PPL Electric here in Pennsylvania implemented their Smart Grid Infrastructure Rider (Rider C) last year and I'm having trouble understanding their cost allocation methodology. The rider is supposed to recover smart meter deployment costs but I'm seeing charges for IT system upgrades that seem unrelated. Has anyone successfully challenged infrastructure rider costs with the PUC? The monthly charge varies by rate schedule but the justification documents are vague.
PPL's Smart Grid Infrastructure Rider - Rate Schedule Rider C questions
Sylvia, we dealt with similar issues when CL&P (now Eversource) rolled out their smart grid rider in Connecticut. The key is demanding detailed cost accounting that separates actual meter costs from general system improvements. A lot of these riders become catch-all mechanisms for IT modernization that should be recovered through base rates. What's the dollar impact you're seeing?
Vince, it's about $850/month across my commercial accounts, but one manufacturing client is seeing $3,200/month on their Schedule GS-L service. The rider tariff says it's for "smart grid infrastructure deployment and related systems" - that "related systems" language is doing a lot of work. PPL's cost recovery filings mention cyber security upgrades and data management platforms that seem like general utility operations.
Alabama Power tried something similar with their Smart Grid Investment Recovery rider. The PSC initially approved it but we got the cyber security costs removed after showing they benefited the entire system, not just smart meter customers. The trick is proving the costs aren't "used and useful" for the specific purpose stated in the rider. File for a hearing - these things don't survive detailed scrutiny.
Down here in Florida, FPL's smart meter rider got challenged on similar grounds. The FPSC ruled that general IT infrastructure costs couldn't be recovered through a smart grid rider unless they were directly attributable to meter functionality. You need to request the detailed project accounting from PPL - they have to provide it under PA discovery rules.
Rosemary, that's exactly the precedent I need. Did FPL have to provide project-level cost breakdowns? I'm thinking about requesting all work orders and invoices related to the rider recovery for the past 18 months. If they're bundling general system upgrades with smart meter costs, the documentation should show it.
Idaho Power has a similar rider but they're more transparent about cost categories. They separate meter hardware, installation labor, communication infrastructure, and IT systems into different buckets with separate justifications. Sounds like PPL is being deliberately vague. Have you tried a formal data request through the PUC? Sometimes the threat of discovery gets them to be more reasonable about refunds.
Warren's right about the data request approach. CenterPoint Energy here in Texas had to refund $2.3 million in smart grid rider overcharges after the PUC found they were double-recovering certain costs through both the rider and base rates. The devil is always in the cost accounting details. Get the project ledgers and compare them to what's being recovered through other mechanisms.
Thanks everyone. I'm filing a formal complaint with supporting data requests this week. The timing is good because PPL just filed their annual rider update and the costs keep climbing. If the cyber security and data management costs are as questionable as I think, this could be a significant refund for multiple customers.
Sylvia, keep us posted on your results. OG&E here in Oklahoma is proposing a similar rider and I want to get ahead of any cost allocation issues. These infrastructure riders are becoming the new way utilities pad their revenue between rate cases. Your precedent could be helpful for challenges in other states.
Following up on Sylvia's case - Otter Tail Power in North Dakota just got their smart grid rider approved with much clearer cost categories after learning from challenges in other states. The key was requiring separate tracking accounts for each cost component. Utilities are definitely learning to be more careful about what they include in these riders.