Agenda Date: 09/12/08 Agenda Item: 2A-2 ~)TA TE OF NEW JERSEY Board of Public Utilities Two Gateway Center Newark, NJ 07102 www.ni.qov/blJu ENERGY IN THE MATTER OF THE PRO'I/ISION OF BASIC GENERATION SERVI(~E FOR '(EAR TWO OF THE POST TRANSITION PI=RIOD DECISION AND ORDER APPROVING THE PASS- THROUGH OF FERC AUTHORIZED CHANGES IN FIRM TRANSMISSION SERVICE RELATED CHARGES- JUNE 16,2008 FILING IN THE MATTER OF THE PROVISION OF BASIC GENERATION SERVI(~E FOR THE PERIOD BEGINNlflJG JUNE 1, 2006 DOCKET NOS. EOO3050394, EOO5040317, EOO6020119, AND ERO7060379 IN THE MATTER OF THE PROVISION OF BASIC ) GENERATION SERVI(~E FOR THE PERIOD BEGINNING) JUNE 1, 2007 ) IN THE MATTER OF THE PROVISION OF BASIC) GENERATION SERVIC;E FOR THE PERIOD BEGINNING) JUNE 1, 2008 ) (SERVICE LIST ATTACHED) BY THE BOARD: On June 16, 2008, Atlantic City Electric Company ("ACE"), Jersey Central Power and Light Company ("JCP&L"), Public SE~rvice Electric and Gas Company ("PSE&G"), and Rockland Electric Company ("RECO") (collectively, the "EDCs") filed a joint petition with the New Jersey Board of Public Utilities ("Board") requesting recovery of Federal Energy Regulatory Commission ("FERC") approved changes in firm transmission service related charges. The EDCs' proposed tariff changes reflect increases to the Basic Generation Service ("BGS") Fixed Price ("BGS-FP") and Commercial and Industrial Energy Pricing ("BGS-CIEP") rates to customers resulting from changE~s in the PJM Open Access Transmission Tariff ("GATT") made in response to a filing by Trans-)\llegheny Interstate Line Company ("TrAILCo") In FERC Docket No. ER07562-000, and a filing by Virginia Electric and Power Company ("VEPCo") in FERC Docket Nos. ER08-92..000 through ER-08-92-003. The EDCs requested that the changes become effective on September 1,2008. The EDCs are also requesting that the BGS suppliers be compensated for this increase, subject to terms and conditions of the applicable Supplier Master Agreements ("SMAs"). Any difference between the payments to BGS suppliers and charges to customers would flow through each EDC's BGS Reconciliation Char!~e.
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~)T A TE OF NEW JERSEY Board of Public UtilitiesNewark, NJ 07101 Lisa Ferguson Duke Energy North America 5400 Westheimer America Houston, TX 77056 Steve Sheppard DTE Energy Trading
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Agenda Date: 09/12/08Agenda Item: 2A-2
~)T A TE OF NEW JERSEYBoard of Public Utilities
Two Gateway CenterNewark, NJ 07102www.ni.qov/blJu
ENERGY
IN THE MATTER OF THE PRO'I/ISION OF BASICGENERATION SERVI(~E FOR '(EAR TWO OF THEPOST TRANSITION PI=RIOD
DECISION AND ORDERAPPROVING THE PASS-THROUGH OF FERCAUTHORIZED CHANGES INFIRM TRANSMISSIONSERVICE RELATEDCHARGES- JUNE 16,2008 FILING
IN THE MATTER OF THE PROVISION OF BASICGENERATION SERVI(~E FOR THE PERIOD BEGINNlflJGJUNE 1, 2006
IN THE MATTER OF THE PROVISION OF BASIC )GENERATION SERVI(~E FOR THE PERIOD BEGINNING)JUNE 1, 2007 )
IN THE MATTER OF THE PROVISION OF BASIC)GENERATION SERVIC;E FOR THE PERIOD BEGINNING)JUNE 1, 2008 )
(SERVICE LIST ATTACHED)
BY THE BOARD:
On June 16, 2008, Atlantic City Electric Company ("ACE"), Jersey Central Power and LightCompany ("JCP&L"), Public SE~rvice Electric and Gas Company ("PSE&G"), and RocklandElectric Company ("RECO") (collectively, the "EDCs") filed a joint petition with the New JerseyBoard of Public Utilities ("Board") requesting recovery of Federal Energy RegulatoryCommission ("FERC") approved changes in firm transmission service related charges.
The EDCs' proposed tariff changes reflect increases to the Basic Generation Service ("BGS")Fixed Price ("BGS-FP") and Commercial and Industrial Energy Pricing ("BGS-CIEP") rates tocustomers resulting from changE~s in the PJM Open Access Transmission Tariff ("GATT") madein response to a filing by Trans-)\llegheny Interstate Line Company ("TrAILCo") In FERC DocketNo. ER07562-000, and a filing by Virginia Electric and Power Company ("VEPCo") in FERCDocket Nos. ER08-92..000 through ER-08-92-003. The EDCs requested that the changesbecome effective on September 1,2008.
The EDCs are also requesting that the BGS suppliers be compensated for this increase, subjectto terms and conditions of the applicable Supplier Master Agreements ("SMAs"). Any differencebetween the payments to BGS suppliers and charges to customers would flow through eachEDC's BGS Reconciliation Char!~e.
The EDCs further re(~uested that the Board approve subsequent changes to Schedule 12charges which reflect projects 'for which FERC authorizes incentive ratemaking, and which areallocated by PJM to the respective state's EDCs. Since it is expected that the FERC-approvedTransmission Enhancement Charges ("TECs") for the VEPCo project will change in January ofeach year and may also changle from time to time, the EDCs also requested approvar to submitcompliance tariff sheets to im~)lement any subsequent FERC-approved changes to the TECsresulting from the VEPCo project, In addition, the EDCs request approval to submit compliancetariff sheets for future TEC changes effective each June 1 related to the annual revenuerequirements updates filed with FERC for the TrAILCo project.
The EDCs stated that this filing satisfies the requirements of paragraph 15.9(a) (i) and (ii) of theBGS-FP and BGS-CIEP SMAs, which mandate that BGS-FP and BGS-CIEP suppliers benotified of rate increases for firm transmission service, and that the EDCs file for and obtainBoard approval of an increase in retail rates commensurate with the FERC-implemented rateincrease.
The specific Schedule 12 charges, referred to as Transmission Enhancement Charges("TECs") , were implemented to compensate transmission owners for the annual transmissionrevenue requirements for "Required Transmission Enhancements" (as defined in the PJMDAn) that are requested by PJM for reliability or economic purposes. The costs of TECs arerecovered by PJM accordingl to an assigned cost responsibility through an additionaltransmission charge assessed in the affected transmission zones.
On July 2, 2007, TrAILCo made its compliance filing with FERC, which was the final actnecessary for PJM to begin billing wholesale customers for these TECs effective June 1, 2007.On August 7,2007, the EDCs fiiled a joint petition, requesting recovery of the allocated TrAILCofirm transmission service related charges. By Board Order dated January 18, 2008, the EDCsreceived approval from the Board to begin allocating TECs related to the TrAILCo project.1
On April 29, 2008, FERC approved the VEPCo Filings and accepted for filing, effective January1,2008, VEPCo's revised tariff sheets to the PJM OATT. Pursuant to FERC's Order, on May15,2008, TrAILCo submitted its formula rate update compliance filing with FERC.
Each EDC is allocated a different amount of TECs from PJM based on the cost for RequiredTransmission Enhancements in each EDC's transmission zone. Based on the allocation of theadditional VEPCo and TrAILCo transmission costs among the service classes in accordancewith each EDC's tariff, a residerltial customer will see the following BGS rate increase per monthper utility [including Sales and Use Tax ("SUT")]: ACE $0.000113 per kWh; JCP&L $0.0001 perkWh; PSE&G $0.000121 per kVvh, and RECO $0.00012 per kWh.
DISCUSSION AND FINDINGS
In the Board's Order dated Delcember 2, 2003, in Docket No. EO03050394, the Board foundthat the pass through of any ch;anges in the network integration transmission charge, and othercharges associated with the FE:RC-approved Open Access Transmission Tariff is appropriate.
11n the Matter of the Provision of Basic Generation Service for Year Two of the Post-Transition Period
2007 BPU Docket Nos. EO030503!34, EO04040288, EO05040317, and EO06020119, Order dated-'January 18, 2008.
Furthermore, by subsequent Orders, the Board approved Section 15.9 of the SMAs as filed bythe EDCs which requires that the EDCs file for Board approval of any increases or decreases intheir transmission charges thaI: have been approved by the FERC. The SMAs also authorizethe EDCs to increase the rates paid to suppliers for FERC-approved rates and increases to FirmTransmission Services once approved by the Board. The Board Orders further required that theEDCs review and verify the reqluested FERC authorized increases.
After review of the! verifications and supporting documentation, the Board HEREBYAPPROVES the increase to the BGS-FP and BGS-CIEP rates requested by each EDC for itsincreased transmission chargE~s resulting from the FERC-approved changes to the TECseffective for service on or after October 1, 2008. The Board FURTHER APPROVES the EDCs'request to compress the rates to reflect the implementation date of these changes. Approval ofthese adjustments will result irl approximately a 0.09% increase in BGS rates for residentialcustomers in each utility's servil:e territory. The EDCs are HEREBY ORDERED to compensatethe BGS suppliers for this transmission rate increase subject to the terms and conditions of theSMAs.
In addition, the Board ~~ DENIES the EDCs' request that any subsequent FERCapproved changes to Schedule 12, including those related to VEPCo and TrAILCo, beimplemented solely through thle submission of compliance tariff sheets. The EDCs mustcontinue to file for approval by the Board of the amount of any proposed pass through to BGScustomers of FERC-approved changes to Schedule 12, after review and verification by theEDCs.
BOARD OF PUBLIC UTiliTIES
711 ~y:f EANNE M. FOX
R~ESIDENT //L -
J l ../-<-:.F. B/)TLER
COMMISSIONERL. FIORDALISO
COMMISSIONER
,~
/)
NICHOLAS ASSEH'ACOMMISSIONER 11 HEREBY CERilFY that the WittGOM ~ S~ .jocument is a true copy of the original
in the files of tI.e Board of PublicIJtilities /) :.': .
ilONER
ATTEST: I r;;)(
KRISTIIZZ~SECRETARY
/)
3 BPU Docket Nos. EOO305094, EOO5040318,EOO6020119, and ERO7060378
Further, the Board HEREBY Q!f~ the EDCs to file tariffs and rates consistent with theBoard's findings within five (5) business days of this Board Order.
In the Matter of Basic Generation Service for Year Two of the Post Transition Period and In theMatter of the Provision of Basic; Generation Service for the Period Beginning June 1, 2006 and
In the Matter of the Provision of Basic Generation Service for the Period Beginning June 1, 1007and In the Matter of the Provision of Basic Generation Service for the Period Beginning June 1,
2008 -BPU Docket Nos. E:O03050394. EO05040317, EO06020119 and ER07060379
SERVICE LIST
Ike I. Givvs, VP &Compliance OfficerJP Morgan Ventures Corp.270 Park AvenueFloor 40New York, NY 10017
Michael J. FilipponeJersey Central Power & Light
Company300 Madison AvenueMorristown, NJ 07962
Gregory MarquisBulk Power Supply
ManagementPepco Holdings, Inc.701 9th Street NWWashington, DC 20068-0001
Timothy DanielsConstellation NewEnergy810 Seventh AvenueSuite 400New York, NY 10019-5818
John JensonPublic Energy Solutions41 Honeck StreetEnglewood, NJ 07631
Joseph E.JanochaPHI Rates & TechnicalServices5100 Harding HighwayMays Landing, NJ 08330
Michael DragoFirstEnergy Solutions24 Fisher PlaceTrenton, NJ 08618
Steven GabelGabel Associates417 Denison StreetHighland Park, NJ 08904
John StutzTellus Institute11 Arlington StreetBoston, MA 02116-3411
SueAnne I. HarrelPepco Energy Services39 Crestview DriveAsset Management GroupClinton, NJ 08809
Jay KooperAmerada HessOne Hess PlazaWoodbridge, NJ 07095
Phillip J. Passanante, Esq.Assistant General CounselPepco Holdings, Inc./ACE800 King Street, 5th FloorPO Box 231Wilmington, DE 19899-0231 Kevin Laguardia
Amerada HessOne Hess PlazaWoodbridge, NJ 07095
Dana SwiesonEPEX102 Pickering WaySuite 102Exton, PA 19341-1330
Kevin ConnellyFirst Energy150 West State StreetTrenton, NJ 08618 John L. Carley, Esq.
Consolidated EdisonCompany of NYLaw DepartmentRoom 1815-84 Irving PlaceNew York, NY 10003
Steven S. Goldenberg, Esq.Fox Rothschild, LLPPrinceton Corporate Center997 Lenox Drive, Bldg. 3Lawrenceville, NJ 08648-2311
Peter SchaubGeneral ManagerBulk Power Supply
ManagementPepco Holdings, Inc.701 9th Street NWWashington, DC 20068-0001
James C. Meyer, Esq.Riker, Danzig, Scherer,Hyland & PerrettiHeadquarters PlazaOne Speedwell AvenueMorristown, NJ 07962
Mark Baird, DirectorRegulatory AffairsReliant Energy, Inc.7642 West 450 NorthSharpsville, IN 46068
Sylvia BrodusPublic Energy Solutions41 Honeck StreetEnglewood, NJ 07631
Angelo ChambroneSelect Energy NY, Inc.507 Plum StreetSyracuse, NY 13204
Randal Griffin, Esq.Assistant General CounselPepco Holdings, Inc.Legal Department800 King StreetPO Box 231Wilmington, DE 19899-0231
Ken GfroererReliant EnergyRR 1 Box 242Stahlstown, PA 15687
Roger M. Schwartz c/o ResaIssue Management, LLC101 Poor Farm RoadPrinceton, NJ 08540
Kuljinder ChaseManaging Director
Energy TradingMerrill Lynch Capital Services4 World Financial Centerth FloorNew York, NY 10080