|Orders on Basic Generation Service|
The Board issued an Order approving the electric utilities' Basic Generation Service (BGS) procurement proposal that addressed how to procure the remaining one-third of the State's BGS-FP (fixed price) and BGS-CIEP (commercial and industrial energy pricing) needs for the period commencing June 1, 2013. The utilities propose to continue to use the descending clock auction process that they have used for a decade. One auction would be conducted for the provision of hourly priced service to BGS-CIEP customers. A separate fixed price auction would be held to procure one-third of service requirements for BGS-FP customers for a three-year period beginning on June 1, 2013. In approving the utilities' proposal the Board stated that it, "believes that the Auction process that was implemented with the 2002 Auction, and which has since been modified to include a BGS-FP and BGS-CIEP Auction, has worked well and has resulted in the best prices possible at the time." As for the other stakeholder proposal to increase the frequency of auctions to improve market-based pricing signals the Board found, "the goal of the BGS procurement process should be to enable smaller commercial and residential customers to benefit from both a stable yet market-based rate for BGS-FP supply over the term of the procurement plan for this service while still allowing these customers the ability to choose alternative providers. The Board believes the use of the staggered three-year rolling procurement process, ensuring price stability, is a policy decision that has value for those customers who continue to receive BGS service from the EDCs." The Board also rejected a proposal to lower the BGS-CIPE threshold below 500 kW.
Subsequently, the utilities filed plans in compliance with the BGS Order, which the Board has also approved.
The full texts of the BGS Order, Utility Compliance Plans, and Compliance Plan Letter Order are available on the NEM Website.