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June 30, 2017
NEM Western Energy Policy Summit

Please mark your calendars and plan to join us for NEM's Western Energy Policy Summit on October 23-25, 2017. The Summit will take place at Caesars Palace in Las Vegas, Nevada. An agenda is forthcoming. You may register at this hotlink.

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Rulemaking Opened on Power Charge Indifference Adjustment

The Commission decided to open a rulemaking to review the current Power Charge Indifference Adjustment (PCIA) methodology and alternatives to the current mechanism. The PCIA is charged to customers leaving utility bundled service for an electric service provider under direct access or to a community choice aggregator. The purpose of the PCIA is to make bundled utility service customers indifferent to customers departing utility service and choosing to shop.

The draft Order Instituting Rulemaking (OIR) identifies guiding principles to be utilizing in the proceeding as follows:

"1. Bundled IOU customers should be neither worse off nor better off as a result of customers departing the IOU for other energy providers (“bundled customer indifference”).
2. Any methodology to ensure bundled customer indifference should be transparent and verifiable, including the most open and easily accessible treatment of input data, while maintaining confidentiality of information that should remain confidential.
3. Any methodology to ensure bundled customer indifference should have reasonably predictable outcomes that promote certainty and stability for all customers within a reasonable planning horizon.
4. Any methodology to ensure bundled customer indifference should be flexible enough to maintain its accuracy and stability if the number of departing customers changes significantly.
5. Any methodology to ensure bundled customer indifference should not create unreasonable obstacles for customers of non-IOU energy providers.
6. Any methodology to ensure bundled customer indifference should be consistent with California energy policy goals and mandates."

The OIR identified the following issues for consideration:

"1. Implementation of SB 350 language discussing bundled customer indifference and protection of departing customers from allocation of costs not incurred on their behalf.
2. Transparency of current PCIA methodology.
a. Information sharing (e.g., load forecast methodology).
b. Publication of IOUs' contract terms to greatest extent permitted without violating confidentiality rules.
c. Non-disclosure agreements for confidential information.
3. Data access for current PCIA methodology.
a. Public online source of information used for PCIA calculation.
b. Revision of rules on access to confidential PCIA input data.12
4. Review and possible modification of current PCIA methodology.
a. Total Portfolio Cost inputs and calculation.
b. Market Price Benchmark.
i. Updating.
ii. Alternative methods.
c. Optimization of IOU portfolio management (e.g., contract extensions and contract renegotiation) to minimize stranded costs.
d. PCIA forecasting and possible cap.
e. Sunset of obligation to pay PCIA.
f. Accuracy of PCIA in assuring bundled customer indifference.
5. Alternatives to PCIA framework.
a. IOUs' Portfolio Allocation Methodology.
b. Portfolio buy-out by CCA/ESP.
c. Assignment of IOUs' contracts to CCA/ESP.
6. Exemptions from PCIA for CARE and Medical Baseline customers.
a. Review and possible revision of exemptions.
b. Consistency of treatment of exemptions among IOUs.
7. Additional considerations and statutory changes relevant to review, revision, and consideration of alternatives to the PCIA."

Comments on the OIR are due twenty days from the date the Rulemaking is issued. The full text of the Draft OIR on the PCIA is available on the NEM Website.

New Jersey
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Utilities File Basic Generation Service Proposal

The electric utilities have submitted their joint Basic Generation Service (BGS) proposal for the period starting June 1, 2018, with the Board. The utilities propose to continue the practice of using a multiple round descending clock auction to procure power for BGS customers. The proposal describes the auction process, including the qualification of bidders, the auction rules, and the roles of the utilities and the Board in the BGS process. The BGS-RSCP (Residential Small Commercial Pricing) auction will procure one-third of the utilities' BGS-RSCP load for the period beginning June 1, 2018. The BGS-RSCP auction will seek offers for the supply of full requirements tranches of each utility's BGS-RCSP load for a three year period. The BGS-CIEP (Commercial and Industrial Energy Pricing) auction will seek offers for the supply of full requirements tranches for each utility's BGS-CIEP load for a one-year term beginning June 1, 2018.

The utilities also filed company-specific addenda setting forth proposals for committed supply, contingency plans, accounting, and other issues.

The Joint and Utility-Specific BGS Filings are available at this link.

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