N-1Report
7 passages
than the prospective test year costs. For the above reasons, the annual unit revenues paid by customers Changes in actual unit short-run marginal costs are subject to different dynamics than those of actual unit average cost of service. In...
AI summary The text examines discrepancies between average cost-based rates and actual costs, noting that short-run marginal cost dynamics differ from average costs. It highlights billing determinant variations and exceptions like FAM AA/BA riders and annually adjusted rates (GRLF, Shore Power) subject to SRMC testing, emphasizing long-term cost variability and rate framework exceptions.
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.
4.3 Residential Time-of-Day Most of the energy usage in this class is consumed during the off-peak period, and the rate is designed to encourage this behaviour. Comparing the average annual unit revenue to the average annual marginal cost...
AI summary The text discusses Residential Time-of-Day (TOD) rates and Time-Varying Pricing (TVP) programs. TOD rates encourage off-peak energy use and passed the SRMC test. TVP includes CPP and TOU tariffs, approved as a pilot in 2021, with MURB TOU approved in 2024. SRMC tests were first conducted in 2022 and 2025 reports. Comparing unit revenues to annual marginal costs is deemed inappropriate for specific time periods.
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 may fail due to extreme fuel price fluctuations or non-cost-based rates from due discrimination. However, such failures may have justifications. If unjustified, rates should be adjusted to pass the test, ensuring alignment with reliability and cost considerations.
Current Supply Elasticity Estimates Supply elasticities, per se, do not exist in a regulated retail electricity market. Prices are set beforehand in a regulatory proceeding, and utilities must supply all retail power demanded at the price...
AI summary In regulated retail electricity markets, supply elasticities do not exist as prices are predetermined, requiring utilities to meet demand at set rates. However, in Western wholesale markets, supply elasticity exists due to competitive generation and transmission constraints. Hydropower availability and fossil fuel costs further influence elasticity, making it weather-dependent and volatile.
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.
CONCLUSION During the transition to the competitive market, changes in the price elasticity of demand and supply are likely to be small. In the longer term, competition may increase the price elasticity of both demand and supply. Existing...
AI summary The transition to a competitive electricity market may increase price elasticity of demand and supply over time, with long-term effects similar to deregulation in other industries. FERC and ISO are expected to reduce transmission constraints, enhancing supply elasticity, though new generation entry will remain gradual due to lead times and risk.
N-2Report - Refiled
4 passages
-0.15 -0.15 - - General Demand 2.78% 5.78% 16.52 9.30 77.7% 2,308.0 -0.15 -0.15 - - General Demand Time of Use On-Peak (Winter) 2.78% 5.78% 29.85 14.05 112.4% 0.3 -0.15 -0.15 - - Off-Peak (Winter) 2.78% 5.78% 17.43 10.96 59.0% 0.8 -0.15 -0...
AI summary The text presents data on demand and pricing across different categories, including General Demand, MURB, and various industrial and municipal sectors, with metrics such as percentages, costs, and usage estimates. It references the Short Run Marginal Cost (SRMC) test and inefficient usage estimates for 2025, based on an average annual marginal cost of 9.048 cents/kWh.
ELECTRICITY SUPPLY ELASTICITIES
AI summary The section discusses electricity supply elasticities, which refer to the responsiveness of electricity supply to changes in price or demand. This is a key consideration in energy planning and regulation, as it affects how the grid can adapt to fluctuations in consumption and generation.
Current Supply Elasticity Estimates Supply elasticities, per se, do not exist in a regulated retail electricity market. Prices are set beforehand in a regulatory proceeding, and utilities must supply all retail power demanded at the price...
AI summary In a regulated retail electricity market, supply elasticities do not exist because utilities must meet all demand at set prices. However, in wholesale markets, supply elasticities are present and influenced by factors like transmission constraints and hydro conditions. Fossil-fueled generation and hydropower play significant roles in determining supply elasticity.
ormance-based rate. Even if the market prices fall below operation and maintenance costs, owners of "must-run" generation may have no incentive to reduce output or to cease operating the power plants. As a result of restructuring, the scop...
AI summary Restructuring the electricity market introduces new markets and financial instruments, which can increase supply elasticities by reducing investor risks. However, due to high capital costs and long lead times, generation supply may remain inelastic. Public pressures and alternative investments like transmission upgrades or energy efficiency may also influence market responses.