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Regulatory

Decrease Expected for Purchased Cost Indifference Amount (PCIA) on California Direct Access Electric Customer Bills

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Direct Access customers in California should take note of a change in non-bypassable charges as it directly impacts their electricity costs.

What are Non-Bypassable Charges?
Non-bypassable charges include utility charges that all customers must pay, including transmission and distribution charges.  Direct Access customers must also pay a non-bypassable charge referred to as the Purchased Cost Indifference Amount (PCIA), that is the Direct Access customer’s share of “stranded costs” associated with purchases made by the utility before the customer left utility service.

The PCIA rate paid by customers varies depending on when the customer leaves utility service, referred to…
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Regulatory Changes to Impact Demand Response Compensation in Organized Wholesale Energy Markets

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Customers and aggregators that act as demand response resources in organized wholesale energy markets should take notice of the Federal Energy Regulatory Commission (FERC)’s Order 745, issued on March 15, 2011.  FERC Order 745 directs each organized market operator (ISO) to institute incentive payments for demand response resources that curtail energy consumption during certain hours that would confer a “net benefit” to purchasers of wholesale supply by reducing price volatility during those hours.  

The incentive payment structure provides that demand resources will be paid the prevailing locational marginal price (LMP) at the wholesale market location at which the curtailment…
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AEP Ohio’s New Plan: A 3-Year Transition to Competitive Markets

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Exciting news for those of you in central Ohio. On Sept. 7, AEP Ohio filed a settlement before the Public Utilities Commission of Ohio (PUCO) that will result in a fully competitive market structure for the utility and its service territory.  The transition to a competitive market model will occur over the next three years and contains some near-term benefits for central Ohio businesses and residents. 

The full benefit of the change phases in over time.  A percentage of businesses and residential consumers that switch to a competitive retail supplier will be subject to market-based, lower capacity charges…
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CA Commission Proposes Reforms to Utility Exit Fee Calculation. May Lead to Lower Rates.

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On August 23rd, the California Public Utilities Commission (“CPUC” or “Commission”) issued a Proposed Decision on a recent effort mounted by a broad coalition of customers and retail suppliers. The coalition wants the CPUC to reform the methodology used to determine an Exit Fee (known as the Power Cost Indifference Adjustment or PCIA) customers pay their native utility when they move to Direct Access service.

According to the CPUC, the purpose of the Exit Fee is to ensure that customers that remain with their utility for their electricity service do not absorb additional costs when other customers leave utility…
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Criticism Mounting In Opposition to AEP Ohio’s Rate Increase

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Pictured here is the west side of the Ohio Statehouse, where a House committee is expected to conduct hearings regarding the status of its electricity market in the coming months.

It’s been gratifying the past few days to see important voices weigh in with a critical eye regarding American Electric Power Ohio’s proposed rate increase and the future prospects for electric competition in central Ohio. On Aug. 5, news media reported that the staff of the Public Utilities Commission of Ohio had filed testimony…
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EPA’s Cross State Air Pollution Rule (CSAPR) Rule Will Impact Coal Generators

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In December 2008 federal courts struck down the EPA’s Clean Air Interstate Rule (CAIR) due to flaws in the law.  The courts directed EPA to rewrite the rule; on July 7 EPA released its finalized rule, the Cross State Air Pollution Rule or “Casper” (CSAPR).  

This law will require 27 states to significantly reduce nitrogen oxides (NOx) and sulfur dioxide (SO2) emissions from plants in the eastern half of the United States. This rule is intended to help states reduce ground level ozone and other pollutants. The impact for power markets will be increased costs for running coal fired generation…
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