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Maryland

Comments filed on Draft Maryland Retail Supplier Load Shaping RFP

In late March, we posted about the Maryland Public Service Commission’s request for comments on a draft “Retail Supplier Load Shaping RFP” in the Public Conference 44 proceeding. In early April, comments were filed by the Maryland Energy Administration, the Retail Energy Supply Association, Direct Energy Services, Inc., Staff of the Maryland Public Service Commission, Baltimore Gas and Electric Company/Potomac Electric Power Company/Delmarva Power & Light Company, the Maryland Office of People’s Counsel, and CleanChoice Energy, Inc.

Parties encouraged the Commission to adopt an RFP process to maximize supplier participation, protect trade secrets, provide suppliers flexibility in their load shaping pilot proposals, and allow expanded billing options to enable suppliers to bring innovative proposals to the table. Some parties specifically pointed to supplier consolidated billing and on-bill financing as important tools to pair with supplier time-of-use electricity supply offerings within the pilot. Commenting suppliers noted some key improvements to the RFP structure as compared to a prior retail supplier time-of-use pilot design. However, suppliers also recommended that the Commission add options for marketing support for the retail supplier load shaping pilot offering to help get the word out about the program and encourage customer participation.

Additional recommendations addressed promoting use of renewable energy, access to historical usage data, expanded opportunities for net metering customers, and modifications to other program criteria. Suppliers also raised concerns about certain requirements that may discourage some suppliers from submitting bids to participate in the pilot program. The Office of People’s Counsel commented on the importance of minimizing the costs to both participating and non-participating consumers, ensuring adequate consumer protections, incentives structures, billing, and other issues. All of the comments were filed on April 9, 2019, and as of this post, we are waiting for further action from the Commission in response to the comments.

If you have questions or would like more information about Maryland Retail Supplier Load Shaping RFP or other regulatory issues, please contact Eric Wallace or any of our mid-Atlantic energy lawyers.

Maryland PSC Requests Comments on New RFP for Retail Suppliers

The Maryland Public Service Commission issued a Notice of Opportunity to Comment seeking comments on a new “Retail Supplier Load Shaping RFP.” The Commission want to consider “programs designed to demonstrate the ability to shape residential load profiles using innovative business models.” Comments on the RFP, a copy of which is attached to the Notice, are due April 9, 2019.

The RFP states that:

“The primary goal of this RFP is to identify pilots that demonstrate an ability to shape customer load profiles through load shifting, peak shaving, and energy efficiency. Applicants can propose any mechanism for load shaping such as sending appropriate price signals (real time rates), using technology to control usage (controllable thermostats), payment of rebates or behavioral modification treatments. A secondary goal is to test whether load shaping can lower customer bills or reduce the customers’ overall effective rate for electricity by avoiding energy usage during high cost periods. Customer satisfaction will be surveyed at the pilot’s conclusion.”

There’s some background here. In early 2017, the Commission established Public Conference 44 with various working groups. Three working groups involved areas where the retail supply market could be improved or could expand to provide additional services to Maryland customers. One of those working groups involved rate design issues and sought to develop TOU pilot programs. The Commission approved TOU programs for the utilities, which are now being marketed to customers. The Commission also approved an RFP to establish retail supplier programs. However, and the Commission in November 2018 issued a letter order holding that the bids received were not compliant and directed the utilities to reject them.

The Commission has now proposed changes to the prior RFP and has issued the current Notice to elicit more involvement from retail suppliers in a rate design program. The Commission seems determined to engage the retail supplier community in this effort, stating that, “[a]s Maryland moves forward with grid modernization, the retail supply community can play an important role in supporting policy goals, including more active efforts to shape load profiles.”

If you have questions or would like more information about community solar projects or other regulatory issues, contact Brian Greene or any of our mid-Atlantic energy lawyers.

MD PSC Approves Modified Electric Vehicle Portfolio

electric car iconThe Maryland Public Service Commission issued an order on January 14, 2019, approving Electric Vehicle (“EV”) Portfolio Programs for Maryland’s electric distribution utilities. The EV Portfolio Programs aim to increase EV usage in Maryland by expanding EV tariff options, furthering utility investment in EV charging infrastructure, and offering customer programs for EV owners.

The Proposed EV Portfolio Programs:

Case No. 9478 kicked off with a petition filed on January 22, 2018, by the Public Conference 44 Electric Vehicle Work Group Leader, with the support of the utilities and several other stakeholders, to implement a statewide electric vehicle proposal. The proposals for each participating utility are summarized below:

Baltimore Gas and Electric: BGE’s proposed program included installation of 18,455 EV chargers, costing $48.1 million. For residential customers, BGE proposed $9.7 million in rebate programs that could be pared with BGE’s existing “Whole-House Time-of-Use Rate” for customers with EV chargers. BGE also proposed $14.1 million in rebates and incentives, as well as a “Demand Charge Credit” program, for non-residential customers who install EV chargers for fleet use. In addition to these customer programs, BGE proposed a public network of 1,000 EV chargers, costing $17 million, and a grant program for 490 EV chargers, costing another $7.2 million.

Pepco and Delmarva: Pepco and Delmarva proposed similar programs, including a combined 3,038 EV chargers costing $41.9 million. The Pepco and Delmarva proposals also included residential rebate programs, off-peak charging credits, and expansion of Pepco’s “Whole-House Time-of-Use Rate” to Delmarva. The price tag for the Pepco and Delmarva residential programs was $5 million. For non-residential customers, Pepco and Delmarva proposed rebate and incentive programs for EV chargers, a demand charge credit program, for a combined cost of $10 million. Pepco and Delmarva also proposed installing 608 public EV chargers, costing $16.9 million. Pepco and Delmarva proposed $6.9 million in additional rebate and grant programs for installation of EV chargers. The proposed “DC Fast Charging with Energy Storage” demonstration project is aimed at minimizing adverse grid impacts from installation of fast charging stations, for another $2.8 million.

Potomac Edison: Potomac Edison also proposed rebates, incentives, public chargers, and EV tariffs, with a total of 2,259 EV chargers costing over $12.3 million.

The utilities proposed ratepayer financing for the $104.7 million investment in new infrastructure charging portfolios, meaning customers will pay for these programs through electric distribution rates or customer surcharges over a five year period. However, there are other state and local incentive programs available that may offset some of the costs for the new chargers. Some of the costs would also be recovered from charging customers that use public or non-residential chargers. As discussed below, the Commission did not approve these programs as proposed, reducing the program size and the cost to Maryland ratepayers.

The Commission’s Decision (Order No. 88997):

In its order, the Commission reduced the BGE and Potomac Edison residential rebate programs to a total of 1,000 each. The Commission also limited the rebate to $300 (compared to the proposed $500 rebate). The Commission approved the proposed Pepco and Delmarva residential rebate offerings. The Commission also approved continuation and expansion of utility “Whole-House Time-of-Use Rate” offerings for residential customers. Regarding the non-residential customer proposals, the Commission limited its approval to rebates and incentives for EV chargers installed at multi-unit or multi-tenant dwellings. The Commission also approved a limited number of rate-payer funded public charging stations: 500 for BGE, 100 for Delmarva, 250 for Pepco, and the full 59 proposed by Potomac Edison. The Commission rejected the proposed $14 million in innovation rebate and grant programs, as well as the proposed Pepco and Delmarva demonstration projects. The Commission also directed all the utilities to recover costs through traditional ratemaking in a future rate case (as proposed by BGE, Delmarva, and Pepco), rather than Potomac Edison’s upfront customer surcharge.

The next step is for the utilities to develop and submit tariff proposals to implement the EV programs approved by the Commission.

If you have any questions about the Maryland Public Service Commission’s decision on the Statewide Electric Vehicle Program or other regulatory issues, contact Eric Wallace or any of our mid-Atlantic energy lawyers.

Continued Progress for Community Solar in Maryland

Maryland’s Community Solar Pilot Program is moving along with dozens of solar facilities in the project queues for Baltimore Gas and Electric CompanyPepco MDDelmarva Power MD, and Potomac Edison Company. The first year of the program has seen strong interest from the Subscriber Organizations that develop and manage the solar facilities. Under the program, customers subscribe to a portion of the output of the community solar facilities, which are called Community Solar Energy Generating Systems.

Many of the solar projects entered the utilities’ production queues last summer, so they will be reaching the operational deadline under the program rules in the next few weeks, unless they request an additional six months. Several Subscriber Organizations have recently filed requests with the Maryland Public Service Commission for extensions, citing permitting delays, program delays, and other implementation challenges.

The program is a great opportunity for electricity customers – including low- and moderate income residents – to access solar energy, particularly those that rent or do not have the ability to install their own solar panels. Under the pilot program, if a community solar facility is located within your utility’s service territory, even if it is across town, you can enroll with a Subscriber Organization and purchase a portion of the energy produced by your community solar system. While subscribed to a solar facility, customers receive a bill credit each month for energy generated by the solar system. Offers from Subscriber Organizations include discounts off the utility’s standard electric rates from around 5%-10%.

Customers won’t actually get their household energy directly from solar panels, but their payments will help finance solar facilities that place electricity onto the grid. So far, the Commission has approved six projects across Maryland and we anticipate that more will be approved within the next few years. Statewide, the General Assembly authorized bout 200 MWs to be built under the pilot program which could power about 40,000 households.

As with any new program, some implementation challenges are to be expected as the program gets off the ground. However, we are optimistic that Maryland’s Community Solar Pilot Program will be a success, enabling more and more customers are able to access solar energy.

If you would like more information about the program’s background, we have been tracking the Maryland’s Community Solar Pilot Program since its inception and the development of the program regulations back in April of 2016 (check out our previous post here). We also did a video about Community Solar in the mid-Atlantic region last Spring.

If you have questions or would like more information about community solar projects or other regulatory issues, contact Eric Wallace or any of our mid-Atlantic energy lawyers.

What’s the Latest on Supplier Consolidated Billing?

transmission towers for electricityWe have blogged previously about a petition filed at the Maryland Public Service Commission by five electric and natural gas retail suppliers seeking implementation of supplier consolidated billing (SCB). We did a video about it when the petition was filed, and our last blog on this topic was in February 2018, just after the legislative-style hearing concluded in Baltimore.

In the blog, you’ll see that we summarized the events at the hearing and even provided a picture of the four supplier witnesses testifying before the Commission, along with Brian Greene of our firm, so that everyone could get a feel for what it’s like to appear before the Commission (from the view of the Commissioners, no less!).

So what happened in the case since then, you ask?

In May 2018, the Commission issued this Notice of Briefing Schedule, requesting comments primarily on the legal issue of whether Maryland statutes allow a supplier utilizing SCB to initiate the disconnect process if the customer does not pay. Parties, including the petitioners, submitted comments on June 14 and June 28. We are now awaiting a Commission order or further guidance.

There’s also an SCB proceeding pending at the Pennsylvania Commission. On June 14, 2018, the Commission held a legislative-style hearing that will continue on July 12, 2018. You can get more info on the Pennsylvania proceeding here.  Delaware is also moving towards an SCB proceeding, with a recent Hearing Examiner’s report in Docket No. 15-1693 recommending approval of a Stipulated Order that calls for a new docket to be opened now to address whether SCB is permitted in and should be adopted in Delaware.

If you have questions about SCB or electric or natural gas retail service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Update on Supplier Consolidated Billing in Maryland

Maryland State House (side)

Maryland State House (side) (Photo credit: Wikipedia)

Last fall, Brian Greene discussed the Maryland Public Service Commission’s retail energy supplier consolidated billing proceeding. The Commission is considering supplier consolidated billing as an additional billing option for Maryland customers, alongside the existing utility consolidated billing and dual billing options. With supplier consolidated billing, customers would receive a single bill from their competitive retail supplier that includes both the electricity and natural gas supply charges (from the competitive supplier) and the utility’s transportation and distribution charges.

Under the existing billing paradigm in Maryland, the vast majority of customers receive a consolidated bill from their utility that includes both the energy supply charges and the utility’s transportation and distribution charges. Supplier consolidated billing would flip that model, enabling the competitive supplier to bill the customer, with the flexibility to expand product and service offerings. More information on the details of the proposal are available in the Petition and Reply Comments filed by the petitioning retail energy suppliers (NRG Energy, Inc., Interstate Gas Supply, Inc., Just Energy Group, Inc., Direct Energy Services, LLC, and ENGIE Resources, LLC).

In November 2017, stakeholders submitted extensive comments discussing the benefits and potential risks associated with the supplier consolidated billing proposal. Copies of the comments are publicly available in the Commission’s docket for Case No. 9461.

Following submission of the written comments, the Commission held a legislative-style hearing on February 20th and 21st. Here is a short summary of the two-day hearing:

  • The hearing began with a presentation from the Petitioners in support of supplier consolidated billing. The panel presented and answered questions from the Commissioner for about 2.5 hours.
  • Maryland’s distribution utility stakeholders followed the Petitioners, presenting their views on SCB and responding to the Petitioners’ presentation.
  • Following the utilities, a competitive retail energy supplier panel offered support for SCB, with some offering tweaks to the proposed program.
  • The next panel included public sector stakeholders from the Maryland Energy Administration and Montgomery County offering support for the proposed supplier consolidated billing program and suggestions regarding some of the program details. The Maryland Office of People’s Counsel also presented, discussing what it perceives as potential risks of the program.
  • Commission Staff rounded out the presentations, discussing the merits of the SCB proposal, offering support for the concept and at least one recommendation to alter the proposal.
  • The hearing concluded with the Petitioners offering a few final comments responding to some of the points raised by other stakeholders during the hearing.

After concluding the hearing, the next step is for the Commission to take further action on the proposal. If you are interested in the pending SCB petition in Maryland or any related competitive retail energy market issues, please contact one of GreeneHurlocker’s mid-Atlantic energy lawyers.

Appearing at the MPSC Hearing: From L to R – Brian Greene, Mike Starck (NRG Energy), Duncan Stiles (Just Energy), Tami Wilson (IGS Energy), and Alex Donaho (Direct Energy).

Retail Suppliers Petition MD Commission for Supplier Consolidated Billing

Earlier this month, five competitive retail suppliers (NRG Energy, Inc., Interstate Gas Supply, Inc., Just Energy Group, Inc., Direct Energy Services, LLC, and ENGIE Resources LLC) filed a petition electricity controlswith the Maryland Public Service Commission to implement supplier consolidated billing. If approved, the petition would allow retail suppliers to directly bill customers for both retail generation supply charges and utility distribution charges. Utility consolidated billing (where the utility bills customers for both the utility’s charges and the supplier’s charges) has been in the norm since Maryland restructured its energy market to enable retail competition.

The Maryland petition seeks to flip that model on its head. According to the petitioners, the supplier consolidated billing (“SCB”) model is a significant step in the evolution of competitive retail energy markets. In Texas, where SCB has been the standard for many years, suppliers have more flexibility to inform customers about their energy usage, develop innovative products and service structures, and adapt their customers’ bills to accommodate changes in the market. With SCB in place in Maryland, suppliers will be able to introduce new products and services that are not possible under the current utility billing model. As examples, suppliers will be able to offer flat billing options – where customers pay a set amount each month no matter how much energy they use or when they use it – and prepay service options – where customers pay in advance for their energy usage and then the energy they use counts against their account balance, with regular updates on the funds in their account and no surprise bills at the end of the month. In addition to these billing options, suppliers will be able to better inform customers about their usage and offer other energy-related products and services to Maryland customers.

Here are some quick points addressed in the SCB petition:

  • Supplier Qualifications – Suppliers must meet specific experience, operations, and financial security requirements to offer SCB services.
  • Receivables – Suppliers must purchase the full value of the utility’s receivables (for utility distribution charges) and take on responsibility for billing those amounts through to the customer.
  • Disconnect for Non-Payment – Currently, when a customer does not pay their utility bill, they will eventually have their service disconnected. With SCB, the same result would occur – with all existing customer safeguards remaining – but the supplier would initiate disconnects by notifying the utility that no payment has been received. From there, the utility would utilize existing disconnect procedures, including notifications to the customer. According to the petition, it is imperative that suppliers offering SCB services have the same tools at their disposal as to the utilities to manage their bad debt and encourage timely collections.

The Commission issued a Notice on September 15th requesting comments on the petition by November 15, 2017. If you are interested in learning more about the Maryland SCB petition or other issues affecting competitive retail energy markets in Maryland and other Mid-Atlantic jurisdictions, please contact GreeneHurlocker’s energy lawyers and regulatory attorneys.

Maryland Public Service Commission Rejects Utilities’ Proposals

Proposals Would Drive Up Costs for Competitive Retail Energy Suppliers and their Customerstransmission towers for electricity

Good news for Maryland’s competitive energy suppliers and their customers. In the past few weeks, the Maryland Public Service Commission issued two Letter Orders rejecting requests by BGEPepco, and Delmarva Power to include in the Purchase of Receivables programs costs incurred to comply with the recent RM54 proceeding. In other words, they wanted to recover those costs from competitive retail suppliers. Under the utilities’ proposals, costs to implement certain market enhancements – including 3-business-day accelerated switching – would have been recovered through the discount rate applied when the utility purchases supplier receivables.

There were slight differences to the utilities’ arguments. BGE argued that its current tariff allowed for recover through the POR rates of RM54-related costs. The Commission agreed with the Retail Energy Supply Association that BGE’s tariff does not allow BGE to recover these costs through POR discount rates. Pepco and Delmarva had sought to modify their respective tariffs to include language allowing for recovery. The Commission said no.  Also, in each case, the Commission stated that it “does not believe that it would be appropriate to force suppliers and their retail customers to bear the costs associated with the implementation of a program that benefits all ratepayers, as well as the competitive market as a whole.” Instead, the utilities can seek cost recovery through a base rate case.

RESA scored another win on a second issue in the case when the Commission rejected BGE’s proposed exclusion of revenues from late payment charges (“LPCs”) in the POR discount rate, effectively reducing the amount BGE pays suppliers for receivables purchased through the POR program. In a powerful rebuke to BGE’s proposal, the Commission explained that for “the past six years the Commission has consistently approved the inclusion of the LPCs in the discount rate calculation.  Similarly, the Commission has consistently denied any request for exclusion of these charges. The Commission reaffirms the reasons previously given for requiring the inclusion of LPCs in the calculation, declines to make the significant policy change being requested by BGE, and denies the Company’s request that LPCs be omitted from its POR discount rate.” This is a great result for RESA, the competitive retail energy supply markets in Maryland, and Maryland energy consumers.

Brian Greene, managing member of GreeneHurlocker, PLC represented RESA in this matter as referenced in the Commission’s Letter Order. The lawyers of GreeneHurlocker are pleased to be able to report this good news from Maryland and look forward to continuing to serve our clients in Maryland and the other jurisdictions where they operate. If you have questions about the details of this Commission Letter Order or any other matters involving regulated industries, please contact one of GreeneHurlocker’s regulatory attorneys.

Maryland Commission Approves 380 MW of Offshore Wind

offshore wind projectOn May 11th, the Maryland Public Service Commission approved two offshore wind projects, totaling 380 megawatts of wind capacity. Development of these offshore wind facilities is expected to create almost 9,700 new jobs. In the introduction to the order approving the projects, the Commission explains the significant environmental and economic benefits of offshore wind, positioning Maryland “to become a national leader in the burgeoning offshore wind industry.” The Commission’s order even quotes Governor Larry Hogan’s proclamation from his 2017 State of the Union Address: “Maryland is truly Open for Business.” The two developers approved to move forward with offshore wind development are U.S. Wind, Inc., and Skipjack Offshore Energy, LLC.

The Commission’s order establishes the Offshore Wind Renewable Energy Credit (OREC) price – a levelized price of $131.93 (in 2012 dollars), subject to a 1.0% price escalator. Starting in 2021, Maryland will include ORECs in its Renewable Portfolio Standard (RPS). This means that a portion of every unit of electricity purchased in Maryland will be backed by offshore wind. The Commission’s order (at Table 2) specifies that the offshore wind component of the Maryland RPS will begin at 1.37% in 2021, decreasing to 0.60% in 2042.

This is an exciting development for the renewable energy industry in our region and we look forward to continued and expanding opportunities for companies competing in the energy industry and the customers they serve.

If you would like more information about offshore wind in Maryland or other related opportunities, please contact one of GreeneHurlocker’s energy and regulated industries lawyers.

Future of Maryland’s Energy and Distribution System

transmission towers for electricityThe Maryland Public Service Commission’s Public Conference 44 proceeding is now well underway. The purpose of this proceeding is for the Commission to seek input on the best ways to transform Maryland’s electric distribution system, advancing customer-centered, affordable, reliable, and environmentally-sustainable electric service. Stakeholder workgroups are meeting to develop proposals for the Commissions six different topic areas:

  1. Rate Design;
  2. Electric Vehicles;
  3. Competitive Markets and Customer Choice;
  4. Interconnection Process;
  5. Energy Storage; and
  6. Distribution System Planning.

We are working with retail energy clients and industry stakeholders to help develop time-of-use pilot programs, competitive retail energy options for electric vehicle owners, and utilize the more sophisticated meter data available through recently deployed smart meters. In the next few months, stakeholders will also begin meeting to develop proposals for enhancements to Maryland’s competitive retail energy markets.

We are excited to see where this proceeding will go and what new opportunities for Maryland businesses and energy consumers will result. If you are interested in learning more about Maryland’s PC44 proceeding or other developments in Maryland’s energy industry, please contact one of GreeneHurlocker’s energy and regulatory attorneys for more information.