Electric Restructuring — Formal Case No.945,
Chronology of Events
Background
Per Order
No. 10720, the District of Columbia Public Service Commission
initiated Formal Case No. 945 in 1995 to investigate whether opening
the retail electricity market to competition would be in the public
interest.
Pilot Customer Choice Programs
Per Order
Nos. 11576 (issued December 31, 1999) and 11796
(issued September 18, 2000), effective January 1, 2001, all residential
and commercial electricity customers in the District of Columbia
have been able to choose an alternative electricity generation and
transmission supplier, while PEPCO continues to be the sole distribution
company. PEPCO also continues to be responsible for all emergencies.
In the new era, PEPCO's services are split into two components --
production (generation) and transmission on the one hand and delivery
(distribution) on the other -- with the generation and transmission
portions open to competition. While consumers are able to select
their electric generation and transmission supplier, PEPCO is still
the sole deliverer of power to homes and businesses. The generation
and transmission suppliers include PEPCO and other certified suppliers
who meet technical and operational standards set by the Commission.
Meanwhile, the Commission continues to oversee electric service
in D.C. and assure reliability and quality of service to all customers.
Consumers
who do not choose an alternative electricity supplier for generation
and transmission service continue to receive such service from PEPCO.
To decide whether to select a generation and transmission supplier,
consumers should take the time to carefully address the following
questions:
(1) What prices, terms and conditions are offered by the suppliers?
(2) Do the suppliers use renewable energy sources?
(3) What are the billing and payment options offered by the new suppliers?
The Commission
has devised Energy Savings tables and a calculator to assist residential
and small commercial consumers in deciding whether to switch their
generation and transmission services from PEPCO to another company.
As the
new competitive marketplace evolves, the Commission continues to
play an active role in ensuring that customers and the environment
are protected. The Commission oversees the transition to competition
and continues to regulate service provided by the utility, ensuring
the electric generation and transmission suppliers meet the Commission's
requirements for serving D.C. customers and working with other relevant
agencies to carry out outreach and education programs to help consumers
make informed choices.
Price-to-Compare Information
On September
19, 2001, the Commission issued Order
No. 12186 which identified the price-to-compare information
to be posted on the Commission's website. In this order, the Commission
adopted tables, which calculate the impact of switching to alternative
electric suppliers for their generation and transmission service.
OPC, industry participants, and suppliers, as appropriate, are encouraged
to establish hyperlinks to the price-to-compare information on the
Commission's website. Rates and other information provided by suppliers
for inclusion and subsequent posting on www.dcpsc.org should be
forwarded to the Commission within three days of the stated posting
date to ensure the accuracy of the posted information.
Status of Retail Competition
As of January 2008, three alternative generation and transmission
suppliers, Pepco Energy Services (PES), Washington Gas Energy Services
(WGES), and Horizon Power and Light are serving the District’s
residential sector. Thirteen alternative generation and transmission
suppliers are serving non-residential customers. They are: PES,
WGES, BGE Homes, Constellation NewEnergy, Reliant Energy Solutions
East, Hess, Consolidated Edison Solutions, Sempra Energy Solutions,
Suez Energy Resources, Horizon Power and Light, Liberty Power, Direct
Energy and Integrys Energy Services, Inc. As of the same date, alternative
suppliers accounted for 0.9 percent of residential customers and
22.6 percent of non-residential customers. As another measure, 1.2
percent of residential MW demand and 80.4 percent of non-residential
MW demand were supplied by the alternative generation and transmission
suppliers. These same suppliers accounted for 1.0 percent of residential
usage (MWH) and 75.6 percent of non-residential usage. Month-by-month
changes can be found on the Commission’s website under Customer
Information/Electric Choice/Status of Electric Retail Competition.
Divestiture of PEPCO's Plants
In 1999, PEPCO filed an application with the Commission, requesting
authority to sell its generating plants and purchased power agreements.
On December 30, 1999, the Commission issued Order
No. 11576, which accepted, with conditions, a non-unanimous
settlement agreement authorizing PEPCO to sell most of its generation
assets (all seven plants except two plants located in D.C.)
As of
January 8, 2001, PEPCO completed the sale of its generation plants.
On December 19, 2000, PEPCO completed the closing on the sale of
the bulk of its electric power plants and other generation assets
to Mirant Corporation for $2.75 billion. PEPCO also transferred
ownership of its two District of Columbia plants (Benning and Buzzard
Point) to a new unregulated subsidiary, Potomac Power Resources,
Inc., and these two plants are operated by Mirant. In December 2000,
PEPCO also signed a four-year contract with Mirant Corporation to
buy back the power its customers need at prices below PEPCO's current
average cost of production. Finally, on January 8, 2001, PEPCO completed
the sale of its 9.7 percent interest in the Conemaugh Generation
Station near Johnstown, Pa. to Allegheny Energy, Inc. and PPL Corporation
for $156 million.
Divestiture
of PEPCO's generation plants has also enabled PEPCO's customers
to not have to pay any stranded costs (costs which are not economical
in the new competitive environment). This certainly reduces customers'
rate burdens.
Electric Rate Reductions and Rate Caps
Order
No. 11576, issued December 30, 1999, also authorized a 7 percent
reduction in PEPCO’s rates for residential customers and a
6.5 percent reduction in rates for commercial customers, to be implemented
in three phases.
The first rate reduction was effective January 1,
2000 and reflected the elimination of the Demand-Side Management
surcharge. This represented a 2 percent rate reduction for residential
customers and a 3.5 percent rate reduction for commercial customers.
The second rate reduction was effective on July 1, 2000, and it
reflected a 1.5 percent across- the- board base rate reduction for
both residential and commercial customers. The third rate reduction
took effect on February 8, 2001. Residential ratepayers received
another 3.5 percent rate reduction and commercial ratepayers received
another 1.5 percent reduction.
The Commission's
December 1999 order also capped total rates after all of the rate
reductions were to be implemented. The caps were to be effective
until February 7, 2007 for low-income Residential Aid Discount (RAD)
customers; for all other residential and commercial customers, rates
were capped for four years (until February 7, 2005).
Based
on the Commission’s Order in the PEPCO/Conectiv Merger case
(F.C. No. 1002), PEPCO’s distribution rates will be capped
at the February 7, 2005 levels for 30 months from February 8, 2005
through August 7, 2007 for non-RAD customers and through August
31, 2009 for RAD customers. On February 8, 2005, the generation
and transmission rate cap for non-RAD customers were lifted. New
Standard Offer Service rates were implemented starting February
8, 2005. The cap on the generation rates for RAD customers will
be lifted on February 8, 2007. After receiving comments, on December
13, 2006, the Commission issued Order No. 14139,
which established the new RAD generation rates effective February
8, 2007.
Divestiture Sharing Credits
On September
19, 2001, in Order
No. 12159, and on October 10, 2001, in Order
No. 12203, the Commission ordered PEPCO to distribute divestiture
sharing credits to customers. Residential customers received $75.39
per household and commercial customers received 0.393 cents per
kWh for the annual usage ending March 31, 2001. The total credits
distributed to customers amounted to $51.85 million.
The Commission
has initiated a second phase of this proceeding to determine whether
additional divestiture proceeds exist and should be shared with
ratepayers. A "Phase II" hearing was held on June 26th
and 27th, 2002.
On November
7, 2002, in Order
No. 12593, the Commission approved the distribution of an additional
$24 million in divestiture sharing credits to residential and business
ratepayers. Thus, as of December 18, 2002, the total amount of divestiture
sharing credits approved by the Commission amounts to $75.85 million,
and each household will have received a total of $80.42 of divestiture
sharing credits by the end of the year.
Generation Procurement Credits
During
the four-year rate cap period from 2001 to 2004, if the costs of
acquiring power for Standard Offer Service (SOS) customers are less
than the unbundled generation rates, the savings will be shared
by PEPCO’s customers and its shareholders through a Generation
Procurement Credit (GPC) on a cents per kWh basis. The GPC is calculated
by taking the difference between the contract payment to Mirant
and the SOS generation revenue (the unbundled generation component
for PEPCO). On August 2, 2002, the Commission issued Order
No. 12452, which approved PEPCO’s proposed GPC rider,
consisting of bill credits totaling $41.6 million. PEPCO began distributing
the GPC to customers on August 15, 2002. On May 20, 2003, the Commission
issued Order
No. 12738, which approved PEPCO’s proposed GPC for the
second application period. This application consists of bill credits
totaling $20 million. On September 13, 2004, the Commission issued
Order
No. 13378 approving PEPCO’s proposed Generation Procurement
Credit Rider filed on April 28, 2004. The approved Rider GPC became
effective with the billing month of October 2004, and will provide
bill credits totaling $11 million to the District’s commercial
customers. The net GPC credit for residential customers was determined
to be zero, since the residential class’s guaranteed rate
reduction exceeded its share of PEPCO’s net generation procurement
margins.
On October
24, 2005, the Commission issued Order
No. 13794, which approved PEPCO’s proposed Generation
Procurement Credit Rider filed on July 12, 2005. The approved GPC
rider became effective with bills rendered on and after November
14, 2005, and will provide bill credits totaling $150,642 to the
District’s commercial customers or $0.00002 per kWh. The net
GPC credit for residential customers was determined to be zero,
since the residential class’s guaranteed rate reduction exceeded
its share of PEPCO’s net generation procurement margins over
the period. PEPCO made a new GPC filing on February 27, 2006 and
amended that filing on March 22, 2006. On June 15, 2006, the Commission
issued Order
No. 13968, which granted conditional approval of PEPCO’s
application and will provide ratepayers with an immediate credit
of $24.3 million. PEPCO made a compliance filing on June 28, 2006.
Based on the compliance filing, the applicable residential GPC is
$0.000358 per kWh and the non-residential GPC is $0.002447 per kWh,
starting with the July 2006 billing month. To date, the Commission
has authorized distribution of $97 million ratepayer credits. In
Order
No. 14143, issued December 15, 2006, the Commission required
PEPCO to address additional questions on the GPC. PEPCO filed a
response on January 17, 2007. On May 24, 2007, the Commission issued
Order
No. 14304 which concluded that all the questions concerning
PEPCO’s March 22, 2006 GPC filing have been answered satisfactorily;
thus, the Commission approved PEPCO’s amended GPC Rider without
condition.
Retail Electric Restructuring Legislation and Working Group
At the
same time that the Commission was adjudicating the divestiture of
PEPCO's plants, the D.C. Council adopted new legislation entitled,
"The Retail Electric Competition and Consumer Protection Act
of 1999." The Commission devoted much of 2000 to implementing
this law. More specifically, the Commission directed the parties
to form a Retail Choice Working Group and 7 sub-working groups to
address many electric restructuring issues, such as: (1) customer
protection; (2) customer education; (3) billing and metering; (4)
supplier licensing/procedures; (5) codes of conduct; (6) technical
implementation; and (7) universal service.
The Working
Group filed a Report with its recommendations to the Commission
on May 23, 2000. Subsequently, comments and reply comments were
filed on consensus issues and non-consensus issues. The Commission
held a legislative hearing on June 30, 2000, to discuss these issues.
The Commission's decision on the Working Group Report was issued
on September 18, 2000 in Order
No. 11796
The Retail
Choice Act gave the Commission until January 1, 2004 to achieve
100 percent retail electricity choice for all customer classes.
However, based on December, 1999 and September 18, 2000 Orders,
the Commission approved the implementation of retail choice programs
for both residential and commercial customers by January 1, 2001.
The September 18, 2000 Order
No. 11796 also established a detailed implementation plan for
retail choice and set up the guidelines, procedures and standards
for consumer protection, certification of suppliers, and Electronic
Data Interchange (EDI).
Electric Rate Unbundling
To facilitate
retail choice and ensure non-discriminatory service, retail rates
had to be unbundled by separating them into generation, transmission,
and distribution functions. Unbundling enables customers to compare
generation and transmission prices among alternative suppliers.
The Commission issued its unbundled rates order (Order
No. 11845) on December 5, 2000 and determined "shopping
credits" or "price to compare".
Licensing Requirements for Alternative Electricity Suppliers
On September
18, 2000, in Order
No. 11796, the Commission adopted interim regulations governing
licensing requirements for alternative generation and transmission
suppliers. On December 18, 2000, the Commission issued Order
No. 11862, which specified additional deposit and bonding standards
for certifying suppliers. The Commission established the same deposit
caps for small commercial and residential customers. Any electricity
supplier applicant that intends to, or that actually does, accept
deposits and/or prepayments from customers must provide a Customer
Payments Bond in an initial amount of $50,000. That amount shall
be periodically adjusted to ensure that it covers the actual amount
of deposits and/or prepayments.
Current List of Certificated Alternative Electricity Suppliers/Aggregators
As of February 25, 2008, the Commission has certificated thirty-four
(34) alternative generation and transmission suppliers/aggregators
as follows:
Constellation NewEnergy, Inc.,
Allegheny Energy Supply Company, LLC,
AOBA Alliance Inc.,
BGE HOME,
Reliant Energy Solutions East, LLC,
Dominion Retail Inc.,
FirstEnergy Services Corp.,
Mid-Atlantic Aggregation Group Indep. Consortium,
PEPCO Energy Services, Inc., d/b/a PEPCO Energy Services,
SmartEnergy,
Washington Energy Consortium,
Washington Gas Energy Services, Inc.
Cook Inlet Power, LP.
Sempra Energy Solutions
Select Energy
Con Edison Solutions
Strategic Energy
EnergyWindow
Amerada Hess
Liberty Power
SUEZ Energy Resources NA, Inc.
BlueStar Energy Services, Inc.
Direct Energy Services
South Jersey Energy
American PowerNet.
Horizon Power and Light, LLC.
World Energy Solutions, Inc.
Gexa Energy District of Columbia, LLC.
Integrys Energy Services, Inc.
Glacial Energy of Washington D.C., Inc.
Ohms Energy Company, LLC
LPB Energy Consulting
MidAmerican Energy Company
Clean Currents, LLC
The Commission
will continue certifying suppliers based on the supplier certification
standards established in the September 18, 2000 and the December
18, 2000 orders.
Public Purpose Programs
On December
29, 2000, the Commission issued Order
No. 11876, which established a Public Benefit Fund - Reliable
Energy Trust Fund (RETF) - to cover Commission-authorized universal
service (low-income), energy efficiency, and renewable resources
programs. Renewable resources include solar, wind, geothermal and
hydroelectric facilities etc. Using these resources to produce electricity
will achieve a clean environment objective.
In July
2003, the Commission authorized the D.C. Energy Office to be the
Reliable Energy Trust Fund Administrator and the Commission approved
the first renewable resource program – the Renewable Electricity
Generation Demonstration Program for D.C.
The Commission
has approved three RETF programs which are currently being implemented:
(a) expansion of a low-income discount program; (b) a low-income
weatherization program; and (c) a renewable resource demonstration
program.
On July
8, 2004, the Commission held a status conference regarding RETF
programs. In this conference, parties offered additional comments
regarding DCEO's proposed long-term program plan filed on August
21, 2003. In response to the Commission’s directives, DCEO
submitted a revised RETF Plan on August 31, 2004. On March 7, 2005,
the Commission issued Order
No. 13475 that approved in part, and denied in part, DCEO’s
revised RETF Plan, which it filed on August 31, 2004.
In Order
No. 13475, the Commission carefully evaluated all of the evidence
pertaining to DCEO’s revised RETF Plan, including available
benefit/cost test results. In the order, the Commission approved
thirteen (13) new programs on a two-year pilot basis. The Commission
also determined that it was appropriate to continue funding the
three (3) existing RETF programs. The newly approved programs address
a number of RETF objectives, including: a) the promotion of renewable
energy; b) increased energy efficiency awareness and public education;
c) energy efficiency assistance to non-profit organizations, public
schools and small businesses; d) increased use of Energy Star appliances
by residential customers; e) new LIHEAP and arrearage assistance
for low-income customers; and f) new appliance and weatherization
programs for low-income customers. The Commission approved a total
annual RETF program budget of approximately $9.5 million and $10.5
million, respectively, for the first and second years of the pilot.
A detailed summary of the recently approved RETF programs and budgets
is provided in Attachment A of Order
No. 13475.
On August 11, 2005, the Commission held roundtable discussions with
the parties regarding prospective new RETF programs. Participants
from DCEO, OPC, PEPCO, EPA, American Council for an Energy Efficient
Economy, Alliance to Save Energy, Energy Programs Consortium, and
Coalition for Nonprofit Housing and Economic Development joined
the discussions on RETF programs with the Commission. On November
1, 2005, the Commission issued Order
No. 13796, which provided general guidance for the Working Group
to develop future programs. The Working Group filed its report on
new programs on March 8, 2006. Parties filed comments and reply
comments in March 2006. The Commission issued Order
No. 13953 on May 31, 2006 which rejected both the Working Group
Report and the Working Group’s proposed RETF programs. In
July, 2006 DCEO requested approval to be reimbursed from the RETF
for its costs to perform the All Ratepayers Test (ART) to ensure
its proposed programs are cost effective. On August 17, 2006, the
Commission issued Order
No. 14021 to invite comments. In November 2006, the Commission
issued Order
No. 14111, which authorized funding for the District’s
Department of the Environment Energy Office (DDOE) to conduct cost-effectiveness
tests for its proposed new energy efficiency programs. The Commission
also invited the Working Group to convene and consider methods by
which RETF program development and implementation might be improved
in the future. On March 26, 2007, PEPCO submitted comments in response
to Order
No. 14111. On March 27, 2007, DDOE submitted comments in response
to Order
No. 14111. DDOE also submitted the ART results for the new programs
proposed in March 2006, including revised program proposals. On
April 13, 2007, OPC filed reply comments to PEPCO and DDOE.
On May
11, 2007, DDOE requested an extension of time to administer ten
(10) of the thirteen (13) RETF pilot programs, approved in Order
No. 13475 until such time as the impact evaluations of the programs
have been conducted, filed, and reviewed by the Commission and interested
stakeholders, and the Commission has issued an Order concerning
the future of the RETF programs. DDOE requested an expedited ruling
on this matter, given that the RETF programs are set to expire at
the end of May. The ten programs included:
B-5: Distributed Generation and Net Metering
C-3: Non-Profit Energy Efficiency Initiative
C-5: Home Energy Rating System ("HERS")
C-10: Institutional Energy Efficiency
C-12: Energy Star Appliance and Lighting Rebates
C-13: Small Business Energy Efficiency
D-1: Low Income Home Energy Assistance Program ("LIHEAP") Extension
D-3: RAD Arrearage Retirement and Education
D-5: Low Income Appliances
D-6: Weatherization Rehabilitation
In Order
No. 14321 (issued May 31, 2007), the Commission granted DDOE’s
motion to temporarily extend the administration of the ten (10)
programs until September 30, 2007. That Order also approved DDOE’s
request for additional funds subject to certain modifications.
On June 20, 2007, DDOE filed its Motion for Extension
of Time to Promote Programs C-1, C-2, C-4, C-6 and to Complete the
Solar Home Project in Program C-4 (“Motion for Additional
Extensions”). Notwithstanding its previous comments and conclusions
in its May 11 motion for extending the administration of ten (10)
RETF programs, DDOE’s Motion for Additional Extensions now
requests the continuation of the awareness and marketing programs
(i.e., C-1, C-2, C-4 and C-6) through September 30, 2007. In addition,
DDOE specifically requested that the Commission permit the C-4 Solar
Home Project to be completed. The Commission granted DDOE’s
motion in Order
No. 14377 , issued July 19, 2007, and temporarily extended DDOE’s authority to administer the C-1/C-2, C-4, and C-6 programs until September 30, 2007.
Also, on June 20, 2007, in Order No. 14341 , the Commission directed DDOE and PEPCO to implement the RAD Arrearages Retirement and Education Program (D-3) and to follow DDOE’s enrollment process. DDOE was authorized to continue this program through September 30, 2007.
On July
26, 2007, the Commission issued Order
No. 14394 which approved the budgets for programs C-5, C-13,
D-5, and D-6. The budgets were approved from the date of the Order
to September 30, 2007. The Commission previously extended DDOE's
authority to administer these programs in Order
No. 14321However, Order
No. 14321 also directed DDOE to file revised budgets for D-5 and D-6, and to review and possibly revise the C-5 and C-13 budgets. DDOE filed revised budgets for these programs on June 12, 2007. The Commission subsequently issued
Order
No. 14359 , on July 6, 2007, which directed DDOE to answer questions regarding the revised program budgets. DDOE submitted its response to Order
No. 14359 on July 11, 2007.
On August 21, 2007, in Order
No. 14547 the Commission approved two new RETF programs-the Affordable Housing Energy Efficient Rebate Program and the Weatherization Rehabilitation and Asset Preservation Program. DDOE's authorization to administer the programs began as of the date of the Order and extends to August 21, 2009, subject to further review.
On August 29, 2007, DDOE filed a motion stating that it required additional funds for the C-12 program. By Order
No. 14576 , issued September 20, 2007, the Commission granted DDOE's Motion to Increase the Budget for the C-12 Program on an expedited basis.
On September 28, 2007, the Commission issued Order
No. 14582 and temporarily extended DDOE's authority to administer the B-4, B-5, C-1/C-2, C-3, C-4, C-5, C-12, C-13, D-1, D-2, D-3, D-4, D-5, and D-6 programs. Programs D-1, D-2, and D-3 were extended until March 31, 2008, while the remaining programs were extended until December 31, 2007. Since no extension was requested for programs C-6 and C-10, those programs ended as of September 30, 2007.
On December 3, 2007, DDOE filed another motion, requesting an extension of eleven (11) RETF programs: including B-4, B-5, C-3, C-5, C-13, D-1, D-2, D-3, D-4, D-5, and D-6. An extension for programs C-1/C-2, C-4, and C-12 was not requested because, according to DDOE's impact evaluation report (submitted on October 15, 2007), these programs were found to be ineffective. On December 27, 2007, the Commission issued
Order
No. 14689 and granted DDOE's Motion for Extension of Eleven RETF Programs until September 30, 2008.
Supplier Coordination Tariff
On February
1, 2001, in Order
No. 11902, the Commission approved a supplier coordination tariff.
The tariff specifies the registration and account maintenance fees
suppliers need to provide to PEPCO for communication and EDI transactions.
Customer Aggregation Program
On February
8, 2001, the Commission approved interim regulations governing customer
aggregation programs in Order
No. 11913. In this order, the Commission specified that "An
Aggregator or Broker must obtain an Electricity Supplier license
from the Commission pursuant to the Interim Application for License
to Supply Electricity or Electric Generation Service to the Public
in the District of Columbia and Order
No. 11862 issued on December 18, 2000 in order to contract with
retail customers as an Aggregator or Broker in D.C." The Commission
will issue a Notice of Proposed Rulemaking (NOPR) to the public,
inviting comment on whether the interim standards should be ultimately
adopted as final regulations.
Municipal Aggregation Program
The 1999
Act permits the Mayor to develop and administer a Municipal Aggregation
Program (MAP). The Act requires the Mayor, in conjunction with the
District of Columbia Public Service Commission, to issue regulations
governing a MAP.
In February
2001, on behalf of the Mayor, the District of Columbia Energy Office
(DCEO) established the District of Columbia Municipal Aggregation
Task Force to explore the creation of a municipal aggregation program.
The Task Force includes entities such as Office of the City Administrator,
DCEO, the Water and Sewer Authority (WASA), Office of the People's
Counsel (OPC), DCPSC, and a few other D.C. government agencies.
On October
24, 2001, the Committee on Consumer and Regulatory Affairs of the
Council of the District of Columbia ("Committee") invited
the members of DC-MAP and other interested parties to participate
in a public hearing to discuss MAP-related issues. At the hearing,
DCEO and OPC explained that it was important for the Committee to
consider amending the current legislation to include an Opt-out
provision for residential customers. At the request of the Council,
on November 30, 2001, the Commission held a legislative-style hearing
to discuss the District's proposed municipal aggregation program
and MAP's method of customer selection (i.e., Opt-out vs. Opt-in).
In the Commission’s budget hearing before the Council
on March 28, 2002, Chairman Cartagena testified that the Commission
continues to be concerned about the adoption of a municipal aggregation
program with an opt-out provision for several reasons. First, the
creation of such a program may have the effect of causing confusion
for consumers who might not know why they have been switched to
another electricity supplier without their permission. Second, the
Commission continues to be apprehensive about the potentially stifling
effect a municipal aggregation program with the opt-out provision
may have on competition. Third, the development of such a program
may create a disincentive for any companies that might consider
bidding for the Standard Offer Service provider role that begins
January 1, 2005 under the 1999 Act. Chairman also indicated that
despite these reservations, however, the Commission is eager to
continue its work with the Office of the Mayor, the District Council,
and the Municipal Aggregation Working Group, as these parties work
to create and implement a viable municipal aggregation program in
the District.
On May
6, 2002, the Commission issued an Order and Report, Order
No. 12399. In this Report, the Commission recommended the following:
Allowing any MAP to be implemented as originally envisioned by the Electric Competition Act, i.e., on an opt-in basis;
Refocusing efforts to develop municipal aggregation by including
as much load from independent government agencies and other willing
parties as can be accumulated; and
Proceeding deliberately to get to market with an RFP to locate an aggregation supplier.
Mayor
Williams announced the issuance of an RFP for the MAP suppliers
on an opt-in basis through a press conference on October 4, 2002.
Recently, the D.C. MAP issued a Request for Technical Proposals
(RTP). On May 6, 2003, a pre-proposal conference was convened. The
due date for the RTP was May 22, 2003. As a result of this solicitation,
no MAP bidders were selected.
DC MAP
initiated its third solicitation in the September 2004. Residential
customers were not included in the solicitation this time. However,
the price bids received only covered the time period until January
2005, thus, no contracts were signed.
D.C.
Government hired SAIC and World Energy to conduct a reverse auction
on December 20, 2004. A winning bidder Select Energy was selected
and a contract was signed as a result of this solicitation.
The D.C.
Government has hired Co-eXprise to conduct a reverse auction in
December 2006. The D.C. Government plans to conduct another auction
for the non-government entities (including residential sector) in
September 2008.
PEPCO/Conectiv Merger
On May
6, 2002, the Commission approved the merger of Potomac Electric
Power Co. and Delaware's Conectiv Inc. in F.C. No. 1002. (Order
No. 12395) The merger was deemed to be in the public interest since
it will benefit the public rather than merely leave it unharmed.
The key benefits include:
(a) PEPCO will contribute $2 million to initiate a small customer smart meter pilot program in D.C..
(b) PEPCO will absorb the RETF surcharge not to exceed $0.00021 per kWh through August 7, 2007; this amounts to approximately $12 million.
(c) PEPCO will not seek recovery in rates of the District's share of merger-related costs.
(d) PEPCO's distribution rates will be capped at the level of February 7, 2005 for 30 months (i.e., from February 8, 2005 through August 7, 2007 for non-RAD customers and through August 31, 2009 for RAD customers.)
(e) PEPCO offered a transmission "deadband" which further protected the customers from significant increase in transmission rates in case PEPCO remains to be the SOS provider after January 1, 2005.
The merger
was also approved by Federal Energy Regulatory Commission, Delaware
and Maryland Public Service Commissions, the Virginia State Corporation
Commission and the New Jersey Public Service Board.
PEPCO
and Conectiv completed their merger on August 1, 2002. A new holding
company, Pepco Holdings, Inc., was formed. The combined company
has five principal operating units:
PEPCO led by William J. Sim, President;
Conectiv Power Delivery led by Joseph M. Rigby, President;
Conectiv Energy led by William H. Spence, President;
Pepco Energy Services led by Dr. Eddie R. Mayberry, President;
and
Potomac Capital Investment Corporation led by John D. McCallum,
President.
The above
executives also are Senior Vice Presidents of PHI. Barbara Graham,
also Senior Vice President, PHI, will head PHI’s Corporate
Services.
On February
9, 2005, a kick-off meeting on smart meter pilot program was held
at the Commission hearing room. Currently, the smart meter pilot
program working group meets at least once a month to discuss all
the implementation related issues.
Fuel Mix and Emission Disclosure
On July
18, 2001, the Commission issued Order
No. 12065, which described the requirements for generation and
transmission suppliers to disclose fuel mix information to customers.
In this order, the Commission decided that, on an interim basis,
individual suppliers that procure electricity through contracts,
which specify the origins of that electricity as being from specified
resources, specified units, or a specified system, must disclose
the fuel mix of the electricity they sell in DC.
On August
12, 2002, the Commission issued Order
No. 12533 which directed the Working Group to submit, for the
Commission’s consideration, proposed interim regulations,
including reporting standards and procedures that will govern the
disclosure of data by suppliers of the fuel mix that is sold in
the District. Moreover, the Order directed the Working Group to
provide recommendations on certain specific issues such as the fuel
mix reporting format, the timeframe for disclosure of fuel mix,
and an implementation plan for reporting. On May 15, 2003, the Working
Group filed a report on fuel mix which proposed interim regulations
and attached an average PJM regional fuel mix. Pursuant to the 1999
Act, on June 30, 2003, the Commission submitted a fuel mix report
to the D.C. Council. In December, 2003, the suppliers submitted
their first fuel mix reports to the Commission. PEPCO and the suppliers
now provide a fuel mix report to the Commission in June and December
of each year.
In 2004, D.C. Councilmember Mendelson introduced Bill 15-872, which
requires the PSC to direct each electricity supplier to disclose
emissions information regarding carbon dioxide, nitrogen oxide,
sulfur dioxide, and any other pollutant that the Commission deems
appropriate, for electricity sold in the District of Columbia. The
Commissioners testified on this bill before the D.C. Council on
September 23, 2004. The Omnibus Utility Amendment Act of 2004 became
effective on April 12, 2005. According to the Act, the Commission
must determine whether it is feasible for the suppliers to disclose
the emission information every six months and may direct suppliers
to provide this information either by rule or by order. On May 19,
2005, the Commission issued Order
No. 13589 that directed all active electricity suppliers to
disclose emissions information semi-annually as required by D.C.
Law. Suppliers are to file this information in June and December
of each year, along with their fuel mix information. The Commission
also submitted a fuel mix report, dated July 1, 2005 to the D.C.
Council, pursuant to the 1999 Act. On February 10, 2006, the Commission
issued Order
No. 13880 which directed several suppliers to file their fuel
mix reports consistent with prior directives of the Commission.
On May 3, 2007, the Commission issued Order
No. 14281, directing certain suppliers to file or re-file their
fuel mix reports consistent with prior directives of the Commission.
Order
No. 14281 also noted that the Commission may pursue certain
action—including suspension or revocation of a license or
imposition of a civil fine up to $10,000 per violation—against
suppliers that do not file as directed.
In response to the fuel mix filings due June 1, 2007, the Commission
issued Order
No. 14351 and 14352
(July 2, 2007) directing certain suppliers to file or re-file their
June fuel mix reports consistent with previous Orders. The Commission
also issued Order
No. 14350 directing BGE Home Products and Services, Inc. to
show cause as to why the Commission should not impose sanctions
for failing to file certain fuel mix reports.
Pursuant
to the 1999 Act, the Commission submitted its fuel mix report to
the D.C. Council on July 2, 2007.
On February 1, 2008, the Commission issued
Order
No. 14717 , granting BGE Home Products and Services, Inc. Motion for Leave to File Amended Response and accepted the Amended Response of BGE home to
Order
No. 14350.
Net Metering
According to the 1999 Act, the Commission may promulgate regulations
regarding net metering. In April 2003, the Commission issued Order
No. 12704 and adopted the carry-over approach as the net metering
method. Under this approach, a customer’s consumption is offset
against the full retail value of the power produced and, as a result,
the customer is billed only for the net energy consumed during the
billing period. The Commission issued an order Order
No. 13501 and final rulemaking on February 10, 2005.
On April 8, 2005, in compliance with Order
No. 13501 and the Net Energy Metering (NEM) rules, PEPCO filed
its proposed NEM tariff rider. In Order
No. 13623, , issued June 24, 2005,the Commission found PEPCO’s
NEM Rider to be deficient and provided further guidance regarding
the standard contract requirements set forth in our rules governing
net energy metering. PEPCO filed a standard contract on July 11,
2005, and comments and reply were filed in July and August, 2005.
On February 23, 2006, the Commission issued Order
No. 13890 which directed PEPCO to file a revised standard contract.
PEPCO made a filing on March 24, 2006. On June 27, 2006, the Commission
issued Order
No. 13980, which conditionally approved PEPCO's standard NEM
contract. PEPCO is directed to file a revised standard NEM contract
On July 25, 2006, PEPCO filed a revised NEM standard contract as
well as proposed tariff changes reflecting contract revisions. Commission
issued a NOPR on October 27, 2006 to invite comments and reply comments
on the proposed tariff revisions.
On January 26, 2007, the Commission approved a revised contract and tariff. The Final Rulemaking was published in the D.C. Register on February 9, 2007. PEPCO also filed a report on Low Voltage Alternating Current issues on February 7, 2007. On June 13, 2007, Ms. Athena K. Angelos filed a complaint with the Commission regarding various aspects of PEPCO's net metering practices and related tariff provisions. On October 18, 2007, the Commission issued
Order
No. 14602 , dismissing Ms. Angelos' complaint. On November 30, 2007, the Commission issued a Notice of Proposed Rulemaking amending the District's Net Energy Metering rules.
Several persons commented on the revised net metering rules. On January 25, 2008, the Commission issued an amended NOPR that was sent to the DC Register for notice and comment. The NOPR was published in D.C. Register on February 8, 2008.
Market Monitoring
On July
31, 2001, in Order
No. 12071, the Commission issued its market monitoring regulations
governing an Interim Monitoring Program and Interim Report Forms.
The Commission found that the market monitoring functions conducted
by the Commission and the Office of the People's Counsel (OPC),
in compliance with Section 112 of the D.C. Council's Retail Electric
Competition Act, should be flexibly designed so as to fulfill current
needs in monitoring potential anticompetitive conduct and conditions,
while recognizing that modifications may be necessary in the future
as the structure of relevant markets become more clearly defined.
Month-by-month data on the status of retail competition in the District
can be found under Customer Information/Electric Choice/Status of
Retail Competition. On the wholesale level, the Commission continues
to work with the PJM Market Monitoring Unit to identify potential
abuses of market power in the PJM market.
New Electric Generation and Transmission Construction Rules
On August 9, 2004, the PSC issued Order
No. 13259, which adopted rules governing the construction of
generation and transmission facilities in the District. The Notice
of Final Rulemaking (NOFR) was published in the D.C. Register on
September 3, 2004. As background, to implement the 1999 Retail Electric
Competition and Consumer Protection Act, the PSC had previously
issued Order
No. 12340, which directed the Retail Competition Working Group
to review the existing rules and suggest any necessary revisions.
The Working Group submitted a number of revisions on April 30, 2002.
Incorporating many of the Working Group’s recommendations,
the Commission drafted revised rules for which comments were requested
in a Notice of Proposed Rulemaking (NOPR) that was issued on December
27, 2002. OPC and PEPCO filed comments in response to the NOPR.
The Notice of Final Rulemaking was issued on September 3, 2004.
Standard Offer Service (SOS) after price caps end on February 7, 2005
The Commission
is required, under the Act, to establish standard offer service
(“SOS”) rules and regulations before January 2, 2004,
and to select a standard offer service provider before July 2, 2004.
On February
21, 2003, the Commission issued Order
No. 12655 to initiate a proceeding Formal Case 1017 to establish
a procedure for selecting a new standard offer service provider,
given that PEPCO’s obligation to serve as the District’s
SOS provider is set to expire by the end of 2004.
In this
order, the Commission directs all interested parties to review the
list of SOS parameters in the order and to file proposed issues
and comments no later than March 20, 2003. Parties filed notice
to intervene, comments and proposed issues prior to May 15. On May
15, 2003, the Commission conducted a pre-hearing conference.
On September
29, 2003, the Commission issued Order No. 12932, releasing proposed retail SOS provisions. Comments were submitted on October 30, 2003 and reply comments were submitted on November 17, 2003. On December 4, 2003, the Commission issued Order No. 13005, releasing proposed wholesale SOS provisions. The comments in response to this order were submitted on December 18, 2003.
On December
31, 2003, the Commission issued Order
No. 13028 which adopted wholesale SOS rules and regulations.
On the same day, the Commission issued Order
No. 13027, a companion order which adopted retail SOS rules
and regulations. In January and February 2004, the Commission received
parties’ comments and reply comments regarding the preferred
process for the implementation of SOS. On March 1, 2004, the Commission
issued Order
No. 13118, which adopts the wholesale Standard Offer Service
model to govern the implementation of SOS in D.C. On the same day,
the Commission also issued Order
No. 13116 which denies the motions for reconsideration and/or
clarification on retail SOS process and issued Order
No. 13117, which discusses the parties’ applications and
motions for reconsideration of Order
No. 13028 regarding the wholesale SOS process.
On June
29, 2004, the Commission issued two orders (Order
No. 13227 and Order
No. 13229) on the parties’ requests for reconsideration
of Order
Nos. 13115, 13118
and 13119.
On July 30, 2004, the Commission adopted RFP documents including Wholesale Full-Requirements Service Agreement, supplier RFP and the associated documents. The bidding RFP was posted on PEPCO's website on August 6, 2004. The Commission selected Boston Pacific as the market monitor for the bidding process. The Commission also issued its SOS administrative charge order (Order
No. 13268) on August 19, 2004. The first round of wholesale bidding will start in September 2004. After three rounds of biddings, the winning bids were selected and new SOS rates were posted on the website on November 29, 2004. These new SOS rates were implemented on February 8, 2005.
On April 18, 2005, in Order
13558, the Commission directed Pepco to notify it of the date
of the post-bid conference for the first round of wholesale bidding.
In addition, interested parties were permitted to file comments
on the Commission's proposed second round of wholesale bidding within
14 days of the post-bid conference and reply comments within 7 days
thereafter. On June 2, 2005, Pepco proposed a new timeline.
Meanwhile, on May 27, 2005, the Commission issued Order
No. 13596, which directed the SOS Working Group to file comments
on eleven issues related to improving the second round of wholesale
bidding. In response, the SOS Working Group filed its report on
the eleven issues on June 16, 2005. Comments were also filed by
parties on June 16-17th and reply comments on June 27, 2005. In
Order
No. 13741, dated August 18, 2005, the Commission accepted in
part and rejected in part the recommendations set forth in the Working
Group's report and directed Pepco to make a compliance filing amending:
(a) the RFP, (b) the Wholesale Full Requirements Service Agreement
(WFRSA), and (c) the Rider SOS of Market Price Service Tariff.
On June 21, 2005, the Commission issued Order
No. 13618, which adopted Pepco's proposed timeline for the second
round of SOS bidding.
On July 29, 2005, the Commission declined OPC's request that Boston
Pacific provide it with a copy of the final report on the first
round of wholesale bidding, but permitted Boston Pacific to voluntarily
provide a redacted report to the OPC.
On September 2, 2005, Pepco made compliance filings pursuant to
Order
No. 13741 and, on September 23, 2005, the Commission issued
Order
No. 13765 which accepted in part and rejected in part Pepco's
compliance filing. In this Order, the Commission directed Pepco
to post its revised WFRSA and RFP consistent with the order on its
website on October 3, 2005. PEPCO posted RFP on its website on October
3, 2005 and a pre-bidding conference was held on November 4, 2005.
In December, 2005 and subsequent months, PEPCO conducted SOS bidding.
After the bidding, PEPCO proposed new SOS rates on March 10, 2006.
Based on March 10 filing, beginning with the June 2006 bills, PEPCO
anticipates that residential customers will see an annual average
increase of 12 percent in their bills (about $8 per month). Small
commercial customers’ bills would increase, on average, by
about 10 percent. The Commission approved PEPCO’s new SOS
rates on March 22, 2006. The new SOS rates became effective June
1, 2006. A post-bid conference was held on June 9, 2006. Parties
filed comments and reply comments in response to Order
No. 13741 in June 2006.
The Commission issued Order
No. 14006 on July 21, 2006. In particular, the Commission established
a two-phased approach addressing improvements to SOS procurement
process for the next solicitation and initiating a proceeding to
review the SOS process and consider the benefits of a portfolio
management approach. With regard to Phase I, the Commission sets
forth issues regarding the 2006-2007 SOS procurement and invites
the SOS Working Group and other interested parties to submit comments
and reply comments regarding those issues. Phase II would discuss
the issues associated with the new proceeding. Parties filed comments
and reply in response to Order
No. 14006. In September, Commission issued Order
No. 14065, which directed the SOS Working Group to revise the
WFRSA and RFP. In addition, this order also directed parties to
discuss options on Residential Aid Discount (RAD) rate increases
in February 2007 as a result of lifting the RAD generation and transmission
price cap. On October 2, 2006, PEPCO posted the RFP on its website.
In October, parties have filed comments and reply on the RAD rate
increases issues. On December 13, 2006, the Commission issued Order
No. 14139, which established the new RAD generation rates effective
February 8, 2007. The Commission also accepted PEPCO’s compliance
filing on January 18, 2007(Order
No. 14171). The third round of SOS bidding was held in December
2006 and January 2007. PEPCO’s new rates were filed on February
22, 2007. Based on this filing, PEPCO anticipated that residential
customers would see an annual average increase of 11.6 percent in
their bills (about $8.50 per month.) On March 1, 2007, the Commission
approved PEPCO’s SOS rates effective June 1, 2007. From July
to December 2007, the Commission issued orders related to PEPCO’s
fourth round of SOS bidding. The issues discussed include timeline,
Renewable Portfolio Standards, RFP and the Wholesale Full Requirement
Service Agreement.
In December 2007 and January 2008, the fourth round of SOS bidding was held. PEPCO's filed revised new rates on February 12, 2008. Since no parties filed any comments, these new rates were approved on February 20, 2008. The new rates will become effective on June 1, 2008.
The New SOS Proceeding - Formal Case No. 1047
On June 8, 2006, OPC filed a Petition to initiate and conduct a
formal investigation into the procurement process for SOS for residential
consumers. After the Commission received comments and reply comments,
the Commission granted OPC’s request to initiate the proceeding
by Order
No. 14006 . In Order
No. 14271 issued on April 26, 2007, the Commission explained
that this new proceeding would address the SOS procurement process
for both residential and commercial customers. The Commission also
designated a series of questions for discussions in this case. In
this order, the Commission invited parties to propose additional
issues and propose a procedural schedule. After reviewing parties’
comments and reply comments, in
Order No. 14338 issued on June 19, 2007, the Commission directs
the SOS Working Group to meet, discuss, and submit a report and
recommendations concerning the SOS issues within approximately 4
months. The Working Group submitted a report in October 2007. On October 29, 2007, the Commission issued
Order No. 14612, requesting comments and reply comments on the Working Group report and other
designated issues. In November and December 2007, the parties filed comments and reply comments.
Renewable Energy Portfolio Standard
On January 19, 2005,
the District of Columbia Council enacted the Renewable Energy Portfolio
Standard Act (“REPS Act”), which established a renewable
energy portfolio standard (“RPS”) through which a minimum
percentage of District electric providers’ supply must be
derived from renewable energy sources beginning January 1, 2007,
with an ultimate goal of 11% by 2022. Examples of renewable energy
sources are: solar energy; wind; qualifying biomass; methane; geothermal;
ocean; fuel cells; hydroelectric power other than pumped storage
generation; and waste-to-energy.
