Case Background
On September 28,
2020, Duke Energy Florida, LLC (DEF or utility) filed a petition for approval
of modifications to its optional FixedBill (FB-1) rate schedule and associated
Tariff Sheet No. 6.391. The FB-1 rate schedule, or tariff, is available to
residential customers and offers participating customers a predetermined
electric bill for 12 months.
DEF is proposing
revisions to its FB-1 rate schedule to implement a pilot program which would
allow the utility to control the heating, ventilation, and air conditioning (HVAC)
thermostats of participating customers taking service on the FB-1 rate schedule,
through December 31, 2021. DEF stated that its goal is to test eligible customers’
willingness to allow DEF to control their thermostats in exchange for a $50
prepaid credit card. The proposed pilot program would be limited to 2,000
participants. The revised Tariff Sheet No. 6.391 is attached to this
recommendation as Attachment A.
At the November
3, 2020 Agenda Conference, the Commission suspended DEF’s revised tariff to
allow staff sufficient time to review the petition and gather all pertinent
data. Staff issued a data request to DEF for which responses were received on
December 16, 2020. On January 6, 2020, staff held an informal meeting with DEF
to obtain additional information and clarifications to DEF’s responses to staff’s
data request. On January 15, 2021, DEF provided staff additional information
related to its FixedBill program. The Commission has jurisdiction over this
matter pursuant to Sections 366.03, 366.04, 366.05, and 366.06, Florida
Statutes (F.S.).
Discussion
of Issues
Issue 1:
Should the Commission approve DEF's modifications to
its FB-1 rate schedule?
Recommendation:
Yes. The Commission should approve DEF’s modifications
to its FB-1 rate schedule effective on the date of the Commission vote. The
proposed revisions will allow DEF to control customers’ thermostats within set
parameters to achieve peak demand reductions. Participating customers benefit by
receiving a $50 prepaid credit card and the general body of ratepayers benefits
by any demand reductions. Staff also recommends that DEF, at the end of the
pilot program, file a report in the docket file on the results of the pilot program.
(Guffey)
Staff Analysis:
Description of Current Optional FB-1 Tariff
The FB-1 rate schedule was first approved in 2017 by
Commission Order No. PSC-2017-0451-AS-EU and
became effective on March 1, 2018. This tariff allows participating customers
to receive a fixed monthly bill for 12 months, which is calculated using the
prior 12-month average usage plus an additional risk and usage adder. The order
approving the FB-1 tariff states that the difference between the calculated
amount customers would have otherwise paid under traditional residential rates and
what customers are actually billed under the FixedBill tariff will be treated
as a below the line revenue or expense, along with any costs to implement and
maintain the program. In 2018, the Commission approved a revision to the
original FB-1 tariff which specified that customers taking service under the
optional Non-Standard Meter Rider (NSMR) tariff may not participate in the
FixedBill Program.
Pursuant to the currently effective FB-1 rate schedule,
customers who voluntarily enroll in the FixedBill program need to enter into a
Service Agreement with DEF for a term of 12 months. The Service Agreement will
automatically renew for an additional 12 months unless the customer notifies
the utility of their intention to be removed from the program. DEF calculates a
new monthly FixedBill amount for the following year and notifies the customer
of the new amount before the current 12-month FixedBill period expires. Currently,
approximately 53,000 customers are enrolled in the FixedBill Program.
To be eligible to enroll in the FixedBill Program, a
customer must take service under the standard residential rate schedule, must have
lived in their current residence for the past 12 months, must have a load
profile that can be modeled with reasonable predictability, and must be current
on their bill payments.
Proposed Revisions to the FB-1 Tariff
DEF is proposing revisions to its FB-1 Tariff Sheet No.
6.391 to establish a pilot program that would allow DEF to have limited control
of participating customers’ thermostats. DEF stated customers opting to
participate in the pilot program would need to have qualifying smart, WI-FI enabled
thermostats such as Nest, Ecobee or Emerson thermostats. Under the pilot, the utility
would be allowed to control the thermostat by adjusting the temperature within
a specified range. The maximum number and duration of control events would be
outlined in the customer’s service agreement. DEF stated that there will be up
to three events each month in the shoulder seasons (March-May and October-November) and
up to five events each month in the summer and winter (June-September and
December-February). These limits should be considered maximums, and the utility
anticipates fewer events in any given month. DEF stated its goal is to leverage
the existing FB-1 program and introduce technology to further enhance energy
savings along with peak energy demand reduction. DEF explained that smart
thermostats use predictive algorithms to understand the household’s heating and
cooling needs, automatically adjusting the system’s performance to match the
user’s needs. The customer has the ability to override the automatic settings
of their thermostat. The smart thermostat will communicate each participating
customer’s usage data to a third-party aggregator that will receive data from
all participating customers. This data
will be used to provide daily energy optimizations to determine when and if
specific customers’ load should be reduced while maintaining customers’
personal comfort levels.
DEF proposes to limit the proposed program to 2,000
participants and the proposed FB-1 tariff modification would be effective until
December 31, 2021. Participants will be enrolled on a first-come-first-serve
basis. In response to staff’s data
request, DEF stated that even in the event that the utility fails to enroll
2,000 customers, the utility would still implement this voluntary pilot
program. There is no initial set-up fee for customers who wish to participate
in the proposed voluntary pilot. At
the conclusion of the pilot on December 31, 2021, DEF will evaluate customer
interest and receptiveness to additional options under the FixedBill tariff and
the associated value.
DEF stated that once the program is approved, the utility would
market the pilot program on its webpage, social media, etc. Prior to DEF taking
control of a participating customer’s thermostat, for a particular event, DEF
will inform the customer via email or text message, mobile app or via the
thermostat. The customer would have the option to opt out of participation in
the energy reduction program for that day.
DEF explained that its goal is to test customer willingness
to allow DEF to control customers’ thermostats in exchange for a $50 prepaid
credit card. DEF stated that shareholder money will fund the $50 prepaid credit
card; therefore, the general body of ratepayers bears no risk associated with
the proposed pilot program. DEF also confirmed that all administrative costs
associated with this pilot program will be recorded below the line.
A customer would be able to participate in the pilot
program and the current Commission-approved Demand-Side Management (DSM)
programs. While the proposed FB-1 tariff pilot program is similar to its residential
EnergyWise DSM program, DEF stated that this pilot program is separate and it
will not seek to apply any associated demand or energy savings towards its DSM goals.
DEF’s current similar DSM programs for residential customers are the load
management tariffs RSL-1 and RSL-2 which provide for monthly load management bill
credits in return for allowing DEF to interrupt service to a water heater,
central heating system, central cooling system, or a pool pump. Under these
load management programs, customers receive bill credits based on the number of
appliances selected by the customer to be interrupted. DEF does not see an
overlap between the existing load management programs and the proposed pilot
program. DEF stated that if a customer
is enrolled in both a load management program and the proposed pilot program,
the traditional load management program would take precedence in the event the
utility determines it needs to reduce the customer’s heating or cooling load.
Reporting Requirements for the FB-1 Tariff Pilot
Program
Staff recommends that DEF provide a report to the
Commission at the conclusion of the pilot program on the program’s results.
This report should include information related to total number of residential
customers enrolled in the pilot, the average number of events per customer per
month, the average event duration per customer per month, and total demand
(kilowatt) and estimated energy (kilowatt-hour) savings. DEF should also
include a discussion on any lessons learned from the pilot. The utility should
file this report in the docket file within 30-days of termination of the pilot.
Conclusion
Having reviewed the petition, staff data request
responses, and responses given at an informal meeting, staff recommends that
the Commission should approve DEF’s revised Optional FixedBill (FB-1) pilot
rate schedule and associated Tariff Sheet No. 6.391 effective on the date of
the Commission vote. The proposed pilot program will allow DEF to achieve peak
demand reductions, while gauging customer receptiveness to HVAC control by way
of a WI-FI enabled thermostat combined with the FixedBill program.
Participating customers will benefit by receiving a $50 prepaid credit card and
the general body of ratepayers will benefit by any demand reductions realized.
Staff also recommends that DEF, at the end of the pilot program, file a report
in the docket file on the results of the program.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If Issue 1 is approved and a protest is filed
within 21 days of the issuance of the order, the tariff should remain in effect
pending resolution of the protest. If no timely protest is filed, this docket
should be closed upon the issuance of a consummating order. (Brownless)
Staff Analysis:
If Issue 1 is approved and a protest is filed within
21 days of the issuance of the order, the tariff should remain in effect
pending resolution of the protest. If no timely protest is filed, this docket
should be closed upon the issuance of a consummating order.
