This paper details alternatives but is not meant to take a position on the viability of using load profiling. This paper does not represent the positions of the parties who contributed to this paper.
Load Profiling and Forecasting:
There are two possible options for serving smaller customers:
To use of load profiling, there must be a non-controversial method for forecasting load, estimating actual use, and assigning actual use to each hour of the billing period. The method should not lead to cost-shifting between or within classes or customers served by different suppliers.
In order to implement this option, there would need to be a tool that would forecast load day-ahead and hour-ahead for each group of customers. The tool, which would use the weather forecast, would be used by the utilities to provide the load profile for each customer rate schedule by region and amperage of service. Because the tool would be highly litigated, it would probably not be possible to develop it for more groups than are currently considered in cost allocation proceedings. The tool would also be used to determine an after the fact load estimate.
The UDCs would provide an initial load forecast for each rate schedule, by region, and by amperage to be used by suppliers to arrange for electricity in the day-ahead market. The forecast would be adjusted for the hour-ahead market based on more current weather information. After the day ended, the UDC would use actual weather data to provide an estimate of actual hourly use. These actual use estimates would be recorded and the sum for the billing period would be compared to the actual aggregate use for that billing period. All hours would be adjusted on a percentage basis to correct for any differences. Settlements would be based on the revised estimates of actual hourly load.
Load profiling does not allow a customer to receive an advantage for demand-side management. If a supplier or customer wants to reap the benefit of shifting load based on spot price, an interval meter would have to be installed.
Settlements:
Day-ahead nomination versus actual supply/deliveries: Supplier would have discretion over its nomination but a forecast would be provided by the UDC.
Hour-ahead versus actual supply/deliveries: Same as above.
Real-time use versus supply/deliveries: Real-time use would be the revised estimate of actual hourly load detailed above and supply would be actual supply.
The forecast/estimate of actual could be expressed as an hourly usage for each hour in the day, for each rate schedule, for each region, for each service amperage, for each MW of annual demand.
Franchise Fees/Taxes:
The UDC would continue to collect franchise fees and utility user taxes as they do currently, unless a customer choose a self-payment option. The UDC would calculate the tax based on its cost of electricity to its customers in the relevant class. If a direct access customer elected, the customer could calculate the taxes/fees and remit the fees on its own. However, the default would be that the customer paid through the UDC and have a line item on its bill for the amount. If a customer elected to pay the fees directly, the UDC would inform the customer of the payment calculation procedure, and send a letter to the appropriate government entities stating that the customer would be paying directly. In order to pay the fees directly, the customer would have to sign a waiver allowing the government entities to receive monthly use information from the UDC on request.