Funding for Consumer Advocates of the PJM States (CAPS) MC webinar October 19, 2015

Transcription

1 Funding for Consumer Advocates of the PJM States (CAPS) MC webinar October 19,

2 Our Role Even in vertically integrated states, a majority of electricity costs are affected by decisions made at PJM. Consumer Advocates represent end users who, other than large industrial customers, have no voice at PJM. Everyone benefits if Consumer Advocates can provide an early, knowledgeable and consistent voice for consumers within the PJM stakeholder process. 2

3 What is CAPS? CAPS is a non-profit organization made up of offices from the PJM states and the District of Columbia that are tasked by state law with representing the interests of electricity consumers. CAPS funding supports the Consumer Advocates participation in the PJM stakeholder process with staff dedicated to participation in PJM meetings and travel by Consumer Advocates for PJM meetings. 3

4 The Benefits Consumer Advocates learn from the stakeholder process so that they can take informed positions and work for consensus. Other stakeholders learn about consumer concerns and the reasons for Consumer Advocates positions. This improves the chances for resolution at PJM or, worst case, yields a narrower and betterinformed set of arguments at FERC. 4

5 Temporary Funding Until we received temporary funding, Consumer Advocates were mostly absent from the PJM stakeholder process due to limited state resources and travel restrictions. The Constellation Settlement in Docket No. IN provided startup funds for the creation of CAPS to coordinate Consumer Advocates involvement. With temporary funding, we have greatly increased our presence and been able to advocate effectively for all PJM consumers and participate more effectively in the consensus process. 5

6 Consumer Advocates of the PJM States - Annual Budget Category Amount Salaries & Fringes $210,000 Office Expenses $50,000 Travel & Meetings $125,000 Technical Consultants $65,000 Total $450,000 6

7 Our Request OPSI currently benefits from a fee charged on PJM transactions. CAPS seeks a similar Tariff. Our proposed funding: Would only be charged to electricity consumers; Our projected annual budget of $450,000 would be fully funded with a rate of $ /KWH; This amounts to approximately eight-tenths of a cent per year for a residential customer using 1,200 KWH per year; Any funds in hand from the Constellation Settlement and any secured through the Exelon merger will offset subsequent Tariff collections. 7

8 Timing We seek approval of this funding mechanism to provide continuity and the ability to plan for the long term. We continue to reach out to stakeholders to educate them about the benefits of effective Consumer Advocate participation and to seek their support. We need to have the funding tariff in place for 2016 to ensure needed operations. We respectfully ask stakeholders to support our proposed funding mechanism. 8

9 The Consumer Advocates Have a Strong Record as Reasonable, Constructive Participants in the Stakeholder Process The Consumer Advocates have consistently demonstrated a strong commitment to the stakeholder process as preferable to litigation. The Consumer Advocates have participated in good faith, committing to constructive, negotiated resolution of regional issues such as the ERPIV and Energy Market Offer Cap. With sector-weighted voting, Consumer Advocates voting privilege typically does not, by itself, change outcomes. 9

10 Q. Is Funding Consistent with First Amendment Considerations? A. Yes. Many PJM members are funded directly or indirectly by ratepayers. This does not result in compelled speech. FERC expressly rejected the First Amendment argument raised when it approved OPSI s funding. FERC Order on Funding Mechanism for OPSI, ER and -001, Dec. 20, 2005, para. 40, fn.13. Far from compromising anyone else s speech, funding only helps ensure that all needed voices are heard. Consumers are a required part of RTO governance, and FERC has recognized that resource issues may present barriers to Consumer Advocate participation that FERC may need to address. Order Accepting PJM Compliance Filing, 133 FERC 61,071, Oct. 21, 2010, para. 38 and concurrence of Chairman Wellinghoff at 2. 10

11 Q. Will Consumer Advocate funding open the door to other groups? A. No. The Consumer Advocates have a unique role under state law. The Consumer Advocates have a unique role as recognized by the PJM Operating Agreement. CAPS is an administrative body created solely to support participation by state advocates and is not comparable to a public interest organization or an affinity group. Consumer Advocate funding is essential for ensuring that the stakeholder process works and the advocates have a meaningful seat at the table. Everyone in the stakeholder process benefits from the improved dialogue. 11

12 Q. Are other Stakeholders Financially Harmed When Consumer Advocates Have a Meaningful Seat at the Table? A. Unlikely and the impact is small. The proposed funding is only collected from load through LSEs. Even in the short term, there is little risk that LSE s will have to eat a significant charge: The Consumer Advocates existing funds in hand will be used before any money is collected from load under the proposed tariff. That will be at least a year from now. Many contracts will be renegotiated before the tariff is fully implemented. Some existing contracts allow the tariff cost to be passed through even before renegotiation. The tariff amounts to just $ /KWH. 12

13 Funding for Consumer Advocates is only through a charge on energy to load Load (LSEs) Generation Transmission Virtual Transactions Ancillaries Capacity Will pay for CAPS Operations Will Not Pay 13