PPL Transmission Cost Allocation  

Issue:

Although IECPA's members avail themselves of the competitive market in Pennsylvania for their generation supply, of particular and certain concern to IECPA is PPL's allocation of transmission costs among all of its customers, through calculations of Peak Load Contributions ("PLCs") and Network Service Peak Loads ("NSPLs"), respectively, on the basis of 5 Coincident Peaks ("CP"). Particularly as it relates to the allocation of transmission costs, IECPA is concerned that PPL's methodology, by not matching NSPL calculations to PJM Interconnection, LLC's ("PJM") absolute single coincidental peak, does not align the retail costs it recovers from its customers with the wholesale costs that PPL incurs for transmission on the PJM system. This makes it very difficult for customers to monitor and manage their peak consumption. Such management is critical not only to these customers, but it also provides an important peak reduction benefit to the entire PPL system.

IECPA Position:

IECPA recommends PPL modifying its retail calculation of customers' Network Service Peak Load ("NSPL") in order to reflect the single coincident peak ("1 CP") methodology used by PJM to allocate costs on the wholesale level to PPL.  IECPA believes that this modification would be more consistent with proper cost causation principles and would lead to a more uniform treatment of these costs throughout the Commonwealth, which in turn will support a more efficient and accurate retail competitive market.

Background:

IECPA intervened in the PPL Default Service Plan V ("DSP") case (P-2020-3019356) to address this transmission cost allocation issue: