The Market Implementation Committee next month will consider proposals to allow network load customers more frequent opportunities to switch to nodal pricing.
Current rules allow network customers to make such switch requests annually, effective June 1st. A stakeholder group formed under a problem statement approved at the request of retail marketer Direct Energy proposed two alternatives to allow such switches monthly. The annual switching rules don’t allow retail marketers to provide innovative products, Direct Energy said.
Both proposals would limit intra-year switches to 5% of the electric distribution company (EDC) network service peak load. The differences between the two proposals are the additional caps on the number of customers per EDC: either five or 50 customers per EDC.
Marji Philips, of Hess Corp., said the intra-year switches could hurt Financial Transmission Rights holders. “If five large industrial customers switch to nodal in the middle of the year, your [FTR] holdings could be seriously impacted,” she said.
David Pratzon, of GT Power Group, questioned the breadth of support for the proposed changes, saying only a small number of stakeholders worked on the problem statement.
The proposals would phase in implementation of intra-year requests with quarterly switches allowed in the first year and monthly switches permitted in the following years. The first switches would be available effective June 1, 2014.
Customers would be required to provide 60 days’ notice before the switch becomes effective, a deadline that could be extended to up to 150 days for complex cases.
As under current rules, customers would be barred from switching from nodal back to zonal.
The MIC is expected to vote on the proposals at its next meeting.
PJM contact: Tom Zadlo
