Rates Update – September 18, 2015 Jim Ziolkowski, Director, Rates and Regulatory Planning.
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Transcript of Rates Update – September 18, 2015 Jim Ziolkowski, Director, Rates and Regulatory Planning.
Rates Update – September 18, 2015
Jim Ziolkowski, Director, Rates and Regulatory Planning
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Agenda
Overview of ESP Application
SSO Supply and Pricing
Distribution Investment and Other Provisions
Price To Compare
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Overview
On April 2, 2015 the PUCO approved Duke Energy Ohio’s Electric Security Plan for a term of three years that:
Continues the current auction process for procuring supply for non-shopping load;
Addresses rate design issues for Riders RC and RE;
Includes provisions for improving reliability through a more aggressive capital expenditure program;
ESP effective June 1, 2015 through May 31, 2018.
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SSO Supply
Auction follows same format as in previous ESP (i.e., descending clock). Delivery periods and auctions staggered. At least two auctions for each delivery period. Charles River & Associates to manage auction process. Excludes procurement of RECs to comply with renewable energy standards.
Full-requirements, load following for 100% of SSO or non-shopping load.
First set of auctions were held on May 14, 2015.
Continuation of Supplier Cost Reconciliation Rider (Rider SCR) to true-up SSO revenue with SSO supply costs.
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Auction Schedule – June 2015 through May 2018
Duke Energy Ohio, Inc. Competitive Bid Process Schedule
2015 2016 2017 2018Auction Product 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6
Auction 1
12 Month
1
June 2015 thru May 2016
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24 Month June 2015 thru May 2017
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36 Month June 2015 thru May 2018
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Auction 2
24 Month
2 June 2016 thru May 2018
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Auction 3
24 Month
3 June 2016 thru May 2018
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Auction4
12 Month
4 June 2017 thru May 2018
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Auction 5
12 Month
5June 2017 thru May 2018
17 Total #
Tranches 100 100 100
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SSO Pricing
Modified rate design on revenue neutral basis.
Simplified SSO rates and modify to more closely resemble market rates.
Eliminate demand charges for generation under all rate schedules so that all SSO generation rates are “energy-based,” mirroring what competitive retail electric suppliers typically offer shopping customers.
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SSO Pricing Example - Eliminate Rider RC Demand Charges (Rate DS)
These are example rates. Actual Rider RC rates based on May 2015 auctions appear in the Company’s tariff.
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Distribution Service
Distribution Capital Investment Rider (Rider DCI) Rider DCI provides for Duke Energy to implement a reliability improvement program
through more aggressive investment in our distribution system. Recovery of incremental capital spend over amounts currently in rates. Quarterly update filings and subject to annual audit by PUCO Staff. Modeled after similar riders approved for the FirstEnergy operating companies and for
AEP Ohio. Rider DCI will not recover any costs associated with Grid Modernization as long as
such costs are being recovered in a separate rider.
Distribution Storm Recovery Rider (Rider DSR) Tracks storm costs above/below baseline amount from rate case. Cost recovery begins if accumulated “above baseline” exceeds $5 million; otherwise,
factor “above/below baseline” into next rate case.
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Other Provisions
Load Factor Adjustment Rider LFA will continue, but it will be reduced by 33 percent in the first year, 33
percent in the second year, and 34 percent in the third year. Effective June 2015, the credit is $0.013072 per kWh (periodically trued-up).
Large Customer Interruptible Load Program Will continue through the term of the ESP. Costs will continue to be recovered through Rider DR-ECF.
June 2015 –
May 2016 June 2016 – May 2017
June 2017 – May 2018
Tariff Sheet LFA Charge LFA Charge LFA Charge (per kW/kVA) (per kW/kVA) (per kW/kVA) Rate DS,
Service at Secondary Distribution Voltage
All kW $5.36 $2.72 $0.00
Rate DP, Service at Primary Distribution Voltage
All kW $5.36 $2.72 $0.00
Rate TS, Service at Transmission Voltage
All kVA $5.36 $2.72 $0.00
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New Riders
Table 1 – New RidersRider Name Tariff Note
Distribution Capital Improvement Rider Rider DCI Return, depreciation, property taxes on incremental distribution rate base
Distribution Storm Rider Rider DSR Tracks storm costs above or below base amount in last distribution rate case.
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Riders Being Eliminated
Table 2 –Riders Being EliminatedRider Name
TariffNote
Electric Security and Stabilization Rider Rider ESSC Expired on January 1, 2015
Save-A-Watt Rider Rider SAW Replaced by Rider EE/PDR
Save-A-Watt Rider Rate Rider SAW-R Replaced by Rider EE/PDR
Fuel and Reserve Capacity Reconciliation Rider
Rider RECON Discontinued as part of order in Case No. 12-1682-EL-AIR, et al.
Emergency Electrical Procedures for Long Term Fuel Shortages
Rider EEPF Obsolete
PIPP Customer Discount PIPP Customer Discount Expires on May 31, 2015
Energy Efficiency Revolving Loan Program Rider EER Terminated December 31, 2010
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Riders Continuing With Modifications
Table 3 –Riders Continuing with ModificationsRider Name Tariff Note
Retail Capacity Rider Rider RC Eliminate demand charges so that all SSO rates are energy-based
Retail Energy Rider Rider RE Migrate toward uniform rates for all residential customers.
Net Metering Rider Rider NM Adding text that clarifies billing determinants.
Load Factor Adjustment Rider Rider LFA Phase-out beginning June 1, 2015
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Riders Continuing Without Modifications
Table 4 –Riders Continuing with No ModificationsRider Name Tariff Note
Supplier Cost Reconciliation Rider Rider SCR Trues up SSO revenue with invoiced cost from suppliers and recovers auction-related costs.
Base Transmission Rider Rider BTR Recovers non-market based transmission costs
Alternative Energy Recovery Rider Rider AER-R Recovers cost of REC purchases to comply with alternative energy standards
Distribution Decoupling Rider Rider DDR Trues up weather-normalized base distribution revenue for customers not billed based on demand
Uncollectible Expense Riders Rider UE-GEN, UE-D Recovers bad debt charges related to generation and distribution services
SmartGrid Rider Rider DR-IM Recovers incremental costs related to SmartGrid deployment
Regional Transmission Organization Rider Rider RTO Currently zero.
Economic Competitiveness Fund Rider Rider ECF Recovers cost of large customer interruptible program.
Switching Statistics andPrice To Compare
June 2015
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Duke Energy Ohio Switching Statistics – Month Ending June 30, 2015
Residential MWh
Commercial MWh
Industrial MWh
Total MWh
Duke Energy Ohio
272,943 92,534 21,521 392,735
CRES Providers
302,063 468,474 422,027 1,309,358
Total Sales 575,006 561,008 443,548 1,702,093
EDU Share 47.47% 16.49% 4.85% 23.07%
Electric Choice Switch Rate
52.53% 83.51% 95.15% 76.93%
Source: PUCO Summary of Switch Rates from EDUs to CRES Providers in Terms of Sales
Legend
Fully Bypassable
Non-Bypassable
Rider RTO• Various RTO costs
BTR• Base transmission incl.
NITS
Distribution rates and riders
SCR• Supplier Cost
ReconciliationAERR (RECs)• Alternative Energy
Recovery
UE-GENGeneration Uncollectibles
RC and RE• Retail Capacity and
Energy• Derived from auction
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Electric Security Plan Rate Structure
LFA• Load Factor Adjustment
Rider RTO• Various RTO costs
BTR• Base transmission incl.
NITS
Distribution rates and riders
SCR• Supplier Cost
ReconciliationAERR (RECs)• Alternative Energy
Recovery
UE-GENGeneration Uncollectibles
RC and RE• Retail Capacity and
Energy• Derived from auction
DCI• Distribution Capital
Investmt
Current Proposed
DSR• Distribution Storm Rider
LFA• Load Factor Adjustment
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How Do I Calculate My Price to Compare?
Compare:
DE OH’s Rider RC Charge
+ Rider RE Charge
+ Rider SCR Charge
+ Rider AERR Charge
+ Rider RTO Charge
vs.
The CRES Provider’s price for electricity
Note: Price To Compare varies based on load factor
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Price To Compare Calculation
Load Factor 72%Rate DP kWh 518,400
kW 1,000
Rider RC 4,598.76$ Rider RE 26,193.72 Rider SCR 390.36 Rider AERR 185.07 Rider RTO -
Total 31,367.90$
Billing kWh 518,400 Price To Compare (¢ per kWh) 6.0509
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Recommendations
Use twelve months of demand and energy to develop an “average annual price to compare” for the best price comparison
Compare competing offers using the same usage data
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Annual Price To Compare (Example)
Load Price To
kW kWh Factor AERR, RTO, SCR RC, RE Total Compare (¢)
1,000 518,400 72.0% 575.42 30,792.48 31,367.90 6.05
1,240 625,120 70.0% 693.88 37,277.02 37,970.91 6.07
1,450 650,000 62.3% 721.50 39,443.02 40,164.52 6.18
1,850 689,000 51.7% 764.79 43,014.67 43,779.46 6.35
2,200 750,000 47.3% 832.50 47,539.86 48,372.36 6.45
2,850 812,000 39.6% 901.32 53,229.37 54,130.69 6.67
3,458 518,000 20.8% 574.98 39,764.27 40,339.25 7.79
3,512 822,000 32.5% 912.42 56,111.38 57,023.80 6.94
1,888 651,030 47.9% 722.64 41,183.00 41,905.64 6.44
1,450 525,012 50.3% 582.76 32,932.02 33,514.79 6.38
1,100 518,665 65.5% 575.72 31,232.22 31,807.94 6.13
1,098 612,000 77.4% 679.32 36,000.39 36,679.71 5.99
7,691,227 8,537.26 488,519.71 497,056.97 6.46
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Duke Energy Ohio Tariffs
Duke Energy Ohio’s tariffs can be found online at:
www.duke-energy.com
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