Comments on the Proposed Customer Benefits Charge
February 26, 2020
The Customer Benefits Charge (CBC) fees proposed by Staff are significant. For residential customers considering a solar installation, the Staff proposed CBC would reduce potential bill savings by over 20%. substantial reduction in bill savings opportunities will reduce the customer incentive to install solar, increase payback periods and makes New York’s overall policy goal of installing 6 GW of solar capacity by 2025 harder to achieve.
In response to Staff’s Whitepaper, the CEP offer the following recommendations for the Commission to adopt:
1. The CBC fees proposed by Staff are significant. For residential customers considering a solar installation, the Staff proposed CBC would reduce potential bill savings by over 20%. substantial reduction in bill savings opportunities will reduce the customer incentive to install solar, increase payback periods and makes New York’s overall policy goal of installing 6 GW of solar capacity by 2025 harder to achieve.
2. If the Commission adopts Staff’s CBC proposal, it should provide clear guidelines regarding what cost categories will be included in the CBC. The CBC will significantly reduce the bill savings opportunities for customers, reducing the economic incentive for solar installations. The CEP recommend including only the low-income program costs in the CBC, which are expected to grow over time, requiring updates to the CBC through each utility’s general rate case process. However, if the Commission includes other cost categories, such as contributions to the Clean Energy Fund or Dynamic Load management, CEP recommend the Commission adopt a clear list of cost categories to provide certainty to the solar industry. If the components of the CBC are undefined, it will result in significant uncertainty for solar developers and customers in New York that will stunt the future growth of the industry.
3. The Commission should impose a hard cap on the level of the CBC for the bridge rate period. A hard cap on the total monthly CBC cost, $0.50 per kW for example, would provide solar developers and customers certainty on the future level of this charge. This price certainty would increase the likelihood of new solar installations in the bridge rate period. A hard cap on the total monthly CBC would not limit the ability of utilities to collect the necessary revenue to fully fund public benefit initiatives.
4. The Commission should outline a clear process for updating the CBC that will allow adjustments to the CBC levels in a statewide process without the need to litigate this issue in each utility rate case. The Staff Whitepaper provides no guidelines or clarity on how the CBC will be updated or changed. The CEP request that any changes to the CBC during the bridge rate period be proposed in a statewide process outside of individual utility rate cases. Utility rate cases are prohibitively expensive and time intensive. The CEP wish to avoid litigating changes to the CBC at the rate case level.
5. The Commission should reject the Staff proposal to directly assign the costs of new meters to solar customers. This proposal ultimately will require solar customers to pay twice for new metering because these costs will be embedded in the customer charge as all utilities in New York are already planning on installing new metering technology in the near future. Costs associated with new customer meters should be collected through the customer charge on an average customer basis, consistent with historic practice.
6. The Commission should reject movement toward three-part rates for mass market customers in future phases of this proceeding. Staff’s whitepaper strongly signals a preference to implement three-part rates for mass market customers in future phases of this proceeding. Three-part rates for mass market customers are antithetical to the State policy goals of increasing distributed energy resources, energy efficiency, and reducing carbon emissions. By rejecting the implementation of three-part rates, the Commission will provide strong direction to Staff to develop other options that are more beneficial to State policy goals while balancing the interests of the utilities and customers.
7. The Commission should order greater data transparency in later phases of this proceeding to ensure all parties have access to metering data necessary to evaluate rate options that will succeed bridge rates. In the first phase of this proceeding, the CEP did not have access to the hourly customer-level data for any of the joint utilities, despite repeated requests. Instead, CEP were asked to rely on the analysis of the Joint Utilities, Staff, and their consultants. This severely limited the CEP’s ability to conduct analysis and inform the Commission on rate design options that will substantially affect the solar industry in New York. To provide a level playing field and transparency, CEP ask the Commission to order anonymous data access protocols be established to ensure all parties have access to AMI data in future phases of this proceeding.
8. If the Commission adopts the CBC, it should be assessed based on the AC size of the installed system, not DC as proposed by Staff. The power produced by customer-sited solar systems flows into the utility distribution system through the meter in AC, not DC. Therefore, the system size measurement used to assess the CBC cost should be based on AC.
9. The Commission should order that utilities exempt any commercial customer on demand rates from paying the CBC. According to Staff, demand rates minimize and in most cases eliminate the alleged cost shift associated with volumetric rates. Staff also indicated it has not conducted analysis on the alleged cost shift for these customers. To the extent that the CBC is based on a cost shift, any commercial customer in New York on demand rates should be fully exempt from any CBC charges.
10. The Commission should order the Joint Utilities to update TOU rates. The current TOU rates in New York are undersubscribed and very poorly designed. The on peak windows are excessive, offering customers no opportunity to shift consumption to off peak periods. The CEP recommend the Joint Utilities update these rates to include a much shorter on peak time period that would allow customers to employ behavior and technological changes to reduce peak demands. This will also allow the Commission a tool to reduce peak demands, savings customers money through reduced future system costs borne through unnecessary distribution system upgrades.
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