Finds they exceed Michigan RPS requirements

July 22, 2010 - Weekly Update From Utility Regulatory News #3978: While not discounting the importance of renewable energy in the resource strategies of electric utilities, the Michigan Public Service Commission nevertheless has reduced an electric utility’s jurisdictional renewable power supply cost for rate-making purposes, to reflect the fact that the company had been exceeding the proportion of renewable power needed to meet the state’s renewable portfolio standard (RPS) requirements.

The utility, Wisconsin Electric Power Co. (WEPCO), is headquartered in neighboring Wisconsin but has a multistate presence. It had allocated $5.4 million in renewable power costs to its Michigan services, based in part on Wisconsin’s RPS requirements, which provide that 4.27 percent of retail sales in 2010 and 8.27 percent by 2015 must qualify as renewable energy. However, the commission pointed out that Michigan had adopted a less ambitious RPS program with a lower minimum purchase term, such that the amounts attributed to WEPCO’s Michigan operations were clearly excessive.

According to the commission, WEPCO actually had been acquiring more renewable energy than it needed even for the Wisconsin RPS targets. The commission said it had discovered that for the period 2011 to 2014, WEPCO’s renewable power commitments ranged from 31 percent to 120 percent more than necessary for meeting Wisconsin’s RPS requirements. As a result, the commission reduced WEPCO’s Michigan revenue requirement by more than $4 million to account for the excess purchases. Subscribe to URN for the full story.

Posted: July 22nd, 2010 under energy policy, green energy, regulation, renewable energy credits, renewables.
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Ratepayers to foot most of cost

July 22, 2010 - Weekly Update From Utility Regulatory News #3978: Deeming smart grid technology to be a prudent investment, the Oklahoma Corporation Commission has preapproved up to $366.4 million in program costs for Oklahoma Gas & Electric Co. (OG&E) to construct a smart grid system.

The estimated costs of the program include a $130 million stimulus grant from the federal government. Although ratepayers will be expected to cover $220 million of the costs, OG&E said the smart grid network will save them money at the same time, including more than $20 million in operation and maintenance (O&M) expenses and $8 million in meter reading costs. The utility was authorized to recoup its project costs from customers via a smart grid recovery rider (SGRR) over a 42-month period, the end of which should coincide with the company’s next scheduled rate case in 2013.

To facilitate reconciliation of the SGRR in that 2013 proceeding, the commission ordered that three regulatory assets be established, one as a smart grid O&M account, one as a stranded meter cost account, and one as a Web portal account. Although ratepayers will be funding the program through the SGRR, they also will be credited with any cost savings achieved as a result of consumption reductions, shifts in usage, or other energy efficiencies made in response to information obtained from the new smart meter equipment.

Despite widespread support for smart grid technology, and in spite of assertions that the smart meters to be used have tested 99.98 percent accurate, one commissioner dissented, saying that a more measured approach should have been taken and that any preapproval of costs should have been limited to incremental stages. Subscribe to URN for the full story.

Posted: July 22nd, 2010 under Smart metering, dynamic pricing, efficiency, regulation, smart grid.
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