SP0726, LD 1896, item 1, An Act To Improve Efficiency through Electric Rate Design and Advanced Technology

An Act To Improve Efficiency through Electric Rate Design and Advanced Technology

Be it enacted by the People of the State of Maine as follows:

Sec. 1. 35-A MRSA §3152, sub-§1, as amended by PL 2013, c. 369, Pt. F, §§2 to 4, is further amended to read:

1. Increased efficiency. The Legislature declares and finds that improvements in transmission and distribution utility rate design and related regulatory programs have great potential for reducing the cost of electric utility services to consumers, for encouraging energy conservation and efficient use of existing facilities and for minimizing the need for expensive new electric transmission capacity. It is the purpose of this chapter to:

A. Require the commission to relate transmission and distribution rates more closely to the costs of providing transmission and distribution service . , including promoting the recovery of fixed transmission and distribution utility costs through fixed customer charges to the maximum extent practicable and economically efficient;

C. Require the commission to consider the ability of low-income residential customers to pay in full for electric services as transmission and distribution rates are redesigned consistent with these policies; and

D. Require the commission to set rates , including transmission and distribution rates that vary by time of day and season and by other relevant cost drivers, to the extent practicable to achieve economic efficiency . ; and

E. Require the commission to examine and adopt appropriate changes to transmission and distribution utility rate class designations that would improve equity and economic efficiency.

Sec. 2. 35-A MRSA §3153-A, sub-§1, as corrected by RR 2009, c. 2, §103, is amended to read:

1. Proposals and programs developed. The commission , as it determines appropriate, shall order investor-owned transmission and distribution utilities to develop and submit to the commission for approval by January 1, 2019 specific rate design proposals and related programs for implementing energy conservation and energy efficiency techniques and innovations , either in conjunction with or independent of any rate-making proceeding pending before the commission. The proposals, as the commission determines, must be designed to encourage energy conservation, minimize the need for new transmission and distribution capacity, minimize costs of transmission and distribution service to consumers improve equity among customers, minimize transmission and distribution rates over the long term or short term and take into account the needs of low-income customers. In approving a proposal under this section, the commission shall give equivalent consideration to the goals of minimizing costs and minimizing transmission and distribution rates to consumers. Proposals must include, but are not limited to, proposals that provide for the development and implementation of:

A. Load management techniques , including proposals for implementing cost-effective load control and other smart grid technologies and programs, such as dispatchable load reduction technologies and distributed generation, designed to optimize distribution and transmission load profiles;

B. Rates that reflect marginal costs of services at different voltages, times of day or , seasons of the year or other relevant cost drivers, including short-run and long-run marginal costs associated with the construction of new transmission and distribution facilities;

D. Rates or other regulatory policies that encourage maintain transmission and distribution utility system reliability;

E. Transmission and distribution utility financing or subsidization of capital improvements undertaken by ratepayers to conserve optimize electricity used usage by the ratepayers in the future. This paragraph applies to future programs for utility financing of energy conservation or load management as long as the goal of such programs is to economically defer or eliminate the need for transmission and distribution plant upgrades. In addition to programs undertaken pursuant to this paragraph, programs may be undertaken pursuant to section 10110 to achieve goals other than that identified in this paragraph;

F. As defined by the commission by rule, cost-effective conversions of electric space heat systems to systems relying on other fuels and other techniques for enabling homeowners and tenants to replace on-peak, winter period electric usage with less expensive sources of heat;

G. Rates or bill payment assistance programs for residential customers who have been certified eligible for state or federal fuel assistance that take into account the difficulty these customers have paying in full for electric service or that target assistance to these customers in the most efficient manner, taking into account the necessity of maintaining electric service; and

H. Rates or programs that allow encourage incremental use or maintenance of existing use when those rates uses serve to minimize rate levels for all transmission and distribution customers. In approving any proposal for rates or programs that allow encourage incremental use or maintenance of existing use, the commission shall seek to ensure that rates for all customer classes will be lower than they would have been had the commission not approved the proposal.

Sec. 3. 35-A MRSA §3154, sub-§1, as amended by PL 1999, c. 398, Pt. A, §59 and affected by §§104 and 105, is further amended to read:

1. Rate design and conservation improvements. The commission shall mandate, after notice and hearing on the proposed schedule, a scheduled phasing-in of the improvements in transmission and distribution utility rate design and related regulatory programs submitted and approved under section 3153-A and is authorized to order utilities to implement transmission and distribution utility rate design improvements approved by the commission on a temporary, pilot and experimental basis, affecting either a portion or all of any class of consumers of any utility as the commission may determine is appropriate to carry out the purposes of this subchapter, and order other energy conservation techniques, programs and innovations relating to transmission and distribution utility service that, in the commission's judgment, are practicable, just and reasonably related to fulfilling the purposes of this chapter. In ordering any rate design improvements or any other programs for implementing energy conservation efficiency techniques and innovations referred to in section 3153-A, the commission shall consider rate design stability and shall ensure the revenue requirements of the utility.

Sec. 4. 35-A MRSA §3209, sub-§5 is enacted to read:

5. Supply rates. To the extent cost effective and practicable, the commission shall implement policies and practices to encourage competitive electricity suppliers to offer residential and commercial customers electricity supply pricing reflective of real-time market price variations.

Sec. 5. 35-A MRSA §10110, sub-§7, as enacted by PL 2009, c. 372, Pt. B, §3, is amended to read:

7. Conservation program fund. The trust shall establish a conservation program fund to be used solely for conservation programs , except as described in paragraph C and subsection 10.

A. The commission shall deposit all assessments collected pursuant to this section, other than funds deposited in the administration fund, into the program fund.

B. Any interest earned on funds in the program fund must be credited to the program fund.

C. Funds Except for funds targeted for low-income residential transmission and distribution customers, funds not spent in any fiscal year remain in the program fund to be used for conservation programs. Funds targeted for low-income residential transmission and distribution customers that are not spent within a fiscal year may, at the commission's discretion, be returned to investor-owned transmission and distribution utilities to offset any bill increases to low-income residential transmission and distribution customers as a result of rate design changes that recover fixed residential transmission and distribution utility costs through fixed customer charges.

D. The commission or the trust may apply for and receive grants from state, federal and private sources for deposit in the program fund and also may deposit in the program fund any grants or other funds received by or from any entity with which the commission or trust has an agreement or contract pursuant to this section if the commission receives prior written consent from the trust that receipt of those funds would be consistent with the purposes of this section. If the commission or trust receives any funds pursuant to this paragraph, it shall establish a separate account within the program fund to receive the funds and shall keep those funds and any interest earned on those funds segregated from other funds in the program fund.

Sec. 6. 35-A MRSA §10110, sub-§10, as amended by PL 2013, c. 369, Pt. A, §24, is further amended to read:

10. Funds held in trust. All funds collected from electricity consumers pursuant to this section are collected under the authority and for the purposes of this section and are deemed to be held in trust for the purposes of benefiting electricity consumers. In the event funds are not expended or contracted for expenditure within 2 years of being collected from consumers, the commission shall ensure that the value of those funds is returned to consumers. Funds targeted for low-income residential transmission and distribution customers pursuant to subsection 2, paragraph B, subparagraph (1) that are not expended or contracted for expenditure within 2 years must be returned to low-income residential transmission and distribution customers.

summary

This bill requires the Public Utilities Commission to promote recovery of fixed transmission and distribution costs through fixed customer costs, to the extent practicable and economically efficient, and to examine and make appropriate changes to transmission and distribution utility rate class designations to the extent such changes would improve equity and economic efficiency. The bill further requires the commission to implement transmission and distribution rates that vary by time of day and season or other relevant cost drivers, to the extent practicable, to achieve economic efficiency. The bill requires investor-owned transmission and distribution utilities to submit specific rate design proposals to the commission by January 1, 2019 and provides that such plans must include proposals for implementing cost-effective programs and load-control technologies to optimize distribution circuit and transmission system load profiles and rates or programs that encourage incremental usage if such uses would lower rates for all customer classes. The bill removes the requirement that transmission and distribution utilities' proposals include cost-effective conversions of electric space heat systems.

The bill also removes the requirement that rate design changes implemented pursuant to the Maine Revised Statutes, Title 35-A, section 3153-A be implemented on a temporary, pilot or experimental basis and requires the commission to implement policies and practices to encourage competitive electricity providers to offer residential and commercial customers supply prices reflective of real-time market price variations.

The bill provides that any Efficiency Maine Trust funds targeted to low-income residential transmission and distribution customers that remain unspent at the end of a fiscal year may, at the commission's discretion, be returned to investor-owned transmission and distribution utilities to offset bill increases to low-income transmission and distribution customers resulting from the bill's rate design changes. The bill also provides that Efficiency Maine Trust funds targeted to low-income residential transmission and distribution customers that are uncommitted 2 years after having been collected must be returned to those customers.

SP0726 LD 1896	Session - 128th Maine Legislature		LR 2966 Item 1
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