1. Electricity Restructuring Roundtable Retail Rate Options for Large Customers in CT
Commissioner Anne C. George
Connecticut Department of Public Utility Control
Raab Associates/ Foley Hoag, Boston – October 28, 2005

2. Locational Marginal Pricing
Fuel
Prices $$
Enviro
Concerns $$
LMP $$
FERC
CT Electric Consumers
$$ Two Price Zones
FERC
Locational Marginal Pricing $$
RMR
Regional $$
LICAP
FERC
Locational Installed Capacity
Reliability-Must-Run generators

3. Post Hurricanes Katrina, Rita, Wilma Energy $$$ Impact
Pre-hurricane, global energy prices had already escalated to historic highs
Preliminary estimates vary as to cost & extent of damage & recovery time for Gulf area energy facilities
Consumers nationwide, this winter, are expected to spend*:
32 % more for heating oil ($/gal)
48 % more for natural gas ($/md)
6 % more for electricity ($/kWh)
Energy costs will vary based upon actual conditions: weather, global economic activity, & gulf recovery efforts
$$$
*Source: EIA- STEO (10/12/05) - based on U.S. Average for typical per-household consumption
Connecticut Department of Public Utility Control

4. Steps to Addressing CT Electric System Needs
CT has to:
1) Ensure adequate resources are in place to provide system reliability
2) Mitigate adverse $$$ monetary impacts from
various price pressures (LMP & LICAP, CT 2 Zones)
Action plan outlined in Public Act 05-1:
An Act Concerning Energy Independence
(Public Act 05-1/June Special Session)
Connecticut Department of Public Utility Control

5. CT Strategies to Meet Electric System Challenges
On-going
Strategies
Energy Efficiency
Conservation
Demand/Load Response
Distributed Generation
Transmission
Generation
Connecticut Department of Public Utility Control

6. CT Policy Approach to Improve Electric System
AAC Energy Independence
Basic concept – unique hybrid approach…
state is catalyst for market to respond directly to identified needs
Four basic strategies promoted:
1) Customer-side; Grid-side distributed generation- CHP
2) Incentives for other new generation (capacity
contracts)
3) Demand side resources – demand response & EE
4) Rate changes
Connecticut Department of Public Utility Control

7. Rate Initiatives for Large Customers
TOU Rates
DPUC decision on process for exemption (until 1/1/ 2010) from mandatory TOU rates (Jan. 1, 2006)
Optional TOU - for all customers (June 1, 2006)
Mandatory peak, shoulder & off-peak TOU rates kW or greater max. demand (Jan. 1, 2007)
Seasonal Rates
Optional seasonal rates - for all customers (June 1, 2006)
Interruptible & Load Response Rates
350 kW or greater max. demand (June 1, 2006)
Connecticut Department of Public Utility Control

8. Rate Initiatives for Large Customers
April 1, 2006 to March 31, 2007
EDCs issue comparative analyses to all customers on mandatory seasonal rates
EDCs assist customers in managing loads & reducing peak consumption
Exemption from Back-up Power Charge
For new customer-side distributed resources if its capacity is less than peak load and the resources are available to the system during peak periods
Connecticut Department of Public Utility Control

9. DPUC Core Implementation Dockets
Measures to Reduce FMCCs (Short Term Measures) effective by 1/1/06
Measures to Reduce FMCCs (Long Term Measures) RFP conducted on 2/1/06
Development of Various Incentives for Customer Side Distributed Generation (gas rebate; back-up rates)
Development of a Program for Monetary Grants for Capital Costs of Customer Side Distributed Generation (capital grants)
Development of Long Term Financing for Customer Side Distributed Generation
Development of New Class III Renewable Program (CHP/C&I EE)
Development of a Process & Standards for RFP for Long-Term Measures to Reduce FMCCs
Financial Impact of Long-Term Contracts on Electric Distribution Companies
Connecticut Department of Public Utility Control
*Participants in Phase I of this proceeding will have the same status in Phase II.

10. CT DPUC Decoupling Docket Docket 05-05-09
PA 05-1, Section 21: DPUC Decoupling Investigation
The law requires the DPUC to investigate how best to decouple earnings of gas and electric utilities from their sales in order to promote the state's energy policy
DPUC must report its findings and recommendations to the Legislatures Energy & Technology Committee by January 1, 2006
Connecticut Department of Public Utility Control

11. Areas To Be Considered Ratcheted demand charges
Decoupling – fixed distribution revenue recovery
Exemption from back-up and stand-by rates
kVa rates
Residential demand based rates (high demand customers)
Connecticut Department of Public Utility Control

12. CEAB’s Role in DPUC Implementation Process
REPORT
First Report (Sept. 2005) – DPUC will use CEAB Needs Assessment
to make determination on near-term FMCC reduction measures (1/1/06)
Recommendations on Actions:
Mitigate CT’s peak demand
Preserve CT’s local generation & encourage new generation resources
Improve CT’s transmission
Second Report (Nov./Dec. 2005) – DPUC will use CEAB Needs Assessment to make determination on longer-term FMCC reduction measures (Feb RFP).
AAC Energy Independence – carved out projects awarded under DPUC Feb RFP from CEAB RFP process
Connecticut Department of Public Utility Control

13. Benefits of Implementation of CT Strategies
New & upgraded facilities will result in improvements to system reliability & efficiency
Load management and reduction will:
reduce customer & system costs
operate to cut $$$ for LMP, LICAP
Connecticut Department of Public Utility Control