DATE:	June 18, 2009
TO:	Office of Commission Clerk (Cole)
FROM:	Office of Strategic Analysis and Governmental Affairs (Ellis) Office of the General Counsel (Fleming)
RE:	Docket No. 090228-EG – Petition for approval of a pilot small general service price responsive load management program, by Tampa Electric Company.
AGENDA:	06/30/09 – Regular Agenda – Tariff Filing – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Administrative
CRITICAL DATES:			5-Month suspension expires on November 15, 2009
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\SGA\WP\090228.RCM.DOC

 

 Case Background

On April 23, 2009, Tampa Electric Company (TECO) filed a petition requesting approval of a pilot Small General Service Price Responsive Load Management Program (pilot program).  In the pilot program, commercial customers would be provided a smart thermostat, load control relay, and a network communication module.  Customers would then be charged with rates varying by time of use.  The pilot program is meant to collect and evaluate data on customer acceptance, as well as energy and demand savings of this variety of load management program.

The pilot program is similar to TECO’s Residential Price Responsive Load Management Program.[1]  The price period scheduling and rates would be identical, using a four-tier pricing structure.

The Commission has jurisdiction over this matter pursuant to Sections 366.06 and 366.80 through 366.82, Florida Statutes (F.S.).

Discussion of Issues

Issue 1: 

 Should TECO’s pilot Small General Service Price Responsive Load Management program be approved?

Recommendation: 

 Yes.  The Commission should approve TECO’s Petition, and the tariffs needed to implement the proposed pilot program.  Program costs should be capped at $286,000 as part of TECO’s existing Conservation Research & Development Program.  The program should be limited to 50 participants, and expire 18 months from the date of the Commission’s vote.  TECO should also provide a report on its cost-effectiveness to staff upon completion of the program.  (Ellis)

Staff Analysis: 

 On April 23, 2009, TECO filed a petition requesting approval of a pilot Small General Service Price Responsive Load Management Program.  The number of customers able to participate will be limited to 50, with an anticipated duration of approximately 18 months.  Customers who choose to participate in the program will take service under a new tariff, GSVP-1, which is attached.  The pilot program is similar to TECO’s Residential Price Responsive Load Management program.[2]  The new GSVP-1 tariff will initially use the same rates and time elements for a four-tiered structure of pricing tiers that is used in the Residential Price Responsive Load Management program, provided below in Table 1.  These rates would change annually and be adjusted through the Energy Conservation Cost Recovery (ECCR) clause proceedings.

Table 1 - Price Period Scheduling and Pricing (as of May 12, 2009)

* Holidays are considered equivalent to Sat - Sun.

The tariff will provide a multi-tiered rate structure that is designed to work as a price signal and alert participating customers to reduce load and energy consumption during high-cost periods.  Customers will have a smart thermostat, load control relay, and a network communication module installed at no charge.  The customer will then be able to use these devices to control a variety of equipment, including space heating, air conditioning, water heating, and other commercial equipment.  The customer can select to have their equipment automatically turned on or off depending upon price signals, or manually adjust it depending upon business conditions.  Under the pilot program, price signals will consist of electronic notification of four price periods, with each period having a different energy conservation charge.  All other components of the customer’s electrical charges, such as base rates or fuel, are not affected by price period.  Three of these pricing periods will have their schedule set in the tariff, each with increasing cost.  The fourth, and most expensive, will have its timing determined by TECO and function as a load management resource during times of system need without advance notification to the customer.  The fourth pricing period is also restricted to no more than 134 hours annually.

In the case of typical load control programs, the customer receives a monthly credit in exchange for allowing the utility the option to automatically interrupt service.  Under the proposed pilot program, customers will be able to decide when and how to operate equipment in their business based on price.  With an understanding that energy costs increase during periods of higher demand, customers can modify energy use to shift consumption from periods of higher demand and higher prices, to periods of lower demand and reduced prices. 

The pilot is meant to evaluate what type of customer would benefit, and the amount of benefit provided, by this variety of load management program.  At the end of the pilot program, TECO will be able to complete an evaluation of the program’s cost-effectiveness and impact, and may seek to make the program permanent. 

TECO’s expected cost for the 18-month pilot program is estimated at $286,000, based upon previous experience with the Residential Price Responsive Load Management Program.  TECO’s existing Conservation Research and Development Program has a five-year cap of $500,000 and was previously approved by the Commission.[3]  Since 2004, approximately $214,750 has been expended from the Conservation Research and Development Program.  The pilot program’s expenditures of $286,000 would be spread over 18 months, so the five year limit is not expected to be exceeded.  The itemized cost for the pilot program is detailed below in Table 2.

Table 2 - Pilot Program Cost by Category

 

Conclusion

Staff believes that the pilot Small General Service Price Responsive Load Management Program may provide an opportunity to expand TECO’s residential program to its commercial customers.  The pilot program will allow TECO to collect and evaluate data on customer acceptance, as well as energy and demand savings.  Therefore, staff recommends that the Commission approve TECO’s Petition for a pilot Small General Service Price Responsive Load Management Program, and the tariffs needed to implement the proposed pilot program.    Program costs should be capped at $286,000 as part of TECO’s existing Conservation Research & Development Program.  The program should be limited to 50 participants, and expire 18 months from the Commission’s Order.  TECO should also provide a report on its cost-effectiveness to staff upon completion of the program.

Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  If Issue 1 is approved, the tariffs should become effective the date of the Commission’s vote.  If a protest if filed within 21 days of the issuance of the order, the tariffs should remain in effect with any increase held subject to refund pending resolution of the protest.  If no timely protest is filed, the docket should be closed upon the issuance of a consummating order. (Fleming)

Staff Analysis: 

 If Issue 1 is approved, the tariffs should become effective the date of the Commission’s vote.  If a protest if filed within 21 days of the issuance of the order, the tariffs should remain in effect with any increase held subject to refund pending resolution of the protest.  If no timely protest is filed, the docket should be closed upon the issuance of a consummating order.