Jim Ziolkowski

Report
Ohio
Duke Energy Ohio
2012 Electric Security Plan
Duke Energy Ohio
June 29, 2012
Jim Ziolkowski, Rates Manager
Agenda
Ohio
 Duke Energy Ohio Electric Security Plan Standard
Service Offer (ESP-SSO) and Distribution Rates




Overview of ESP
Auction
Generation Riders
Other Items
 Transmission (Not Part of ESP)


Move to PJM
New Riders
 Price To Compare
2
ELECTRIC SECURITY PLAN OVERVIEW
Ohio

Duke Energy Ohio filed a 9-year 5-month Electric Security
Plan (ESP) in June 2011. The previous ESP terminated after
December 31, 2011.

Settlement was reached in October 2011 with intervening
parties.

Hearing held during November 2011.

ESP was approved by the PUCO in November 2011.

ESP effective January 1, 2012, through May 31, 2015.
3
ELECTRIC SECURITY PLAN OVERVIEW

Ohio
Major rate provisions of the new ESP include:




Retail generation Standard Service Offer load to be
procured through an auction. The cost of this
auction-procured load will be recovered through
Riders RC and RE. True-ups addressed through
Rider SCR.
DE OH will move its legacy generation plants to a
non-regulated affiliate by 12/31/14.
DE OH will collect $110 million per year for three
years through a new non-bypassable charge (Rider
ESSC).
All previous generation-related charges terminated
after December 31, 2011 (base generation, FPP,
AAC, SRT, CD, shopping credit).
4
Ohio
AUCTION SCHEDULE
5
Details of Auction
Ohio
 First auction held on December 14, 2011.

Three products:



January 2012 – May 2013
January 2012 – May 2014
January 2012 – May 2015
 Descending-price clock auction
 Charles River Associates was the auction manager. Boston
Pacific monitored for the PUCO.
 Auction was for capacity and energy.
 Blended auction price was $52.68 per MWh for the January
2012 through May 2013 delivery period.
6
Auction Schedule
Ohio
ESP Period 3 years and 5 months
Auction
Date
Auction 1
Dec 2011
Tranches
33
33
34
Delivery Period Beginning
1/1/2012 - 17 months
6/1/2013
33
33
33
34
34
6/1/2014
34
Auction 2
May 2012
17
17
17
Auction 3
Nov 2012
16
16
16
Auction 4
May 2013
Auction 5
Nov 2013
17
17
16
16
TOTAL TRANCHES
100
100
100
7
Ohio
2012 ELECTRIC SECURITY PLAN
RATE STRUCTURE AND IMPACTS
8
GENERATION RATES - 2012

The Price To Compare (bypassable) components of the ESPSSO are:







Ohio
Rider RC (Retail Capacity)
Rider RE (Retail Energy)
Rider SCR (Supplier Cost Reconciliation)
Rider AERR (Alternative Energy Recovery)
Rider RECON (Reconciliation Rider)
Rider RTO (Regional Transmission Organization)
Other Generation-related riders that are non-bypassable:



Rider ESSC (Electric Security Stabilization Charge)
Rider LFA (Load Factor Adjustment)
Rider UE-GEN* (Uncollectible Expense – Generation)
* Bypassable if CRES opts out of PAR
9
Old ESP to 2012 ESP Rate Changes – Non-Residential
Ohio
RC and RE
•Base generation
•Retail Capacity and Energy
•Derived from auction
PTC – AAC
SCR
PTC - BG
•Environmental
•Homeland Security
•Taxes
•Supplier Cost Reconciliation
AERR
RECs
PTC-FPP
•Alternative Energy Recovery
RECON
Reconciles ESP riders
•Fuel, Purchased Power,
Allowances
•RECs
Rider RTO
•Various RTO costs
SRA-SRT
BTR
•System Reliability
•Base transmission incl. NITS
SRA-CD (Rider SC)
•Capacity Dedication
ESSC
•Electric Security Stabilization
Rider TCR
•MISO Transmission
Distribution rates and
riders
Legend
Fully Avoidable
Avoidable with
waiver
Unavoidable
UE-GEN
Generation Uncollectibles
LFA
•Load Factor Adjustment
Distribution rates and
riders
10
Old ESP to 2012 ESP Rate Changes – Residential
Ohio
RC and RE
•Base generation
•Retail Capacity and Energy
•Derived from auction
PTC – AAC
SCR
PTC - BG
•Environmental
•Homeland Security
•Taxes
•Supplier Cost Reconciliation
AERR
RECs
PTC-FPP
•Alternative Energy Recovery
RECON
Reconciles ESP riders
•Fuel, Purchased Power,
Allowances
•RECs
Rider RTO
•Various RTO costs
SRA-SRT *
•System Reliability
BTR
SRA-CD
Capacity Dedication
ESSC
•Base transmission incl. NITS
•Electric Security Stabilization
Rider TCR
•MISO Transmission
Distribution rates and
riders
* Conditionally avoidable only for
aggregation customers
Legend
Fully Avoidable
Avoidable with
waiver
Unavoidable
UE-GEN
Generation Uncollectibles
LFA
•Load Factor Adjustment
Distribution rates and
riders
11
RIDER RC (RETAIL CAPACITY)
Ohio
 Based on PJM RPM market capacity price for the delivery
period.
 Converted into retail rates.
 Rider RC will be adjusted before each of the three delivery
periods in the ESP.
 Rider RC is fully avoidable by shoppers.
12
RIDER RE (RETAIL ENERGY)
Ohio
 At the wholesale level, calculated by subtracting the
capacity price for the delivery period from the blended
auction price.
 Converted into retail rates by adjusting for losses, taxes,
and seasonality / blocks (for some rates).
 Rider RE will be adjusted before each of the three delivery
periods in the ESP.
 Rider RE is fully avoidable by shoppers.
13
RIDER ESSC (ELECTRIC SECURITY
STABILIZATION CHARGE)
Ohio
 Collects $110 million per year for three years.
 Expires after 12/31/14.
 Will be trued up each year.
 Rider ESSC is non-bypassable.
14
RIDER SCR (SUPPLIER COST
RECONCILIATION)
Ohio
 Reconciles the Rider RE and Rider RC revenues received
from retail customers with the payments owed to auction
providers.
 Recovers costs associated with auctions (e.g.,
consultants, setting up CBP website, etc.)
 Will be adjusted quarterly.
 Normally bypassable for shopping customers, but Rider
SCR contains a non-bypassable provision.
15
RIDER SCR (SUPPLIER COST
RECONCILIATION) – “Circuit Breaker”

Subject to Commission approval, Rider SCR becomes applicable to all retail
jurisdictional customers in the Company’s electric service territory including those
customers taking generation service from a CRES provider under the following
circumstance:



Ohio
The revenue balance within the SCR account becomes equal to or greater than ten
percent of the Company’s total actual SSO revenues collected for the most recent
twelve month period under Riders RE, RC, RECON, RTO, and AER-R. The total
actual SSO revenue will be determined from data covering the most recent quarter for
which it is available.
Duke Energy Ohio shall apply to the Commission for confirmation that the Company
should modify the Rider such that it becomes non-bypassable regardless as to
whether or not the balance in the Rider results from over- or under-recovery.
For customers of CRES providers, Rider SCR will become bypassable again
when, at the time of the quarterly filing, the Rider balance of over- or underrecovery falls below the ten percent threshold.
16
RIDER AERR (ALTERNATIVE ENERGY
RECOVERY RIDER)
Ohio
 Recovers the cost of RECs associated with Standard
Service Offer (i.e., non-switched) load.
 Will be adjusted quarterly.
 Rider AERR is fully avoidable by shoppers.
17
RIDER RECON (RECONCILIATION RIDER)
Ohio
 Rider RECON recovers costs necessary to true up
revenue collected under Rider PTC-FPP and Rider SRASRT with actual costs associated with each of these two
riders through December 31, 2011.
 Rider RECON will terminate when the net over- and/or
under-recovery balances for Rider PTC-FPP and Rider
SRA-SRT are eliminated but no later than two quarters
after the filing of a final entry in the docket initiated by the
Commission for purposes of conducting a final audit of
Rider PTC-FPP and Rider SRA-SRT.
 Rider RECON is fully avoidable by shoppers.
18
RIDER UE-GEN (UNCOLLECTIBLE
EXPENSE - GENERATION)
Ohio
 Recovers uncollectible accounts expense related to
generation service including Percentage of Income
Payment (PIPP) customer installments not collected
through the Universal Service Fund Rider.
 Non-bypassable except it is bypassable for accounts that
are not designated for Duke Energy Ohio’s Purchase of
Accounts Receivables program.
 Will be adjusted annually.
19
RIDER LFA (LOAD FACTOR ADJUSTMENT RIDER)
Ohio
 Revenue neutral to Duke Energy Ohio.
 Will be adjusted quarterly.
 Rider LFA is non-bypassable.
 Rider LFA applies to customers taking service under
Rates DS, DP, and TS.
 Demand charge and kWh credit.
20
OTHER ITEMS
Ohio
 Minimum stay rules eliminated for all customer
classes.
 DE OH received approval to sell its generation plants
to a non-regulated affiliate.
 Duke Energy Ohio will purchase accounts receivables
from CRES providers at zero discount
 Rider LM has been re-opened to both shoppers and
non-shoppers
 Funding provided to various community agencies
serving low income customers.
 Filed an application in December for a new Distribution
Decoupling Rider. Will not apply to DS, DP, and TS.
21
TYPICAL BILL IMPACTS – RATE DS
LINE
NO.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
HOURS
200
300
400
200
300
400
200
267
400
200
300
400
500
300
400
200
300
500
RATE
CODE
DS
LEVEL
of
DEMAND
(KW)
30
30
30
50
50
50
75
75
75
100
100
100
100
300
300
500
500
1,000
LEVEL
of
USE
(KWH)
6,000
9,000
12,000
10,000
15,000
20,000
15,000
20,000
30,000
20,000
30,000
40,000
50,000
90,000
120,000
100,000
150,000
500,000
Dec-11
NON-SHOP
($)
$909
1,087
1,221
1,487
1,784
2,007
2,209
2,506
2,989
2,931
3,525
3,972
4,418
10,489
11,829
14,481
17,453
43,797
ESSC+
RC+LFA
$198
148
89
330
247
149
495
412
223
660
494
297
101
1,482
892
3,299
2,469
1,011
Ohio
Retail Prices for Jan 2012-May 2013
Total Bill
Difference from 2011 SSO
RE
SSO Customer
$
%
Bypassable
$316
$741
-$168
-19%
474
$854
(233)
-21%
632
$959
(263)
-21%
526
$1,206
(281)
-19%
790
$1,395
(388)
-22%
1,053
$1,570
(438)
-22%
790
$1,788
(421)
-19%
1,053
$1,977
(529)
-21%
1,579
$2,333
(656)
-22%
1,053
$2,369
(561)
-19%
1,579
$2,748
(777)
-22%
2,106
$3,096
(875)
-22%
2,632
$3,445
(973)
-22%
4,738
$8,159
(2,331)
-22%
6,317
$9,204
(2,625)
-22%
5,264
$11,675
(2,807)
-19%
7,896
$13,569
(3,884)
-22%
26,321
$34,062
(9,734)
-22%
NOTES: EXISTING GENERATION RATE IS COMPRISED OF BASE GEN, FPP, AAC, SRT, AND CD.
22
TYPICAL BILL IMPACTS – RATE DP
LINE
NO.
RATE
HOURS CODE
LEVEL
of
DEMAND
(KW)
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
144
288
432
144
288
432
144
288
432
144
288
432
144
288
432
144
288
432
144
288
432
144
288
432
DP
100
100
100
200
200
200
300
300
300
500
500
500
800
800
800
1,000
1,000
1,000
1,500
1,500
1,500
3,000
3,000
3,000
LEVEL
of
USE
(KWH)
14,400
28,800
43,200
28,800
57,600
86,400
43,200
86,400
129,600
72,000
144,000
216,000
115,200
230,400
345,600
144,000
288,000
432,000
216,000
432,000
648,000
432,000
864,000
1,296,000
Dec-11
NON-SHOP
($)
$2,631
3,505
4,196
5,058
6,808
8,190
7,486
10,111
12,183
12,341
16,716
20,170
19,625
26,623
32,150
24,480
33,229
40,137
35,572
48,695
59,058
68,848
95,094
115,820
ESSC+
RC+LFA
$787
563
294
1,573
1,126
589
2,360
1,689
883
3,933
2,814
1,472
6,293
4,503
2,356
7,866
5,629
2,945
11,577
8,221
4,195
22,710
15,997
7,946
Ohio
Retail Prices for Jan 2012-May 2013
Total Bill
Difference from 2011 SSO
RE
SSO Customer
$
%
Bypassable
$758
$2,280
($350)
-13%
1,516
$2,841
(665)
-19%
2,274
$3,357
(839)
-20%
1,516
$4,357
(701)
-14%
3,032
$5,479
(1,329)
-20%
4,548
$6,511
(1,679)
-21%
2,274
$6,435
(1,051)
-14%
4,548
$8,117
(1,994)
-20%
6,822
$9,665
(2,518)
-21%
3,790
$10,589
(1,752)
-14%
7,580
$13,392
(3,323)
-20%
11,371
$15,973
(4,197)
-21%
6,064
$16,821
(2,804)
-14%
12,129
$21,306
(5,317)
-20%
18,193
$25,434
(6,716)
-21%
7,580
$20,975
(3,505)
-14%
15,161
$26,582
(6,647)
-20%
22,741
$31,742
(8,395)
-21%
11,371
$31,140
(4,433)
-12%
22,741
$39,550
(9,145)
-19%
34,112
$47,290
(11,768)
-20%
22,741
$61,632
(7,216)
-10%
45,483
$78,452
(16,642)
-18%
68,224
$93,933
(21,887)
-19%
23
TYPICAL BILL IMPACTS – RATE TS
LINE
NO.
HOURS
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
200
400
200
400
200
400
200
400
600
200
400
520
535
681
400
600
500
600
RATE
CODE
TS
LEVEL
of
DEMAND
(KVA)
1,000
1,000
2,500
2,500
5,000
5,000
10,000
10,000
10,000
20,000
20,000
25,061
29,866
38,553
80,000
80,000
100,000
200,000
LEVEL
of
USE
(KWH)
200,000
400,000
500,000
1,000,000
1,000,000
2,000,000
2,000,000
4,000,000
6,000,000
4,000,000
8,000,000
13,043,867
15,964,371
26,253,097
32,000,000
48,000,000
50,000,000
120,000,000
Dec-11
NON-SHOP
($)
$23,399
32,261
58,195
80,350
116,188
160,499
232,175
320,797
405,999
464,149
641,393
932,279
1,128,863
1,697,645
2,467,613
3,149,229
3,469,911
7,629,381
ESSC+
RC+LFA
$6,728
2,947
16,819
7,367
33,638
14,735
67,276
29,470
(9,345)
134,551
58,940
15,255
10,037
(96,603)
215,602
(94,916)
67,029
(287,685)
Ohio
Retail Prices for Jan 2012-May 2013
Total Bill
Difference from 2011 SSO
RE
SSO Customer
$
%
Bypassable
$10,167
$18,412
($4,987)
-21%
20,335
$24,818
(7,442)
-23%
25,418
$45,728
(12,467)
-21%
50,836
$61,744
(18,606)
-23%
50,836
$91,254
(24,934)
-21%
101,673
$123,287
(37,212)
-23%
101,673
$182,308
(49,867)
-21%
203,346
$246,373
(74,424)
-23%
305,018
$309,429
(96,570)
-24%
203,346
$364,414
(99,735)
-21%
406,691
$492,544
(148,849)
-23%
663,103
$712,330
(219,949)
-24%
811,571
$862,096
(266,767)
-24%
1,334,613
$1,290,775
(406,869)
-24%
1,626,765
$1,949,416
(518,197)
-21%
2,440,148
$2,453,865
(695,364)
-22%
2,541,821
$2,743,601
(726,310)
-21%
6,100,370
$6,083,966
(1,545,415)
-20%
24
Alternative Energy, Energy Efficiency,
Peak Demand Reduction
Ohio
 ESP will not impact commitment to meeting alternative
energy, energy efficiency, or peak demand reduction
requirements.
 Duke Energy Ohio currently acquires RECs to meet
alternative energy requirements.
 Duke Energy Ohio will continue to purchase RECs and also
enter contracts to comply with alternative energy
requirements.
 Duke Energy Ohio will continue energy efficiency and peak
demand reduction programs.
25
ESP TERMINATION
Ohio
 The Electric Security Plan will be effective through May
31, 2015.
 The Company is required to make its next ESP filing by
June 1, 2014.
26
Ohio
TRANSMISSION RIDERS
27
RTO Membership
Ohio
 Duke Energy Ohio received FERC approval to realign RTO
membership with PJM.
 Realignment effective January 1, 2012.
 Auction timeline designed to coordinate with PJM planning
year.
28
Rider BTR and Rider RTO
Ohio
 Rider TCR (Transmission Cost Recovery) terminated after
December 31, 2011. Rider TCR was bypassable for
shoppers.
 New transmission riders effective January 1, 2012:

Rider BTR (Base Transmission Rider). Non-bypassable,
i.e., no longer part of the price to compare.

Rider RTO (Regional Transmission Organization Rider).
Fully bypassable. Currently zero.
29
Old ESP to 2012 ESP Rate Changes – Non-Residential
Ohio
RC and RE
•Base generation
•Retail Capacity and Energy
•Derived from auction
PTC – AAC
SCR
PTC - BG
•Environmental
•Homeland Security
•Taxes
•Supplier Cost Reconciliation
AERR
RECs
PTC-FPP
•Alternative Energy Recovery
RECON
Reconciles ESP riders
•Fuel, Purchased Power,
Allowances
•RECs
Rider RTO
•Various RTO costs
SRA-SRT
BTR
•System Reliability
•Base transmission incl. NITS
SRA-CD (Rider SC)
•Capacity Dedication
ESSC
•Electric Security Stabilization
Rider TCR
•MISO Transmission
Distribution rates and
riders
Legend
Fully Avoidable
Avoidable with
waiver
Unavoidable
UE-GEN
Generation Uncollectibles
LFA
•Load Factor Adjustment
Distribution rates and
riders
30
Ohio
PRICE TO COMPARE
2012
31
How Do I Calculate My Price to Compare?
Ohio
Compare:
DE OH’s Rider RC Charge
+ Rider RE Charge
+ Rider SCR Charge
+ Rider AERR Charge
+ Rider RECON Charge
+ Rider RTO Charge
vs.
The CRES Provider’s price for electricity
Note: Price To Compare varies based on load factor
32
Load Factor
Ohio
Load Factor:
kWh used during the month
divided by
hours in the month x monthly demand
Impact:
> The higher the load factor, the lower the rate per kWh
> The lower the load factor, the higher the rate per kWh
33
Price To Compare Calculation
High Load Factor
Rate DP
Ohio
72%
kWh
kW
518,400
1,000
Rider RC
Rider RE
Rider SCR
Rider AERR
Rider RECON
Rider RTO
$
1,649.53
27,289.61
201.14
-
Total
$
29,140.28
Billing kWh
Price To Compare (¢ per kWh)
518,400
5.6212
34
Price To Compare Calculation
Low Load Factor
Rate DP
Ohio
21%
kWh
kW
518,400
3,456
Rider RC
Rider RE
Rider SCR
Rider AERR
Rider RECON
Rider RTO
$
3,551.22
27,289.61
201.14
-
Total
$
31,041.97
Billing kWh
Price To Compare (¢ per kWh)
518,400
5.9880
35
Recommendations
Ohio
Use twelve months of demand and energy to develop an “average
annual price to compare” for the best price comparison
Compare competing offers using the same usage data
36
Annual Price To Compare (Example)
kW
1,000
1,240
1,450
1,850
2,200
2,850
3,458
3,512
1,888
1,450
1,100
1,098
kWh
518,665
625,120
650,000
689,000
750,000
812,000
518,000
822,000
651,030
525,012
518,665
612,000
7,691,492
Load
Factor
72.0%
70.0%
62.3%
51.7%
47.3%
39.6%
20.8%
32.5%
47.9%
50.3%
65.5%
77.4%
Ohio
AERR, RTO, RECON, SCR
201.24
242.55
252.20
267.33
291.00
315.06
200.98
318.94
252.60
203.70
201.24
237.46
RC, RE
28,953.31
34,896.63
36,448.24
38,955.23
42,585.26
46,528.18
30,820.23
47,509.96
36,965.95
29,767.88
29,058.94
34,045.39
Total
29,154.55
35,139.17
36,700.44
39,222.56
42,876.26
46,843.24
31,021.22
47,828.90
37,218.55
29,971.58
29,260.18
34,282.85
Price To
Compare (¢)
5.62
5.62
5.65
5.69
5.72
5.77
5.99
5.82
5.72
5.71
5.64
5.60
2,984.30
436,535.19
439,519.48
5.71
37
Duke Energy Ohio Tariffs
Ohio
 DE OH’s tariffs can be found online at:
www.duke-energy.com
38
DE OH Standard Service Offer
Ohio
Questions?
39

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