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Control Number : 36234

Item Number : 18

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OPEN MEETING COVER SHEVitr

MEETING DATE:

September 26, 2014

DATE DELIVERED:

September 19, 2014

AGENDA ITEM NO.:

13

CAPTION:

Project No. 36234 - Advanced Metering

System Low-Income Program.

ACTION REQUESTED:

Discussion and possible action with respect

to Staff memorandum.

Distribution List: Commissioners' Office (9) Lloyd, Brian Whittington, Pam Phillips, Michael Central Records Rogas, Keith (2) Younger, Joseph (5) Journeay, Stephen Renfro, Mike Tietjen, Darryl (2) Long, Mick (2) Smyth, Scott (2)

Gonzales, Adriana (if rulemaking)

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Donna L. Nelson Chairman Kenneth W. Anderson, Jr. Commissioner Brandy D. Marty Commissioner Brian H. Lloyd Executive Director Rick Perry Governor "'Pr t.^ ^ =J r =.• ^ ^ ^ s. .q

Public Utility Commission of Texas

Date: September 19, 2014

To: Chairman Donna L. Nelson

Commissioner Kenneth W. Anderson, Jr. Commissioner Brandy D. Marty

From: Katie Rich, Infrastructure and Reliability Division Shelah Cisneros, Legal Division

Subject: September 26, 2014 Open Meeting, Item No. 13 - Project No. 36234 - Advanced

Metering System Low-Income Program (Discussion and possible action)

Staff and interested parties have been engaged in an extensive process to develop a program to distribute in-home monitors (IHMs) to low-income customers in order to implement the terms of the Commission's advanced metering system (AMS) Orders.' The purpose of this memorandum is to provide a status report to the Commission on the parties' progress in developing an IHM distribution program for low-income customers for AEP Texas Central Company and Texas North Company (collectively, AEP); CenterPoint Energy Houston Electric, LLC (CenterPoint); Oncor Electric Delivery Company LLC (Oncor); and Texas-New Mexico Power Company (TNMP) (collectively, TDUs) pursuant to these AMS Orders.

Staff is pleased to report that the TDUs, other interested parties to the AMS Orders, and Staff have developed an implementation plan that will reimburse retail electric providers (REPs) for providing programmable communicating thermostats (PCTs) and in-home display (IHD) devices to their low-income customers that request these devices. Staff will file the plan in each of the AMS dockets by November 14, 2014. Staff will also conduct a public workshop to discuss the implementation plan on October 9, 2014. The TDUs will be prepared to implement the plan in January 2015.

` See Oncor Electric Delivery Company LLC's Request for Approval of Advanced Metering System (AMS)

Deployment Plan and Request For Advanced Metering System (AMS) Surcharge, Docket No. 35718, Order at 14-15

(Aug. 29, 2008) (Oncor AMS Order); Application of CenterPoint Energy Houston Electric, LLC for Approval of

Deployment Plan and Request for Surcharge for an Advanced Metering System, Docket No. 35639, Order at 18-19

(Dec. 22, 2008) (CenterPoint AMS Order); AEP Texas Central Company and AEP Texas North Company's Request

for Approval of Advanced Metering System (AMS) Deployment Plan and Request for AMS Surcharges, Docket No.

36928, Order at 21-23 (Dec. 17, 2009) (AEP Texas AMS Order); and Texas-New Mexico Power Company's Request

for Approval of Advanced Metering System (AMS) Deployment and AMS Surcharge, Docket No. 38306 Order at

17-18 (July 11, 2011) (TNMP AMS Order); (collectively, AMS Orders).

® Printed on recycled paper An Equal Opportunity Employer

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The AMS Orders contemplated that parties, under Staff's leadership, would develop a consensual plan to implement the low-income provisions in the Commission's AMS Orders. Consistent with the process envisioned by the AMS Orders, therefore, Staff is providing the Commission with an update on the progress towards the consensual implementation of the Commission's AMS Orders. Staff would note that the Commission need not take any action at this point in time.

The AMS Orders, with the exception of the TNMP, provide that if parties are unable to reach agreement or a dispute cannot be resolved, the matter or dispute "will be brought to the Commission for resolution in the project that has been established." However, Staff, the TDUs and other interested parties to the AMS Orders have worked diligently and cooperatively on developing an agreed approach that will hopefully avoid parties bringing any disputes over the implementation plan to the Commission through the process established in the AMS Orders.

1. Background

As part of the Commission's approval of each TDU's AMS deployment plan and the surcharge for recovery of costs associated with this deployment, the Commission issued the AMS Orders requiring the parties to establish programs for the distribution of IHMs to eligible income customers.2 The specific wording in the AMS Orders varies with respect to the low-income provisions.3 However, all of the orders use the definition of low-income customer set forth in P.U.C. Substantive Rule 25.5. The orders for Oncor, CenterPoint, and AEP also all state that "[t]he goal of the program is to maximize the comprehensive, cost-effective distribution of the in-home devices, including training and education, to the greatest number of eligible low-income customers."4

The following amounts, with the exception of TNMP, were included in the forecasted costs for AMS in calculating the AMS surcharges:

• Oncor - $10,000,000; • CNP - $7,500,000; • AEP TCC - $800,000; • AEP TNC - $200,000; and • TNMP - $125,000.5

2 The AMS Orders were filed as follows: August 29, 2008 for Oncor; December 22, 2008 for CenterPoint; December 17, 2009 for AEP; and July 11, 2011 for TNMP.

3 The orders for Oncor, CenterPoint, and AEP are similar with respect to the low-income provisions, whereas the order for TNMP overall contains less detail.

Oncor AMS Order at 15; CenterPoint AMS Order at 19; and AEP Texas AMS Order at 22.

5 In Docket No. 38306, TNMP agreed that it would make IHMs available to low-income customers. TNMP

is not required to begin deployment of IHMs until the fourth year of its AMS deployment (2015). The Commission did not include a specific amount for IHMs in the order approving TNMP's surcharge. TNMP has informed staff that it plans to expend up to $125,000 on the program.

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The orders for Oncor, CenterPoint, and AEP also state that following the filing of the order or approval of the stipulation, "a project will be established and a series of workshops will be held ["if needed," in the case of the AEP order] to reach a consensus to design and implement the low-income provisions" of the order or stipulation. These orders go on to state that, under Staff leadership, the group will use its best efforts to finalize the plan, within 120 days after the filing of the order in the case of Oncor and CenterPoint and within two years after the filing of the order in the case of AEP. Although not required by the AMS Orders, a coordinated implementation plan for all of the TDUs is being developed, which Staff believes will maximize the effectiveness of the program and minimize administrative expenses.

As required by the AMS Orders, Staff initiated this compliance project in 2008 in order to develop the implementation plan for the distribution of IHMs to low-income customers. The following parties have participated in the development of the implementation plan and were signatories to the settlements in the AMS dockets: Staff, the TDUs, the Office of Public Utility Counsel (OPUC), the Alliance for Retail Markets (ARM), the Texas Energy Association for Retail Marketers (TEAM), Reliant Energy Retail Services, LLC, and TXU Energy Retail Company LLC (collectively, the implementation group).

Staff caused to be issued notices and conducted public workshops with regard to the AMS low-income program in 2009 and 2010. Through the implementation group's deliberative process and in light of the stated goal of the AMS Orders of "[maximizing] the comprehensive, cost-effective distribution of the in-home devices, including training and education, to the greatest number of eligible low-income customers," the implementation group deferred implementation of the program until the advanced meters were largely deployed and the technologies for IHMs developed further.

With the AMS deployments largely complete and the IHM technologies having developed considerably,6 the implementation group began again working in earnest on the implementation plan. The AMS Orders "anticipated that a variety of distribution channels and methods may be used," and parties in the implementation group considered various options. The implementation plan provides for the distribution of IHMs through REPs providing IHMs to their customers, with reimbursement of costs by the TDUs. The REPs have existing relationships with their customers and have a ready means of identifying their customers who are eligible for the AMS low-income program. Under the AMS Orders, the definition of "low-income customer" in P.U.C. SUBST. R. 25.5 is used for the AMS low-"low-income program. The definition of "low-income customer" in P.U.C. SUBST. R. 25.5 is also the definition used to establish eligibility for the low-income rate reduction program funded by the system benefit fund fee (SBF).7 The TDUs also have existing relationships with the REPs through the provision of retail delivery service to the REPs, which involves billing the REPs, the provision of AMS data

6 Deployment of advanced meters was largely completed as follows: July 2012 for CenterPoint, December 2012 for Oncor, and February 2014 for AEP, for a combined total of approximately 6.62 million meters. As of August 31, 2014, TNMP had deployed 167,401 advanced meters out of its total scheduled deployment of approximately 200,000, and is scheduled for completion of advanced meter deployment by the end of 2016.

7 See P.U.C. Subst. R. 25.454 (addresses the low-income rate reduction program, including the "LITE-UP

Discount").

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to the REPs, and various other activities. The distribution of IHMs through REPs providing IHMs to their customers, rather than the use of other types of entities to distribute IHMs, avoids administrative complexities as well as privacy issues related to the identification of customers who meet the definition of low-income under P.U.C. SUBST. R. 25.5.

II. Implementation Plan

As discussed above, Staff, the TDUs, and other parties in the implementation group worked cooperatively to develop an implementation plan in compliance with the Commission's AMS Orders. The implementation plan focuses on three broad areas: (1) the types of IHMs eligible under the program; (2) the manner in which such devices will be distributed and distributing parties may receive reimbursement; and (3) reporting. Although the implementation group has not finalized the plan, the following summarizes the framework developed by the implementation group with regard to these three issues.

Types of IHMs

• In-home displays (IHDs) and programmable communicating thermostats (PCTs) that meet certain technical specifications (collectively, devices) are eligible IHMs.

Distribution and Reimbursement

• Any REP may participate, subject to program requirements.

• REPs can contact their eligible customers to offer an IHD and/or a PCT. REPs may give customers the option of selecting both a PCT and an IHD, and with both devices customers can receive the complimentary benefits of the two devices. PCTs offer a range of functionality including monitoring and controlling the air conditioning load in the home. IHDs display and analyze overall home consumption.

• REPs will provide customers receiving devices information on the use, functionality, and benefits of the devices.

• A TDU will reimburse a REP for the cost of a device up to a cap of $250, with an additional 25% for administrative costs, for a total reimbursement rate cap of $300 per device. For PCTs, an additional $125 will be reimbursed to cover the cost of installation.g

• The TDUs will reimburse REPs after processing the invoices and supporting documentation, including attestations that the customers are eligible to receive the devices under the program.

Reporting

8 The installation reimbursement rate takes into account that the installers may encounter electrical issues in older premises.

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• Reporting requirements will be developed to provide useful information about the implementation of the program.9

III. Next Steps

Staff has scheduled a public workshop for October 9, 2014. The workshop will enable stakeholders who did not participate in the implementation group to ask questions and make suggestions concerning the implementation plan. In addition, it will enable the implementation group to work towards finalizing the implementation plan for filing by November 14, 2014. The implementation group has further agreed that the program can be implemented in January 2015.

Given the anticipated January 2015 implementation for the program, Staff will provide a report on the operation of the program to the Commission by the fall of 2015.

IV. Conclusion

Signatories to the settlements in the AMS dockets have worked cooperatively and extensively to develop an AMS low-income program that best meets the objectives of the AMS Orders. Staff believes that the parties will be able to finalize the implementation plan in the coming weeks in order for the program to begin in January 2015.

9 Under the AMS Orders, Oncor, CenterPoint, and AEP were required to file monthly deployment plan progress reports. Now that deployment for these utilities is complete, annual reports are filed. TNMP's deployment is not complete; therefore, TNMP continues to file monthly reports, pursuant to its AMS Order and P.U.C. SUBST. R. 25.130(d)(9).

References

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