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October 7, 2016
NEM Fall Policy Leadership Roundtable

NEM will convene its Fall Leadership Roundtable on October 26-28, 2016, in Austin, Texas. The meeting will take place at the Hyatt Regency Austin at 208 Barton Springs. A Draft Agenda is hotlinked here. Confirmed participants include Robert Hall III, Texas State Senator; Donna Nelson, Chairman, TX PUC; Bill Magness, President and CEO, ERCOT; Pat Wood, III, Principal, Wood3 Resources; Barry Smitherman, Partner, Vinson & Elkins; and Prashant Mupparapu, Senior Managing Director, Macquarie. There are invitations to numerous VIPs outstanding. Please register for the Fall Policy Leadership Roundtable at this hotlink. Reservations at the Hyatt Regency Austin can be made at this hotlink.

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Commission Opens Proceeding on Grid Transformation

The Commission opened a proceeding to review and ensure that electric distribution systems in Maryland are customer-centered, affordable, reliable and environmentally sustainable. In furtherance of that objective, the Commission identified the following issue areas for comment:

"1. Rate Design: exploring time-varying rates for traditional electric service, DERs and EVs and considering pilot programs for driving desired results through performanced-based compensation;
2. Benefits and Costs of DERs: calculating comprehensively the Maryland-specific benefits and costs of solar (and perhaps other DERs) – including specific consideration of solar's geographic and grid location – for potential use in future utility tariffs, with assistance of a consultant paid for by an undetermined portion of the $500,000 pledged by PHI as a result of Case No. 9361;
3. Advanced Metering Infrastructure (AMI): maximizing AMI’s benefits for Maryland ratepayers;
4. Energy Storage: classifying storage properly in Commission rules and policies and valuing it appropriately as a distribution or customer-sited resource;
5. Interconnection Process: implementing rules and policies to promote competitive, efficient and predictable DER markets that maximize customers’ choices;
6. Distribution System Planning: ensuring that utilities’ distribution systems have the capability to handle increased DER penetration and evaluating the appropriate level of utility investment in distribution assets; and
7. Limited-Income Marylanders: assessing the effects of the evolving electric distribution system on Marylanders with limited means."

In addition, the Commission is seeking comments on PHI's June 30, 2016, filing on transformation of the electric grid. Comments are due October 28, 2016. The full text of the Notice is available on the NEM Website, and the PHI Filing is available from NEM headquarters.

New York
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Staff Proposal on CES Implementation

Staff filed a proposal with the Commission recommending that Central Hudson, ConEd, NYSEG, National Grid, RG&E, and O&R file tariff amendments to begin implementation of the Clean Energy Standard (CES). The CES includes a Renewable Energy Standard requirement under which all LSEs are required to serve their retail customers by procuring renewable resources, as evidenced by RECs or alternative compliance payments. The utilities' costs are to be reflected in commodity charges. A Maintenance Tier will continue the existing maintenance under the prior Renewable Portfolio Standard and the costs are to be recovered in delivery charges. The final component of the CES involves support of certain nuclear facilities through the purchase of zero emissions credits. Each LSE that serves end use customers must purchase ZECs proportional to the electric energy load is serves. Utilities will recover ZEC costs through commodity charges.

In view of these obligations, Staff recommends that the utilities make tariff amendments filings as follows: "amend certain tariff leaves to allow for recovery of the cost of Tier 1 compliant RECs, ZECs, and ACPs incurred in compliance with the CES Order, through a volumetric supply charge collected from their retail commodity customers. In addition, Staff proposes that the Commission also direct the Utilities to recover, on a volumetric basis, on all sales (including all NYPA sales), and from all retail delivery customers, the cost of Tier 2 maintenance resources. Lastly, Staff proposes that the Commission direct the Utilities to amend certain tariff leaves to recover the costs that may be incurred by the Utilities in their role as the financial backstop, as delineated in the CES Order. Staff proposes that each tariff specify the mechanisms to be used by each utility to collect these costs through a supply or delivery charge."

The full text of the Staff Proposal is available on the NEM Website.

National Grid Petition for Waiver of Annual Reconciliation of Gas Costs Mechanism

National Grid filed a petition with the Commission requesting that KEDNY be allowed to suspend collection of the annual reconciliation of gas costs surcharge/refund mechanism in its Gas Adjustment Clause (GAC). The utility is requesting this in order to "manage customer bill impacts associated with recovering $43 million of unbilled gas commodity costs set to be recovered through the annual reconciliation beginning January 1, 2017, thereby avoiding a sharp increase in the commodity portion of customers' bills that would coincide with an anticipated increase in base delivery rates." The utility is requesting to suspend the annual reconciliation of gas costs surcharges from January 1, 2017, to be reinstated beginning April 1, 2017. Any gas commodity costs not recovered in 2017 would be recovered in the following year's reconciliation. Without this change, KEDNY customers would see a twelve percent increase in commodity rates. The full text of the National Grid Petition is available on the NEM Website.

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Order on Non-Solar Tier I AEPS Act Compliance Obligations

The Commission issued a Secretarial Letter in July of this year notifying EGSs and EDCs that there was an error in the calculation of non-solar Tier I adjustment obligations for AEPS Act compliance for the past six years. This resulted in a seven percent increase from the otherwise anticipated annual Tier I obligation for 2016 compliance purposes. The Commission subsequently decided to extend the true-up period from September 1, 2016, to November 30, 2016, for the non-solar Tier I adjustment obligations for the 2016 AEPS compliance year. It then issued two options for stakeholder comment, with the view of minimizing the impact on stakeholders while still satisfying the AEPS Act. Upon consideration of the comments, the Commission rejected the proposal by which EDCs would procure the credits to be transferred to all LSEs operating in the EDC distribution zone during the 2016 compliance period, with costs recovered through a non-bypassable charge. Despite the fact that the EGS community, including NEM comments, resoundingly preferred this option, the Commission declined to adopt it because of its "legal, administrative and cost hurdles."

The Commission instead directed that, "The Commission recognizes that EGSs and EDCs could not anticipate the increase in the non solar Tier I credit compliance requirements for the 2016 AEPS Act compliance year due to the past six year historical, although incorrectly calculated, non solar Tier I quarterly adjustments. Furthermore, the Commission also recognizes that the delay in issuing the non solar Tier I quarterly adjustments caused by the transition from one AEC Program Administrator to a new AEC Program Administrator, failed to provide a reasonable opportunity for EGSs and EDCs to acquire the requisite AECs by the September 1, 2016, or November 30, 2016 deadline. Accordingly, the Commission with this Final Order is extending the true up period from November 30, 2016 to May 1, 2017, for the non solar Tier I adjustment obligations relevant to the 2016 AEPS Act compliance year."

The full text of the Order is available on the NEM Website.

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