Energy Aggregation Discrepancies and Questions

  • Added
  • Author:
Two items came up in the discussion of the Energy Aggregation  Plan and Governance that I believe needed more supporting documentation before council proceeded.  First, we finally got a copy of the contract we signed with the consultant and nowhere in that agreement does it address the .005/KWH fee we thought the consultant would receive for their services.  Second, the Plan and Governance tells us every household that participates in the energy aggregation program will pay an additional “stand-by” fee which the city could choose to eliminate.
Last night the subject of energy aggregation was addressed at council and then council voted to send the Plan and Governance to the PUCU.  It is a relatively short discussion and by watching it you will have a better understanding of why I consider council’s action as irresponsible and hope to get your attention so you can get them to reconsider.  The public hearing is found here and the vote follows immediately after.
During the public hearing you can hear Mr. Schommer tell us that our consultant will receive .0005 cents per KWH and they will not receive anything for their services until we implement the program.  However, if you look at the contract that we signed you will not see this anywhere.  There is no limit in that contract or any other provided document on the amount they can add to the final rate they negotiate with the supplier. 
Suppose the best rate available on the Apples to Apples website was .054 cents/KWH and EA was able to negotiate a rate of .045 cents with the supplier.  There is nothing in our contract that prevents the price offered to our residents from being .054 instead of the .0455 we would expect given Mr. Schommer’s comments last night and all previous discussions we have had since EA finally filled out that portion of the bid requirement. 
There also is nothing in our contract that would prevent EA from receiving the .0005/KWH and also receiving a $100,000 signing bonus from the supplier.  There is nothing in our contract that requires them to disclose to the city how much they receive from the supplier. 
An emphatic statement about fees made during a meeting is not a contract.  My position is that council should not have proceeded with any further work until the contract with the consultant was cleaned up. 
The other item had to do with the Standby fee.  In the public hearing, we were told this needs to be in place for that customers that normally generate their own electricity but use our “energy aggregation program” as a backup.  We were told this will allow them to be able to avoid additional fees.  Then the representative gave an example where he used the proposed Medical Marijuana facility.  The problem with this example is commercial customers like the Medical Marijuana facility will not be part of the energy aggregation program.  These kinds of inaccuracies have been presented by this consultant over and over again.  With this kind of record, any responsible member of council would insist on an explanation from independent source when it comes to things that are difficult to understand.  The Standby fee is one of those items.
Our Plan of Governance  under Billing, states specifically that all participants will pay the standby fee.
“Aggregation Participants will be billed by the Utility for stand-by service within the meaning of division (B)(2)(d) of Section 4928.143 of the Revised Code.”
Nothing in the Plan tells us only those that generate their own electricity will pay the standby fee.  I provide (B)(2)(d) of Section 4928.143 of the Revised Code below.  Reading that section does not help us understand that this is just for those customers that generate their own electricity.
Another section of the ORC, the one dealing with Municipal Energy Aggregation programs tells us that instead of requiring residents to pay this fee like the current plan tells us we are going to do, the city can can opt out of making our residents pay it. I provide the text to ORC 4928.20 (J) below also.  This section is complicated and admittedly when I read it there are sections which I would like to be able to discuss with a reliable source before I positively come to a conclusion on what this means.  However, I do not get any sense from reading this section it deals with customers that generate their own electricity.  The sense I get is that most of the words are there to protect Municipal Customers of Energy Aggregation from being over charge or having difficulties when they return to the utility.    
My position is council should have insisted on getting an explanation on this standby fee which matches what is found in the ORC.  What we know right now is that it would make more sense if our plan specifically said we were going to opt out of the standby fee instead of imposing it on every customer. 
(B)(2)(d) of Section 4928.143 of the Revised Code:
(d) Terms, conditions, or charges relating to limitations on customer shopping for retail electric generation service, bypassability, standby, back-up, or supplemental power service, default service, carrying costs, amortization periods, and accounting or deferrals, including future recovery of such deferrals, as would have the effect of stabilizing or providing certainty regarding retail electric service;
ORC 4928.20(J)
(J) On behalf of the customers that are part of a governmental aggregation under this section and by filing written notice with the public utilities commission, the legislative authority that formed or is forming that governmental aggregation may elect not to receive standby service within the meaning of division (B)(2)(d) of section 4928.143 of the Revised Code from an electric distribution utility in whose certified territory the governmental aggregation is located and that operates under an approved electric security plan under that section. Upon the filing of that notice, the electric distribution utility shall not charge any such customer to whom competitive retail electric generation service is provided by another supplier under the governmental aggregation for the standby service. Any such consumer that returns to the utility for competitive retail electric service shall pay the market price of power incurred by the utility to serve that consumer plus any amount attributable to the utility's cost of compliance with the renewable energy resource provisions of section 4928.64 of the Revised Code to serve the consumer. Such market price shall include, but not be limited to, capacity and energy charges; all charges associated with the provision of that power supply through the regional transmission organization, including, but not limited to, transmission, ancillary services, congestion, and settlement and administrative charges; and all other costs incurred by the utility that are associated with the procurement, provision, and administration of that power supply, as such costs may be approved by the commission. The period of time during which the market price and renewable energy resource amount shall be so assessed on the consumer shall be from the time the consumer so returns to the electric distribution utility until the expiration of the electric security plan. However, if that period of time is expected to be more than two years, the commission may reduce the time period to a period of not less than two years.