Nashville Electric Service has an energy efficiency program rider (Schedule EE) that's supposed to be revenue-neutral but I think they're overcollecting. The tariff shows $0.00187/kWh but my calculations based on their reported program costs suggest it should be $0.00134/kWh. That's a 40% overcharge affecting every customer. Has anyone else audited utility energy efficiency riders for proper cost recovery calculations?
NES energy efficiency rider calculation error
Paula, JEA's energy efficiency rider had similar issues in 2015. They were including administrative overhead that should have been in base rates, plus they were using projected costs instead of actual expenditures. The Florida PSC made them true-up with customer credits totaling $890K. Check if NES is including non-program costs in their rider calculation.
I audited PSO's energy efficiency charge last year and found they were double-recovering certain costs through both base rates and the rider. The Oklahoma Corporation Commission requires detailed annual filings showing exactly how these riders are calculated. Paula, request NES's cost-effectiveness filings from the Tennessee Regulatory Authority - should show the backup math.
Duke Energy Ohio got caught doing this exact thing in 2014. Their EE rider was collecting 30% more than actual program costs. The PUCO ordered refunds plus they had to implement quarterly true-ups going forward. Paula, check if NES is using a balancing account or if overcharges just flow to their bottom line. That makes a big difference in how aggressively the regulator responds.
Kentucky Power had a similar overcollection issue with their DSM rider. The problem was they were using stale cost data from their initial program filing instead of updating for actual costs. Their rider stayed at the original level for three years while actual program spending was 25% lower. The PSC finally caught it during a rate case audit. Paula, when was NES's rider last adjusted?
Mike, that's exactly what I found! NES's energy efficiency rider hasn't been updated since 2013 when they filed their first EE program. They've been collecting based on projected costs of $12.4 million annually but actual spending has averaged only $8.9 million. The excess is going straight to earnings. Filed a complaint with TRA yesterday demanding a true-up and refunds dating back three years.
Georgia Power's EE rider had the same problem - projected vs actual cost disconnect. The Georgia PSC made them establish quarterly reconciliation filings and refund $2.7 million in overcharges. Paula, your TRA complaint should reference the Georgia precedent. These utilities love to set riders based on optimistic spending projections then pocket the difference when actual costs are lower.
CenterPoint Energy down in Texas tried something similar with their energy efficiency cost recovery factor. They were collecting based on budgeted program costs but spending 40% less on actual programs. The Railroad Commission ordered refunds and required monthly reporting going forward. Paula, definitely push for enhanced reporting requirements in your complaint.
FirstEnergy's Ohio utilities got nailed for the same thing in 2015. Their EE riders were overcollecting by $15 million annually because they never trued up actual vs projected costs. The PUCO required immediate refunds plus ongoing quarterly reconciliations. Paula, how responsive has TRA been to your complaint? They're usually pretty good about policing these adjustment mechanisms.
Frank, TRA opened a formal investigation last week! They're requiring NES to provide detailed cost justification for the rider going back to 2013. Preliminary review suggests overcharges could total $6.8 million system-wide. TRA staff mentioned this could set precedent for other Tennessee utilities with similar riders. Sometimes it pays to be the squeaky wheel.
Paula, excellent work! Connecticut had a similar TRA-style investigation of United Illuminating's energy efficiency charge in 2014. UI had to refund $4.2 million and implement monthly cost tracking. Your case could help customers nationwide if it establishes stronger oversight requirements for EE riders. Keep us posted on the investigation results.
Outstanding detective work Paula! This is exactly the kind of systematic overcharge that hurts customers across entire utility territories. These energy efficiency riders are spreading like wildfire and most lack proper cost controls. Your TRA investigation could become a model for other states. I'd love to see the final settlement terms when this wraps up.