STATE OF ILLINOIS
ILLINOIS COMMERCE COMMISSION
Illinois Commerce Commission
On Its Own Motion
-vs-
Commonwealth Edison Company
Reconciliation of revenues collected under power procurement riders with actual costs associated with power procurement expenditures.
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10-0275
ORDER
By the Commission:
The Illinois Commerce Commission ("Commission") entered an Order (“Initiating Order”) commencing the instant reconciliation proceeding. Among other things, the Initiating Order found that Commonwealth Edison Company (“ComEd”) “shall reconcile revenue collected under each of the . . . tariffs [named therein], or under related provisions filed pursuant to the orders cited and authorizing the recovery of power supply costs for the reconciliation period [of June 1, 2008 through May 31, 2009], with costs incurred in connection with procurement activities as defined in the tariffs of each utility.”
Pursuant to due notice, hearings were held in this matter before a duly authorized Administrative Law Judge of the Commission at its offices in Springfield, Illinois. Appearances were entered by respective counsel for ComEd and the Commission Staff ("Staff"). Evidence was presented by ComEd and Staff, and at the conclusion of the hearings, the record was marked "Heard and Taken." An “agreed to” draft order was filed by ComEd, following a review by Staff.
Background
As explained in the Initiating Order, the final order entered on January 24, 2006 in Docket No. 05-0159 approved, with modifications, the initial series of tariffs under which ComEd would purchase and deliver electricity to its customers following the January 1, 2007, expiration of the mandatory rate freeze.
Among the approved tariffs were Rider CPP, Competitive Procurement Process; Rider PPO-MVM, Power Purchase Option (Market Value Methodology); and Rider TS-CPP, Transmission Services (Competitive Procurement Process). The retail charges computed in accordance with these three riders applied to service provided on and after 10-0275
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January 2, 2007, and all three riders required annual reconciliation proceedings, as provided for in the January 24, 2006 Order.
The three riders were later superseded, in part, by Rider AAF--Accuracy Assurance Factor, and through revisions to Rate BES-H--Basic Electric Service-Hourly Energy Pricing, which were approved by the Commission in an order entered on December 19, 2007, in Docket Nos. 07-0528 and 07-0531 (Cons.).
Rider AAF took effect on February 13, 2008, and was applicable to full-requirements electric supply procurement through May 31, 2008. The revisions to Rate BES-H also took effect on February 13, 2008. In accordance with those revisions, ComEd began including transmission and supply administration costs and revenues in the calculation of the Hourly Purchased Electricity Adjustment Factor (“HPEA”) for the November 2007 determination period, which were reflected in the bills for hourly customers beginning with the March 2008 billing period. Rider AAF and Rate BES-H similarly provided for annual reconciliation proceedings.
Prior Reconciliation Case; Instant Proceeding
The initial reconciliation of revenues collected under power procurement riders with actual costs associated with power procurement expenditures, which covered the period of January 2, 2007 through May 31, 2008, was the subject of a reconciliation proceeding and Order in Docket No. 09-0080. An Order in that proceeding was entered December 2, 2010.
In the instant case, Docket No. 10-0275, the Initiating Order directed ComEd “to present evidence to show the reconciliation of revenues collected under the respective tariffs with costs incurred in connection with proper procurement activities as defined in the tariffs of each utility, all as is more fully described hereinabove” for the reconciliation period of June 1, 2008 through May 31, 2009. Additionally, ComEd was ordered to include a schedule presenting cumulative totals of incremental costs and cumulative totals of recoveries, by customer class, to the extent such information is reasonably available.
As explained in the Initiating Order in Docket No. 10-0275, Rider AAF, referenced above, was superseded by Rider PE beginning with the June 2008 determination period, as reflected in the bills for October 2008. Rider PE calculates one Purchased Electricity Adjustment (“PEA") Factor, applicable to all customers served under Rate BES--Basic Electric Service. Rider PE also requires a yearly reconciliation. Effective January 15, 2009, Rate BESH, Basic Electric Service Hourly Pricing, replaced Rate BES-H.
ComEd was also ordered to provide for the correction of any accounting errors that might have occurred in the application of the provisions of Rider AAF and Rates BES-H and BESH.10-0275
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Rider PE and Rates BES-H and BESH
As explained by ComEd witness Mr. Waden, ComEd presented a reconciliation of revenues during the reconciliation period for: (i) its Purchased Electricity Adjustment Factors (“PEAs”) under ComEd’s Rider PE – Purchased Electricity (“Rider PE”) and (ii) its Hourly Purchased Electricity Adjustment Factors (“HPEAs”) under Rate BESH – Basic Electric Service – Hourly Energy Pricing (“Rate BESH”). (ComEd Ex. 1.0, 1.1, and 1.2)
The PEAs pertained to full requirements electric supply purchased by ComEd for customers in the “blended” segment, as described in Rider PE, and for which the applicable period is June 1, 2008, through May 31, 2009. The HPEAs pertained to electric power and energy directly procured by ComEd for customers taking service under ComEd’s bundled service tariff with hourly pricing for the period June 1, 2008, through May 31, 2009. (ComEd Ex. 1.0 at 1-2)
As indicated in the Appendix to this Order, customers in the Blended segment were residential retail customers; lighting retail customers; and nonresidential retail customers in the Watt-Hour and the Small Load Customer Groups, taking service under the then effective Rate BES - Basic Electric Service.
Customers in the Hourly segment were nonresidential retail customers in the Self-Generation and the Competitively Declared Customer Groups not taking service under Rate RDS – Retail Delivery Service with electric power and energy provided by Retail Electric Suppliers (“RESs”); and retail customers in other customer supply groups that elected to take service under Rate BESH – Basic Electric Service Hourly Pricing.
Customers in the Annual segment were nonresidential retail customers in the Large Load and the Very Large Load Customer Groups taking service under the then- effective Rate BES-NRA – Basic Electric Service-Nonresidential (Annual); and the Railroad Delivery Class taking service under Rate BES-RR – Basic Electric Service-Railroad. For the June 2008 through May 2009 reconciliation period, customers were no longer served under the Annual segment; the $218,279 remaining Annual regulatory asset was transferred to the Blended segment.
Mr. Waden described the operations relating to PEAs under Rider PE and HPEAs under Rate BESH. The PEAs and HPEAs were designed as part of Rider PE and Rate BESH so that the expenses ComEd incurred for the procurement of full requirements electric supply and directly procured electric power and energy, as required by retail customers for which ComEd was providing such supply, would equal the revenues from those retail customers for such supply based on changes in those customers’ actual usage and demands on ComEd’s system. (ComEd Ex. 1.0 at 5)
As provided in the tariff language of Rider PE and Rate BESH, an internal audit was conducted and a report that summarized the results of the audit was prepared and submitted to the Commission. (ComEd Ex. 1.0 at 5-6) That report was attached to Mr. 10-0275
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Waden’s testimony as ComEd Ex. 1.1, as was ComEd Ex. 1.2, which is the Supplemental Report Relating to the 2009 ComEd Purchased Electricity Cost Recovery Review. ComEd submitted a revised version of ComEd Ex. 1.2, Appendix 1, as ComEd Ex. 3.1 in response to a request by Staff witness Ms. Pearce. A copy of ComEd Ex. 3.1 is attached as the Appendix to this Order.
To calculate PEAs and HPEAs under Rider PE and Rate BESH, ComEd calculated the difference between revenues and expenses recognized associated with each product on a monthly basis. Any amounts that were over/under recovered in a given period were reflected in a subsequent period on customers’ bills, as applicable, and that any amounts that were credited to or recovered from customers were incorporated into the next applicable monthly calculation of the PEAs and HPEAs. At the end of any accounting period, ComEd recorded a cumulative regulatory asset (under-recovery) or regulatory liability (over-recovery) for each product offering. (ComEd Ex. 1.0 at 6)
Mr. Waden testified that ComEd did not inappropriately recover any of the same costs through charges in any other tariffs. According to the witness, the accounting and the process related to the PEAs and HPEAs, as well as the tariff provisions, prevented any such double recovery. (ComEd Ex. 1.0 at 7)
Section 16-115.5(l) – Implementation of or Compliance with Procurement Plan
Staff witness Ms. Pearce recommended that ComEd specifically address its compliance with the Commission-approved procurement plan under which costs were incurred and are reflected on the reconciliation for the year ended May 31, 2009, pursuant to Section 16-111.5(l) of the Public Utility Act (“Act”). (Staff Ex. 1.0 at 4-6)
Section 16-111.5(l) provides, in part, “A utility shall recover through the tariff all reasonable costs incurred to implement or comply with any procurement plan that is developed and put into effect pursuant to Section 1‑75 of the Illinois Power Agency Act and this Section, including any fees assessed by the Illinois Power Agency, costs associated with load balancing, and contingency plan costs. The electric utility shall also recover its full costs of procuring electric supply for which it contracted before the effective date of this Section in conjunction with the provision of full requirements service under fixed‑price bundled service tariffs subsequent to December 31, 2006. All such costs shall be deemed to have been prudently incurred.”
In response, ComEd witness Mr. McNeil testified that the costs reflected on ComEd Ex. 1.2 were incurred in compliance with the Commission approved procurement plan for the reconciliation period ended May 31, 2009 (the “Plan”). (ComEd Ex. 4.0 at 1)
By Order of December 19, 2007, the Commission approved the Plan with modifications. Mr. McNeil stated that ComEd filed a revised Plan in compliance with the Order on January 18, 2008. Mr. McNeil said the key components of the Plan are (1) the 10-0275
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selection of a Procurement Administrator, (2) the identification of pre-existing contracts for supply, (3) the determination of the amounts and method for procuring the residual requirements of energy, capacity and ancillary services for the eligible retail customers, and (4) the procurement of renewable energy resources. (ComEd Ex. 4.0 at 2)
As to the first component of the Plan, Mr. McNeil testified that ComEd selected National Economic Research Associates, Inc. (“NERA”) as the Procurement Administrator responsible for implementing portions of the Plan. The main responsibilities of the Procurement Administrator are to solicit, pre-qualify and register bidders, develop the standard supply contract and implement the competitive supply procurement process. (ComEd Ex. 4.0 at 2-3) ComEd worked with NERA, Commission Staff and the Procurement Monitor to develop the processes, rules, documents and contracts that were needed to procure these products in the manner set forth in the Plan. NERA received bids for the block energy products on March 5, 2008, and the winning bidders were approved by the Commission on March 11, 2008. NERA received bids for the RECs on April 23, 2008, and the winning bidders were approved by the Commission on April 28, 2008. (ComEd Ex. 4.0 at 4)
Regarding the second component, Mr. McNeil testified that there were two types of pre-existing contracts for energy, capacity or ancillary services that ComEd entered into pursuant to either a Commission order or a provision of law. First, pursuant to the Order in Docket No. 05-0159, ComEd entered into a number of Supplier Forward Contracts (“SFC”) with the winners of the 2006 Illinois Auction to supply capacity, energy and ancillary services to serve the full electrical requirements of the residential and smaller-than-400kW commercial and industrial customers. The SFCs in effect during the reconciliation period in the instant proceeding provided power and energy to supply about two-thirds of the load of these customers. Second, pursuant to Section 16-111.5(k) of the Act, ComEd entered into a five-year swap contract with Exelon Generation, LLC (“ExGen”). (ComEd Ex. 4.0 at 3) Thereafter, ComEd tracked compliance with the terms of the SFCs and swap agreement. (ComEd Ex. 4.0 at 5)
As to the third component of the Plan, Mr. McNeil testified that the Plan proposed the procurement of block energy products that varied monthly and by on-peak and off-peak time periods to meet the requirement of the Act that the portion of the utility’s load not supplied by pre-existing contracts was to be served pursuant to the procurement of standard wholesale products. To balance the portion of the load served by these block energy products, the Plan proposed to procure and sell energy in the PJM-administered spot markets. Similarly, he stated, the Plan proposed to procure the capacity and ancillary services not provided by the SFCs from the relevant PJM administered markets. (ComEd Ex. 4.0 at 3-4)
Thereafter, ComEd tracked that the appropriate amounts of energy were delivered by each supplier, and then paid the approved price to the supplier for this product. ComEd confirmed delivery through the PJM scheduling process at least one month prior to when energy began flowing for each month of the term. ComEd acquired balancing energy, capacity and ancillary services through the relevant PJM markets. 10-0275
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ComEd tracked that the appropriate amounts were obtained and then processed payment for these amounts. (ComEd Ex. 4.0 at 5)
With regard to renewable energy resources, Mr. McNeil testified that the Plan proposed to procure the required amounts of such resources through the procurement of renewable energy credits, or “RECs.” (ComEd Ex. 4.0 at 4) ComEd confirmed delivery of the appropriate amount of RECs from each supplier through the use of the PJM Environmental Information System Generation Attribute Tracking System (“EIS GATS”) or the MISO Midwest Renewable Energy Tracking System (“M-RETS”) certification systems. After deliveries were made and confirmed, ComEd made payments to the suppliers at the approved prices. (ComEd Ex. 4.0 at 5-6)
Administrative and Operational Functions
The Initiating Order stated, “Additionally, such reconciliation may provide for the determination of the reasonableness of the utility’s internal administrative and operational costs associated with the procurement of electric power and energy for retail customers served under Rates BES-H and BESH for the period June 1, 2008 through May 31, 2009 . . . .”
It is noted that the power procurement-related functions discussed above include administrative and operational activities performed internally by ComEd. The costs associated with these internal activities, and other costs that are not the direct costs of the supply itself, are discussed in more detail in the next section of this order.
ComEd witness Mr. McNeil testified that all of the administrative and operational costs were associated with the operations of ComEd’s Energy Acquisition Department, which at the time consisted of five groups: Procurement Planning and Strategy; Wholesale Billing and Credit; Wholesale Supplier Operations; Wholesale Markets and Development; and Electric Supplier Services. (ComEd Ex. 2.0 at 4)
The Procurement Planning and Strategy group is responsible for developing and advocating ComEd’s position in the annual procurement proceedings and fulfilling ComEd’s responsibilities in Illinois Power Agency (“IPA”) procurement events.
The Wholesale Billing and Credit group performed three primary functions: (1) validate PJM Interconnection, L.L.C. (“PJM”) invoiced charges to ComEd and initiate payments to PJM for confirmed services; (2) validate charges to ComEd from its wholesale suppliers, initiate payments for those deliveries, and manage all wholesale contracts; and (3) administer daily credit processes, including the determination of mark-to-market collateral requirements and the processing of collateral payments or instruments. (ComEd Ex. 2.0 at 4-5).
The Wholesale Supplier Operations group performs a number of daily functions, such as (1) validating individual retail customer enrollments for each retail electric supplier (“RES”) to assure that the daily load responsibilities of each RES are accurate; 10-0275
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(2) calculating individual retail customer Peak Load Contributions and Network Service Peak Loads and aggregating them by the responsible RES so that PJM can properly bill each RES; (3) submitting daily load bids for the retail load served by ComEd into the PJM day-ahead energy market; (4) forecasting RES hourly energy load serving responsibilities and monitoring RES estimates submitted to PJM to ensure good faith scheduling; (5) confirming scheduled physical deliveries by ComEd’s wholesale suppliers; and (6) performing the reconciliation of actual versus estimated supplier load responsibilities with PJM. (ComEd Ex. 2.0 at 5-6)
In the Wholesale Markets and Development group, the primary role is to calculate the hourly load of the ComEd Zone on a daily basis, which is the starting point for the allocation of load responsibility for the load-serving entities in the ComEd Zone. Mr. McNeil stated that the functions of this group are required solely for the purposes of fulfilling ComEd’s obligations to PJM as an Electric Distribution Utility. Mr. McNeil testified that there is no incremental work required in this group because of ComEd’s supply responsibilities to its retail customers; thus, none of the costs of this group were allocated to the administrative costs flowing to customers. (ComEd Ex. 2.0 at 6-7)
The main responsibility of the Electric Supplier Services group is to serve as the primary point of contact with RESs, including certifying new RESs and addressing RES issues. Additionally, the group processes customer enrollments with RESs as well as customer enrollments to ComEd’s hourly service; and provides historical customer usage data to market participants that have customer authorization to release data. (ComEd Ex. 2.0 at 7-8)
The Wholesale Markets Development, Wholesale Supplier Operations, and Electric Supplier Services groups report to a Director who oversees the work performed within these groups. Other departmental overhead costs in Energy Acquisition that relate to procurement administrative costs are those associated with activities performed by the Vice President of Energy Acquisition and his Administrative Assistant, as they spend a portion of their time working on procurement-related activities. (ComEd Ex. 2.0 at 8)
Mr. McNeil also described the methodology used to allocate the administrative and operational costs between Rider PE and Rate BESH. For each group (other than Wholesale Markets and Development), ComEd identified the primary work activities performed and the portion of the total time spent on each activity by its employees, and then assessed whether or not each activity was related to ComEd’s procurement responsibilities. ComEd considered whether the activity was necessary solely because of ComEd’s load serving responsibilities, or alternatively, if the function would have been required regardless of the load serving obligation.
Mr. McNeil said that most of the activities were a combination of these responsibilities. Thus, an estimate of time spent on each activity was made based on the incremental procurement-related work and then further split between how much of the activity related to serving the blended (fixed price) load versus the hourly load. 10-0275
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These time-weighted allocations were then rolled up at the group level and used to allocate both labor and non-labor costs associated with that group. Mr. McNeil also described the specific allocations that were made for each of the groups. (ComEd Ex. 2.0 at 9, 11)
Breakdown of Costs other than Direct Costs of Supply
Upon request (see ComEd Ex. 5.0 at 1-2), Mr. McNeil also provided, in supplemental testimony, information regarding the amount of administrative and operational costs that are involved in the procurement process. For the period June 1, 2008, through May 31, 2009, ComEd passed through to customers, pursuant to Rider PE and Rate BESH, $12,770,611 in administrative and operational costs, including $6,477,017 in auction-related costs. (ComEd Ex. 5.0 at 2; ComEd Exs. 5.1 and 5.2) In general, these are the costs that ComEd incurs in procuring power and energy to serve its customers, other than the direct costs of the supply itself (e.g., energy, capacity, ancillary services and transmission). These administrative and operational costs are associated with both internal and external activities. Mr. McNeil testified that ComEd has included in these costs the costs associated with the auction process that the Commission approved in Docket No. 05-0159 for the procurement of power and energy prior to the adoption of the IPA procurement process that is currently being used. (ComEd Ex. 5.0 at 3)
Mr. McNeil provided a general description and breakdown of the various categories of administrative and operational costs that ComEd incurred in procuring power and energy during the relevant period as reflected in ComEd Ex. 5.1. He stated that the Energy Acquisition Department Internal Costs are the internal costs, primarily consisting of labor, office space and equipment, incurred by ComEd’s Energy Acquisition Department. (ComEd Ex. 5.0 at 3)
Mr. McNeil stated that the Information Technology System Costs are the costs incurred to maintain and support the Retail Office (“RO”) software that is used by the Energy Acquisition Department’s Wholesale Supplier Operations, which is a standard industry wholesale settlements program that assists in the determination of the amount of load served by ComEd pursuant to Rider PE and Rate BESH. He said a portion of the RO costs that were flowed through Rider PE and Rate BESH for this period ($375,021) were previously approved in Docket No. 05-0597 where the Commission approved $1,381,800 of RO-related costs and approved the amortization and recovery of those costs over a five-year period. Since that proceeding, ComEd needed to revise RO in response to various PJM rule changes and, consistent with the approval in Docket No. 05-0597 and with standard accounting practice, ComEd capitalized those costs and has been amortizing them over a five-year period. (ComEd Ex. 5.0 at 3-4)
PJM Credit Costs represent the credit facility costs for the posting of PJM-required collateral for the load ComEd procures from PJM. The witness said the procurement of supply for period June 2008 through May 2009 – Compliance Filing Pursuant to the Commission’s Order dated December 19, 2007, requires ComEd to 10-0275
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procure the supply to balance the load of its fixed price customers directly from the PJM spot markets. ComEd also procures capacity, ancillary services and transmission to serve both its fixed-price and hourly customers from PJM. He stated that ComEd is not required to post collateral for the portion of its load related to the contracts for the block energy products, which are most of the energy that ComEd procures. (ComEd Ex. 5.0 at 4-5)
Renewable Energy Credits (“RECs”) Costs are associated with the certification and tracking services that were used to manage the REC contracts. As set out in the Procurement Plan, two services were used during this period to track RECs - the PJM Environmental Information Services Generation Tracking System and the MISO Midwest Renewable Energy Tracking System. (ComEd Ex. 5.0 at 5)
Mr. McNeil stated that the Procurement Monitor and Administrator Costs included costs directly associated with the payment of bills by ComEd for the professional services of a Procurement Monitor who was employed by Staff for the purposes of monitoring the fixed price procurement process. The costs also included costs for the services of the Procurement Administrator who was employed by ComEd to administer the procurement plan, which were recovered through the assessment and collection of fees on the suppliers. The amount of the fees collected slightly exceeded the actual costs incurred and that overcollection was passed on to customers. The amount of costs shown on ComEd Ex. 5.1 for Procurement Monitor and Administrator Costs include the costs related to both the first and second procurement plan proceedings, Docket Nos. 07-0528, 07-0531 and 08-0519. (ComEd Ex. 5.0 at 5-6)
Mr. McNeil stated that the costs for Professional Services for Auction Revenue Rights (“ARRs”) relate to PJM auctions of the right to transmit energy over the various paths that comprise its transmission system. In conjunction with this auction, PJM allocates to its transmission customers the right to receive some of the revenue from this auction if the customer has nominated the paths on the PJM transmission system from which it wants to receive the revenue. Because there are significant differences in the amount of revenue that PJM receives for each of the various paths, ComEd employs the professional services of an expert in this area to assist it with the nomination process. ComEd received over $4 million in auction revenues for the ARRs for which it incurred costs to nominate during the period covered by this proceeding, and both the costs of this service and auction revenues received were passed on to customers. (ComEd Ex. 5.0 at 6)
Mr. McNeil stated that the Professional Services Supporting the Supplier Forward Contracts Costs are the costs associated with the administration of a data room on the procurement website to provide to suppliers continuously updated information concerning the usage characteristics of ComEd customers in order to more accurately meet those customers’ supply needs. (ComEd Ex. 5.0 at 6-7).
Mr. McNeil stated that the First Procurement Plan Proceeding Costs are primarily the costs incurred in developing, obtaining approval for and implementing the new 10-0275
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procurement process that replaced the auction, as well as procurement-related costs that were incurred during this period and generally relate to issues that arose in administering existing supply and renewables contracts. These costs consisted largely of external legal costs and expert witness and consulting charges. Approval for the procurement plan and tariffs was obtained in Docket Nos. 07-0528 and 07-0531 and the plan approved in those dockets covered the period involved in this matter: June 2008 through May 2009. (ComEd Ex. 5.0 at 7)
The Second Procurement Plan Proceeding Costs are primarily the costs incurred in developing, obtaining approval for and implementing the second procurement event, covering the period June 2009 through May 2014, which was approved by the Commission in Docket No. 08-0519. These dockets also included procurement-related costs that were incurred during this period and generally relate to issues that arose in administering existing supply and renewables contracts and to the reconciliation process and proceedings. These costs were incurred over the period involved in this matter, i.e., June 2008 through May 2009, were passed through to customers as they were incurred, and consisted primarily of legal services from counsel external to ComEd, as well as expert witnesses and consulting charges. (ComEd Ex. 5.0 at 7-8)
Mr. McNeil provided a general description and breakdown of the auction-related costs that ComEd incurred and flowed through to customers during the relevant period as reflected in ComEd Ex. 5.2. Auction Process Approval Costs are the costs that ComEd incurred in obtaining approval for the auction process in Docket No. 05-0159, which consist largely of outside counsel legal fees and expert witness and consulting fees. He said the Commission approved recovery of these costs in that docket in the amount of $5,393,488 to be recovered over a three-year period, which began in January 2007 and ran through the end of 2009. The costs described as the Implementation and Defense of Order in Docket No. 05-0159 were for designing the auction process, developing the relevant documents and conducting the auction once the Commission approved the use of an auction to procure supply, as well as defending the Commission’s Order.
The FERC Auction-Related Proceedings costs are mainly outside legal costs associated with obtaining approval of the Federal Energy Regulatory Commission (“FERC”) for certain aspects of the auction process. The witness said the Auction Improvement Proceedings costs were all incurred participating in the proceedings initiated to consider how the auction process could be improved, Docket Nos. 06-0800 and 06-0624, and consist largely of outside legal fees and expert witness and consulting fees. The Preparation for Second Auction costs consist largely of the fees charged by the independent entity ComEd had retained in preparation for conducting the second auction, which was never held as the auction was replaced with the request for proposal process. (ComEd Ex. 5.0 at 8-10)
In response to a request from Staff, ComEd also offered into evidence two of ComEd’s data request responses, including supplemental responses, relating to the administrative and operational costs. (ComEd Exs. 6.0, 7.0)10-0275
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Breakdown of Costs and Recoveries by Customer Class
In the Initiating Order, ComEd was also directed to “include a schedule presenting cumulative totals of incremental costs and cumulative totals of recoveries, by customer class, to the extent such information is reasonably available.”
Mr. Waden testified that ComEd does not record or otherwise track cumulative totals of incremental costs and cumulative totals of recoveries by individual customer class or individual customer supply group. He further testified that this recording or tracking is not required by ComEd’s tariffs or business processes, and that the accounting at issue relates to the products, as reflected in ComEd Exhibit 1.2, Appendix 1, and in ComEd Exhibit 3.1. ComEd Ex. 1.2 provided breakdowns, for the reconciliation period, of revenues and expenses for the Annual, Blended, and Hourly segments with footnotes indicating which customer groups fell within each segment. According to Mr. Waden, a breakdown by individual customer class or individual customer supply group does not exist and it is not reasonably available. (ComEd Ex. 3.0 at 3)
The Commission finds that for purposes of this proceeding, the information provided was sufficient, and that a more detailed breakdown by customer class was not reasonably available within the meaning of the Initiating Order.
Commission’s Conclusions, Findings and Ordering Paragraphs
Based on the evidence presented, including the internal audit and supplemental report, the Commission finds that for the reconciliation period of June 1, 2008 through May 31, 2009, the reconciliation of revenues collected under the above-referenced procurement tariffs with actual costs incurred in connection with proper procurement activities as defined therein, as shown in the Appendix hereto, is accurate, and is hereby approved. The correct tariffs were applied, and, subject to the adjustments and refunds that were made, the charges were accurately calculated and collected.
With regard to the internal administrative and operational costs associated with the procurement of electric power and energy for retail customers serviced under Rates BES-H and BESH for the period June 1, 2008 through May 31, 2009, the Commission finds that such costs were reasonable.
For the reconciliation period, expenses were $3,414,395,776 for the blended segment and $172,180,484 for the hourly segment, totaling $3,586,576,260. Revenues were $3,357,040,000 for the blended segment and $178,270,070 for the hourly segment, totaling $3,535,310,070. After reflecting recoveries and other adjustments, the total under-recovery is $31,758,096.10-0275
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The Commission, having considered the entire record, is of the opinion and finds that:
(1) Commonwealth Edison Company is an Illinois corporation engaged in the transmission, sale and distribution of electricity to the public in Illinois, and is a public utility as defined in Section 3-105 of the Public Utilities Act;
(2) the Commission has jurisdiction over the parties and the subject matter of this proceeding;
(3) the statements of fact set forth in the prefatory portion of this Order are supported by the record and are hereby adopted as findings of fact;
(4) for the reconciliation period of June 1, 2008 through May 31, 2009, the reconciliation of revenues collected under the above-referenced procurement tariffs with actual costs incurred in connection with procurement activities as defined therein, as shown in ComEd Exhibits 1.1 1.2 and 3.1 and in the Appendix hereto, is accurate, and is hereby approved.
IT IS THEREFORE ORDERED that for the reconciliation period of June 1, 2008 through May 31, 2009, the reconciliation of revenues collected under the above-referenced procurement tariffs with actual costs incurred in connection with procurement activities as defined therein, as shown in ComEd Exhibits 1.1 and 1.2, as revised in ComEd Exhibit 3.1 and as shown in the Appendix hereto, is hereby approved.
IT IS FURTHER ORDERED that subject to the provisions of Section 10-113 of the Public Utilities Act and 83 Ill. Adm. Code 200.880, this Order is final; it is not subject to the Administrative Review Law.
By order of the Commission this 21st day of December, 2011.
(SIGNED) DOUGLAS P. SCOTT
Chairman
