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The report includes two options to address the implementation of a Montgomery County Community Choice Aggregation.

From Report: 

[ *** ] As stated by OPC in the attached proposal, the goal is to provide a framework that allows Pepco to procure SOS power requirements for all of the load from Prince George’s County customers and a limited amount of load from Montgomery County opt-out customers by limiting supplier exposure to very large opt-out volumes from the MC CCA. The proposal seeks to achieve this by using a Base PLC capping mechanism. According to OPC, this provision limits supplier risk associated with serving significant unexpected load. Proposed revisions to the FSA are provided in the attached final version in OPC’s memo dated August, 2024.

OPC seeks to achieve this goal primarily by revising FSA § 6.3. Under the current approach, as described by OPC, the Base PLC is set on Day 1 of the delivery period without restriction (i.e., the Base PLC, which is the foundation of the suppliers’ obligation, can be higher or lower than projected at the time of the RFP without limit). The proposed approach is to set the Base PLC 10 days before the transition period capped at 10 MW above the amount projected in the RFP. The setting of the Base PLC would occur after Montgomery County customers have had an opportunity to opt-out from the CCA and prior to the beginning of the “transition period.”8 The proposed approach to setting the Base PLC is intended to reduce supplier risk exposure to unexpected opt-outs from the Montgomery County CCA in two ways:

1. By setting the Base PLC one month in advance of delivery, supplier exposure to the combination of last-minute opt-outs and other load increase is limited to the 5 MW INC.
   
   2. By capping the movement in the Base PLC to 10 MW above the amount projected in the RFP, total supplier exposure to the combined effect of opt-outs, migration from third-party supply, and load growth is limited to 15 MW – the INC (5 MW) plus the cap (10 MW). As noted above, this 15 MW exposure is reduced to 5 MW once the Base PLC is set.

The OPC proposal did not obtain consensus agreement, with one party unwilling to agree to the proposal. Staff also has not endorsed the proposal but is seeking to determine how much impact the risks associated with the development of the CCA and OPC’s proposal will have for Prince George’s County customers.

If the Commission does not approve and adopt the OPC proposal, the alternative proposal offered by Prince George’s County is to order fully separated SOS procurements for Prince George’s County customers beginning with the April 2025 SOS procurement for power delivery beginning on or after the start date of the CCA. This alternative would likely mitigate the impact of the CCA on Prince George’s County customers by removing the uncertainty regarding the number of customers served, which in turn mitigates the likelihood of the risk premium. Pepco would still be responsible for procuring power for Montgomery County customers that opt out of the CCA, but would do so through a completely separate procurement combining spot market purchases and gradually larger wholesale procurements as the number of Montgomery County customers that opt out of the CCA stabilizes.

Since it does not appear that further discussion in the Procurement Improvement Process will generate a consensus on OPC’s proposal or any other solution to mitigate the risks the creation of the CCA poses for customers who remain on SOS, most PIP Participants believe the issue is ripe for a Commission decision. Parties that wish to do so will offer their recommendations to the Commission no later than the Monday prior to the Administrative Meeting at which this Report is considered.

Report (ML#311980) (08/28/2024)
9056 (02/17/2006)
(In The Matter Of The Commission’s Investigation Into Default Service For Type II Standard Offer Service Customers) 
9064 (05/10/2006)
(In The Matter Of The Competitive Selection Of Electricity Supplier/Standard Offer Or Default Service For Investor-Owned Utility Small Commercial Customers; And For The Potomac Edison Company D/B/A Allegheny Power’s, Delmarva Power And Light Company’s And Potomac Electric Power Company’s Residential Customers)