in a competitive marketplace. And my understan...
AI summary The discussion centers on aligning rates with marginal cost for efficient price signaling, even in the absence of immediate competition. The expert agrees that aligning rates with marginal cost encourages optimal customer and societal resource use.
DR. CHAMBERLIN But certainly my experience has been customers look at and respond to the on-peak price. Well, it certainly makes sense. This is sort of a 0. very general question in my mind when it comes to producing developing new rates,...
AI summary Dr. Chamberlin discusses the role of utilities and regulators in developing time-of-use rates, emphasizing the utility's expertise in rate design and questioning whether regulators should prescribe rates or provide general guidance.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. HARRIS 2839 - Part of that is unbundling of services and unbundling of costs and prices. - Mr. Kehoe, or someone, mentioned revenue cost ratio 3 0. 4 targets that this Board had used, and I quess you've 5...
AI summary The discussion centers on the use of revenue cost ratio targets by regulators to ensure fairness in customer rates, with the witness confirming that this approach is widely used in the U.S. but not in jurisdictions transitioning to competitive markets, where cost of service is adjusted based on the PVR index.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. MCMANUS 2845 but that's the way that structure is set up. know. I think the real protection is with something like a price cap. That's why I think PVRs are a useful transition approach. You have to get fr...
AI summary Dr. Chamberlin discusses the importance of price caps and PVRs as a transition mechanism from a cost-of-service model to a competitive market, emphasizing the need to prevent price increases for customers during the transition. He also addresses concerns about potential 'milking operations' and asserts that a competitive market would prevent such issues.
DR. CHAMBERLIN, CROSS-EXAM. BY MR. ROBERTSON 2847 - raising the off-peak? - 2 A. Yes. I think what's important is I wouldn't be - 3 lowering the winter peak below the cost. - 4 O. No. - 5 A. I would be reducing it below the revenue reconci...
AI summary The discussion centers on the utility's role in developing flexible pricing protocols and the need for mechanisms to ensure accuracy in pricing strategies. There is a suggestion that the utility should approach the Board with a plan to transition into a competitive market and that shareholders may need to share costs if rates are set below cost.
5 DR. CHAMBERLIN I'd be sceptical. I mean, there are some other issues that confound it principally being that the declining block rate itself is by definition non time differentiated.
AI summary Dr. Chamberlin expresses skepticism about the declining block rate structure, pointing out that it is inherently non-time differentiated, which may lead to inefficiencies or misaligned incentives.
Efficient Block Rate Structures: Rethinking Con~entional Wisdom The supposed inefficiency of declining block rates is greatly exaggerated. In fact, evidence shows that rates that vary significantly from the cost of service - e.g., as they...
AI summary This text challenges the conventional view that declining block rates are inefficient, arguing that significant deviations from cost-based rates can harm economic efficiency. It introduces John Chamberlin and Ken Seiden, experts in utility work and demand-side management, and discusses historical use of declining block rates and their replacement with flat or inverted rate structures due to perceived inequities.
A. Balancing Competing Objectives In choosing a desirable rate structure from the available alternatives, electric utilities and their regulators balance objectives that often compete with one another. The Public Utility Regulatory Policie...
AI summary The text discusses the balancing of competing objectives in setting electricity rates, referencing the Public Utility Regulatory Policies Act (PURPA) of 1978. It outlines PURPA’s three objectives: energy conservation, efficiency, and equitable rates. It also explains inverted block rate structures and PURPA’s stance on declining block tariffs, emphasizing efficiency and cost considerations.
B. Economic Efficiency and the Inverse Elasticity Rule Given the desirability of marginal cost pricing to meet the goal of economic efficiency, how should regulators and utilities design rate structures when prices set equal to marginal co...
AI summary This section discusses economic efficiency and the inverse elasticity rule in the context of rate design. It explores challenges in achieving marginal cost pricing and presents second-best solutions such as the equal proportions rule and the inverse elasticity rule, which aim to balance revenue requirements with allocative efficiency.
C. Variations in Class Marginal Costs Unfortunately, users of the inverse elasticity rule have some times focused more on differences in elasticities than on differences in marginal costs.12 When marginal costs vary among customer groups w...
AI summary The text discusses the inverse elasticity rule and its application in pricing when marginal costs vary among customer groups within a rate class. It explains that the rule does not always result in the less elastic group receiving a higher price and introduces a more general rule for block tariffs based on marginal costs and price elasticity.
II. Marginal Costs, Rate Design, and Conservation Our primary conclusion from this analysis is this: Economic effi- -)ncy cannot be promoted by the de- · sign of rate structures which deviate significantly from cost. If larger users are le...
AI summary The text argues that economic efficiency cannot be promoted by rate structures that deviate significantly from cost. Inverted block rate structures worsen efficiency by overcharging large users and undercharging small ones. Declining block rates in winter may promote conservation, efficiency, and equity, particularly for residential customers with electric heat.
Endnotes: 1. Fla. Pub. Serv. Comm., Docket No. 830465-El, July, 1984. 2. Bracewell & Patterson, Survey of U.S. Jurisdictions with Inverted Block Rates (prepared for British Columbia Hydro, May 1991) . · .. . ·3: I£ ' ... - 4. Time-of-use (...
AI summary The text discusses rate structures, particularly the preference for time-of-use (TOU) pricing over block rates for large users due to cost-effectiveness, while block rates may be better for small commercial and residential classes. It references various economic theories and regulatory policies related to pricing and taxation.
What Does this Mean for Future Utility Planning? First and foremost, to meet competition head on, a utility must decide what business it wants to be in. To thrive in a competitive market, it must understand its customers' business objectiv...
AI summary To thrive in a competitive market, utilities must become more customer-driven, understand customer needs, and differentiate their products and services. Traditional Integrated Resource Planning (IRP) may no longer be relevant as consumers choose suppliers based on value, requiring utilities to adapt their strategies.
RESPONSE TO INFORMATION REQUEST TO: SEMPRA ATLANTIC GAS INC. FROM: NSPI Response IR-5: (1) No. The 20% referred to in Mr. Whalen's evidence refers to percentage of customer load, and not to the number of customers. It has been used for ill...
AI summary NSPI responds to an information request regarding customer load retention, clarifying that the 20% and 10% figures mentioned are illustrative and not based on specific scenarios. No firm proposals for alternate supply options have been presented, and load retention rates would be determined on a case-by-case basis.
1. Load Retention Tariffs Do you currently ofter, or are you planning to offer, a Load Retention Tariff? If yes, could you please describe briefly what process your company uses to evaluate applications for this rate? Was an independent th...
AI summary The question asks whether a Load Retention Tariff is currently offered or planned, and if so, how applications are evaluated and whether an independent third party is involved in the process.
3. Real Time Pricing. Does your company currently have any RTP tariffs in effect or are you planning to implement such pricing in the near future? If any of the information requested above is available on your web site please provide the w...
AI summary Nova Scotia Power Inc. is being asked whether it currently has Real Time Pricing (RTP) tariffs in effect or plans to implement them soon. The request is part of a regulatory proceeding under the Public Utilities Act, involving a Load Retention Rate application.
Table Sempra IR-7 A Stephen F. Hiebsch Manager, Market Solutions OG&E Electric Services PO Box 321, MIC 300 321 N. Harvey Oklahoma City, OK 73101-0321 Stephen Houle Vice President TXU Business Services 1601 Bryan St., 32nd FL Dallas, TX 75...
AI summary The document lists various individuals from utility companies and regulatory affairs, associated with positions related to market solutions, rate research, and regulatory compliance. It also references an application by Nova Scotia Power Incorporated for approval of a Load Retention Rate under the Public Utilities Act.
NOV A SCOTIA UTILITY AND REVIEW BOARD IN THE MATTER OF: The Public Utilities Act, R.S.N.S., 1989, c.380 as amended IN THE MATTER OF: An Application by Nova Scotia Power Incorporated for approval of a Load Retention Rate
AI summary This document pertains to an application by Nova Scotia Power Incorporated for approval of a Load Retention Rate under the Public Utilities Act. The proceeding involves regulatory approval for a rate that aims to retain load, likely related to energy efficiency or demand-side management initiatives.
RESPONSE TO INFORMATION REQUEST TO: SEMPRA ATLANTIC GAS INC. FROM: NSPI Question IR-14: Attachment "A", paragraphs 10 and 11, Application by Nova Scotia Power Inc. for a Load Retention Rate. NSPI proposes to compare and assess the impact o...
AI summary NSPI is responding to a request for information regarding marginal costs related to a Load Retention Rate. The response refers to a prior UARB interrogatory and confirms that the cost of capital is considered in determining the net benefit of offering the Load Retention Rate.
77877Book of Authorities of Nova Scotia Power Inc.
30 passages
Discrimination, § 39 — Rates — Customer classes — Cost allocation. [OR.] In determining fair and reasonable rates for utility service the commissioner has broad discretion in allocating costs among customer classes; however, the classifica...
AI summary The text outlines legal standards for determining fair and reasonable utility rates, emphasizing that cost allocation among customer classes must avoid unjust discrimination. It specifies that discounts must be based on reasonable criteria and benefit other customers by maximizing fixed cost contributions, while permissible customer classification factors include volume of use and end use.
INTRODUCTION These proceedings were bf{?ught about by energy surpluses, poor economic conditions in the region, federal regulatory changes that have increased competition in the energy industry, and improved customer ability to switch fuel...
AI summary The proceedings were initiated due to energy surpluses, economic challenges, and increased competition from federal regulatory changes, making it harder for utilities to sell services at full tariff rates. Losing customers affects fixed costs and may require rate increases for others. Regulated utilities cannot offer tailored pricing like unregulated suppliers, as they must provide uniform service and rates. The Commissioner must develop new classification criteria to identify discretionary customers and ensure fairness.
OREGON PUBLIC UTILITY COMMISSIONER Volume of use also affects the effectiveness of discounting as a mechanism for improving contribution to fixed costs. The cost of administrating a discounting program is smaller on a perdollar-of-extra-co...
AI summary The text discusses how customer classification based on end use is permissible under ORS 757.230(1), but raises concerns about using third-party impacts or energy policy goals for classification. It also addresses the necessity of a willing buyer for energy sales and factors influencing customer decisions, such as fuel prices and alternative uses of resources.
Past Usage ,. l j The purpose of a discount for "incremental" usage is to reduce excess capacity by encouraging individual customers to consume more than they consumed in the past. The question is whether a customer's past consumption shou...
AI summary The text discusses the issue with the base/incremental approach to energy pricing, using an example of two lumber mills to illustrate how this method can lead to unfair rate differences. The poorly managed mill receives a discount on its incremental usage after a recession, while the well-managed mill does not, despite both receiving similar service.
RATE FLEXIBILJIT The combination of circumstances that gave rise to these proceedings has created a need for rates that focus on smaller groups of customers. Some of the parties desire the ability for individual customers to negotiate rate...
AI summary The text discusses the concept of rate flexibility, particularly the 'zone of reasonableness' for negotiating rates with individual customers. It highlights three legal challenges under ORS 757.205, 757.325, and the Commissioner's duty to ensure rates are 'just and reasonable'. The discussion emphasizes the need for regulatory oversight while allowing flexibility in certain circumstances.
POTENTIAL BENEFITS The incentive rate will only apply to additional loads of 2000 KW or greater. It provides for a reduction to the normal demand charge but the energy charge is unchanged. There is no additional cost to NB Power for additi...
AI summary The incentive rate applies to additional loads of 2000 KW or greater, reducing demand charges without affecting energy charges. NB Power notes that fixed generation costs remain unchanged, and potential revenue may be lower due to 'free-riders' who would have increased demand anyway. However, the Board acknowledges the potential for increased industrial demand with the incentive rate.
TIME PERIOD NB Fower proposed that the incentive rate be applicable for a five year period, from April 1, 1993 to March 31, 1998. The Corporation provided a forecast of surplus capacity for the five years. The surplus is estimated at 377 M...
AI summary NB Power proposed a five-year incentive rate period from 1993 to 1998, supported by surplus capacity forecasts. The Board expressed concerns about the long-term commitment due to uncertainties in demand forecasting but accepted the five-year period as nearly the minimum acceptable for industry response.
A.i\tfOUNT NB Powe= proposed to accept customers for the i~centive rate on a first corne, first served, basis to a waximum of 100 MW in the aggregate. This was based on the current load and resource analysis which NB Power stated would be...
AI summary NB Power proposed a first-come, first-served incentive rate with a 100 MW cap, based on current load and resource analysis. The Board agrees with this approach and supports explicitly stating the cap in the tariff for clarity and communication.
OIBER The LPU re ested the Board to di=~ct NB ?ower to us~ normalized revenue in its cost of service studies should the aoard approve the incentive =ate application. The L?U stated that to do othe:r,dse would result in a potential det::-i....
AI summary The LPU requested the Board to direct NB Power to use normalized revenue in cost of service studies if the incentive rate application is approved, citing potential negative impacts on the large industrial class. NB Power recommended expanding the incentive rate to include customers of two wholesale systems, which the Board agreed to, approving the amended proposal page.
CONCLUSIONS The Board directs NB Power to amend Page RSP N-9(a) to clearly state that the incentive rate is only available to a maximum of 100 MW in the aggregate and to file the amended page with the Board for approval. The Board will, up...
AI summary The Board has directed NB Power to amend a specific page to limit an incentive rate to 100 MW and denied Consumers Power Company's application for a new rate. The decision includes provisions for potential future orders and outlines the appeal process.
Re Gulf States Utilities Company Docket No. 7309 — Tex PUC Bull — Texas Public Utility Commission May 13, 1987 OPINION and order approving experimental tariff rider offering rate discounts to large-volume electric customers with capacity f...
AI summary The Texas Public Utility Commission approved an experimental 'SUS' tariff rider offering rate discounts to large-volume electric customers with the capacity to install cogeneration facilities. The rider included a below-cost energy component reflecting hypothetical fuel costs and did not violate Rule 23.23(b)(2)(c) as it was not a cost-based mechanism for passing through fuel costs.
900,000 as a consequence of industrial load lost to cogeneration. GSU takes the position that any revenue reduction attributable to Schedule SUS is preferable to the permanent loss of industrial load. If Schedule SUS is approved, GSU will...
AI summary GSU argues that implementing Schedule SUS will lead to revenue reductions due to industrial load lost to cogeneration, but asserts that any losses will be borne by stockholders, not ratepayers. GSU has requested expedited consideration of the Schedule SUS filing to avoid further load loss.
Ill. Description of Schedule SUS GSU proposes to offer Schedule SUS on an experimental basis, limiting the period in which a customer can subscribe to the offering to a one year period following the approval date of the rider. Any LPS or L...
AI summary GSU proposes Schedule SUS as an experimental rate for qualifying LPS or LIS customers with a minimum process steam requirement. The rate requires a service agreement amendment and a three to ten-year commitment. Customers may revert to standard rates with twelve months' notice or pay the difference in billing otherwise.
IV. Discussion of Contested Issues The Commission staff supports the need for GSU to implement an incentive rate designed to prevent the loss of GSU's industrial load to cogeneration. However, the staff has not endorsed Schedule SUS due to...
AI summary The Commission staff supports GSU's incentive rate to prevent loss of industrial load to cogeneration but does not endorse Schedule SUS due to concerns of anti-competitive or discriminatory application. Technical modifications are recommended if legal concerns are not a barrier.
SUS, and so long as the Schedule SUS rate reasonably approximates the cost of cogenerating electricity, the examiner believes that any preference or advantage conferred by Schedule SUS is justifiable. The Commission recently addressed the...
AI summary The text discusses the reasonableness of Schedule SUS and its potential to confer a justifiable advantage if it reasonably approximates the cost of cogenerating electricity. It references a past decision by the Commission regarding an economic recovery rider (ERR) and outlines conditions under which such a rider may be considered reasonable. Testimony from GSU and staff witnesses supports the need to maintain industrial load.
B. Technical lssut.s With respect to the technical aspects of the filing, staff witness Harold Hughes has recommended that the Commission make five specific modifications to Schedule SUS, each of which is opposed by GSU. The recommendation...
AI summary Staff witness Harold Hughes recommends five modifications to Schedule SUS, which are opposed by GSU. The recommendations include adjusting heat rate schedules, removing Schedule B rates, eliminating the sizing factor, adding a minimum demand requirement, and excluding customers with demand below 10 MW from Schedule SUS rates.
chargeable to power data upon which Mr. Hughes relied in making his calculations provide separate tables for use, assuming unfired boilers or supplemental firing, respectively. Indeed, a review of the tables in question reflects that, assu...
AI summary The document discusses the calculation of heat rates for power generation, focusing on the use of supplemental firing versus unfired boilers. Mr. Hamilton testified that supplemental firing is more economical for customers with high steam demand, while Mr. Hughes initially relied on data assuming unfired boilers. The examiner concluded that the evidence supports CSU's proposed heat rates in Schedule SUS.
3. Sizing Factor [iii] Mr. Hughes has recommended that the sizing faaor concept incorporated within Schedule SUS be rejected on the basis that it does not produce a fair representation of how a cogenerator would operate. In Mr. Hughes' vie...
AI summary The document discusses the sizing factor in Schedule SUS, with Mr. Hughes arguing for its rejection due to operational inefficiencies at low loads, GSU opposing the change, and CSU supporting the current sizing factor. The examiner concludes that the current sizing factor is reasonable and prefers retaining it over significant restructuring.
4. Minimum Demand [iv) Mr. Hughes has recommended that - "a minimum demand should be set in the tariff to qualify for the SUS rate" based upon his belief that a cogencrator would not operate its cogencration facility when the cogencrator's...
AI summary Mr. Hughes recommends setting a minimum demand in the tariff to qualify for the SUS rate, based on the belief that a cogenerator would not operate below 75% of its rated capacity. However, the examiner does not support this proposal, preferring the sizing factor proposed by GSU over a fixed size surrogate unit.
5. Minimum Load Requirement According to Mr. Hughes, there are sharply changing economics of sea.le for cogencration units of between 1 MW and 10 MW in size. Within this range, as the size of the unit dccrcases, the installation costs per...
AI summary Mr. Hughes argues that Schedule SUS does not accurately reflect the changing economics of cogeneration units between 1 MW and 10 MW due to only two rate bands for smaller loads. He suggests that Schedule SUS should not be offered to customers with demand below 10 MW. However, the examiner agrees with his economic analysis but does not support his recommendation.
ans predictable at this time, it appears that GSU's pursuit of this filing on an expedited basis to minimize the potential for load loss to cogeneration in the near term is a prudent course of action. OPC asserts that GSU may be proposing...
AI summary GSU is filing on an expedited basis to avoid load loss from cogeneration. OPC argues this is a political tactic to reduce opposition to including River Bend costs in GSU's rates, but the examiner finds no evidence to support this. OPC also claims the filing is discriminatory under PURA Section 38 due to unequal rate structures for industrial customers.
e first twelve months following approval of the rate. 17. A qualifying customer must execute an amendment to ilS existing service agreement with CSU as a precondition to subscription to Schedule SUS. - 18. The service agreement amendment r...
AI summary The document outlines the conditions and rate structure for Schedule SUS, including service agreement amendments, rate calculations based on cogeneration facilities, and the use of sizing factors to determine optimal facility sizes for customers.
PUBLIC COUNSEL'S STATEMENT OF POSITION NOW COMES the Office of Public Utility Counsel (DPC) and files this Statement of Position in lieu of testimony and briefs which would have otherwise been submitted but for the fact that OPC was effect...
AI summary The Office of Public Utility Counsel (OPC) files a Statement of Position, highlighting concerns about GSU's rate case and the potential impact of River Bend and Cajun buyback on cogeneration costs. OPC argues that GSU's inefficient generation costs and the Commission's handling of these issues may affect the need for the SUS tariff and criticizes any political use of tariff creation.
Re Iowa Public Service Company Docket No. RPU-88-3 (TF-88-24) Iowa Utilities Board May 17, 1988 OPINION and order authorizing electric tariff containing discounted rates for customer engaged in farm equipment manufacturing upon agreement t...
AI summary The Iowa Utilities Board authorized a discounted electric rate for a farm equipment manufacturing customer who agreed not to install cogeneration or self-generation facilities. The decision was based on the belief that the discount would encourage continued use of the utility's services, preserving system load and helping recover fixed costs.
rom IPS's other customers. If the proposed rate does create a disadvantage to IPS's other customers, it is not an unreasonable disadvantage since they will not have to pay this additional revenue. The Board will approve the proposed rate....
AI summary The Board approves IPS's proposed rate but imposes conditions, including offering discounted rates to certain customers and adjusting revenue calculations to absorb discount costs. Fifty percent of any revenue increase will be used to reduce rates for all customers, while the remaining fifty percent may be retained by IPS.
Re Northern Indiana Public Service Company __ l I Cause No. 38365 Indiana Utility Regulatory Commission January 20, 1988 ORDER permitting an electric utility to offer rate discounts to industrial customer, who agree to defer construction o...
AI summary The Indiana Utility Regulatory Commission permitted an electric utility to offer rate discounts to industrial customers who agree to defer construction of cogeneration facilities for five years and purchase all their power from the utility during that period. The decision found the arrangement not unreasonably discriminatory and consistent with PURPA and state law.
B. Donnelley Contract. Petitioner also requests approval of the proposed electric service contract to be entered into between Petitioner and Donnelley (Exhibit B to Petitioner's 1-A). Petitioner states that this is the standard form of con...
AI summary The Petitioner seeks approval for a new electric service contract with Donnelley, which includes billing credits in exchange for deferred installation of electrical generating equipment and an initial payment. The contract includes specific terms for billing credits, payment conditions, and options for renegotiating energy delivery after the five-year period.
er with the thermal load would be eligible for service under Rider GA and the other would not, even though the electrical load profiles, and therefore the costs of service, were identical for the two. Within the statutory framework concern...
AI summary The text discusses the statutory framework for discriminawry rates, noting that customers may be charged different rates under different conditions. It references Indiana statutes and case law that provide guidance on rate discrimination and the Commission's authority to classify customers based on various factors.
DISCUSSION [I, 2) AP&L and Mid-America support approval of the Agreement. As a result of the August 19, 1988, amendment to the Agreement, the Staff now recommends approval of the Agreement. Also as a result of the amendment, AEEC, the othe...
AI summary AP&L and Mid-America support the approval of an agreement, which would allow Mid-America to reduce its electricity purchases from AP&L through co-generation. The Commission must determine if the agreement is just and reasonable. Experts testified that co-generation is a viable alternative for Mid-America, which currently does not generate its own electricity.
Re Diamond State Telephone Company Docket No. 86-20 Phase IA Order No. 2970 Delaware Public Service Commission August 16, 1988 PETITION by local exchange telephone carrier for approval of a range of equity returns under an "incentive regul...
AI summary The Delaware Public Service Commission rejected a petition by a local exchange telephone carrier for an 'incentive regulation' proposal and instead implemented a 'rate stability' plan. The Commission has the authority to impose penalties or rewards based on equity returns, and excessive returns do not automatically render rates unreasonable.