EQ Research’s Q2 2018 GRC Update

Posted by Miriam on
Share

Highlights:

  • 14 utilities in 10 U.S. states initiated new GRCs in Q2 2018.
  • 17 GRCs concluded in Q2 2018.
  • 39 GRCs were still pending at the close of Q2 2018.
  • GRCs increasingly address DERs, grid modernization, and new rate and pricing options.
  • Regulators in three states meaningfully *reduced* monthly fixed charges in Q2 2018, with key decisions issued in Colorado, Connecticut and New York.
  • Proposed residential fixed-charge increases ranged from 0% to 95% in Q2 2018.

General rate cases — in addition to addressing utility revenue requirements and rate design — have become vehicles for major proposals related to distributed solar, battery storage, EVs and other DERs; grid modernization; performance-based regulation; and new pricing options and opportunities, including TOU rates. The interactive U.S. map below indicates where GRCs were active as of June 30, 2018. Scroll over any U.S. state to find out which utilities in that state have pending GRCs.

Fourteen utilities initiated new GRCs in Q2 2018. Of those that include proposed rate-design revisions, all but one aimed to raise the monthly fixed charge for standard residential service (see Figure 1). Six utilities proposed raising their charge by 50% or more, with one utility — Entergy Texas — seeking to nearly double its charge, from $7.00 to $13.64. The average increase proposed in these new GRCs was just under 40%.

In Pennsylvania, Duquesne Light proposed raising its monthly fixed charge for standard residential service (Rate RS) and small-business customers (Rate GS) by 63%, from $10.00 to $16.25. Duquesne Light also proposed developing a $9.3 million microgrid designed to improve the electrical resilience of metro Pittsburgh, while requiring all new net-metering customers to install a generation meter beginning in 2019. Furthermore, Duquesne proposed an “EV ChargeUp Pilot” designed to evaluate the grid impacts of EVs and inform distribution-system planning. This broad initiative includes an evaluation of EV-charging infrastructure, customer rebates, bill credits for customers who register their EVs with Duquesne, and an EV education and outreach component.

Figure 1: Proposed Residential Fixed-Charge Increases, GRCs Filed in Q2 2018


© 2018 EQ Research LLC

Seventeen GRCs were completed in Q2 2018. Significantly, in 10 of those cases, state regulators did not allow residential fixed-charge increases exceeding 5%, as indicated in Figure 2 below. The average increase approved by regulators in these 17 cases was only 9% (compared to the average proposed increase of 44%).

Significantly, state regulators heavily *reduced* residential fixed charges in three GRCs.

In Colorado, the PUC reduced the residential fixed charge for Black Hills Energy from $16.50 to $8.77, noting that “an increased customer fixed charge has not been shown to outweigh the public interest of allowing customers to control their utility bills and energy efficiency,” while adding that “public policy considerations regarding low-income customers and energy conservation require consideration of the reasonableness of level of fixed charges.” The PUC’s decision also requires BHE to shift to default TOU rates for residential customers, and rejected BHE’s proposed sub-class for net-metering customers, finding that BHE inappropriately dismissed consideration of the benefits provided by net-metering customers with onsite solar generators.

In Connecticut, PURA approved an ultimate residential fixed charge of $9.21 for Eversource Energy, reducing the existing charge of $19.25 by 52%.

In New York, the PSC reduced Central Hudson Gas & Electric’s residential fixed charge from $24.00 to $19.50 over a three-year period. The PSC’s decision also established a Carbon-Reduction Program that aims to efficiently reduce carbon emissions through customer use of “environmentally beneficial electric technologies,” including EVs, while adopting several Earnings Adjustment Mechanisms that incentivize Central Hudson to increase electric system efficiency through peak reduction and DER utilization, and to increase residential customer participation in voluntary TOU rates, among other things. Furthermore, the decision defines a process for establishing new non-wires alternatives projects, and includes battery storage in the definition for “designated technologies” of Central Hudson’s standby service tariff.

On the other hand, Kentucky regulators granted a whopping 144% increase — from $4.50 to $11.00 — to Duke Energy’s residential fixed charge, while reducing the energy (kWh) charge. The PSC also rejected a proposed distribution-system reliability and integrity improvement plan, and ordered Duke Energy to provide detailed billing information to customers, rather than requiring customers to request it.

Figure 2: Existing vs. Proposed vs. Approved Residential Fixed-Charge Increases, GRCs Decided in Q2 2018


© 2018 EQ Research LLC

Figure 3: Existing vs. Proposed vs. Approved Residential Fixed-Charge Increases, GRCs Decided in Q2 2018


© 2018 EQ Research LLC

EQ Research offers a service that summarizes new GRCs initiated by electric utilities. Contact us at info@eq-research.com for more information.