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When customers leave Electric Choice for any reason and come back to Detroit Edison bundled or regulated rates, they "return to Full Service."
Rules regarding return to Full Service are found in the Retail Access Service Rider, Section 5., Term, Commencement of Service and Return to Full Service. In general, these rules address:
- Electric Choice "minimum term."
- Notice of Intent to Return to Full Service during summer months-with binding 12-month commitment. This formal notice must be provided to Detroit Edison by December 1 each year, for the following summer.
- Return to Full Service-without binding 12-month commitment. Customers who do not provide the December 1 notice will be asked to specify their return option:
- Option 1-12-month commitment
- Option 2-Short-term full service
The minimum term is two years for customers who elect choice as of November 24, 2004, or later. November 24 is the date of the final order in the Electric Rate Case, U-13808. Customers who were in choice as of November 23, 2004, were "grand fathered" with a one-year term.
"Notice" refers to the new December 1 notice requirement, specified by the MPSC in its Final Order in the Main Electric Rate Case, U-13808:
"…a customer shall provide Detroit Edison with notice no later than December 1st if the customer will be taking Full Service from Detroit Edison during the following summer. For this purpose, summer means regularly scheduled billing periods beginning June 1st through September 30th. (RAST §5.3.1 Return to Full Service).
The MPSC stated "the utility needs some reasonable horizon to allow it to plan for the needs of its customers. The critical timeframe relates to the summer peak demand season." Planning for summer generally takes place in the winter months.
Detroit Edison will implement this notice requirement by mailing all Electric Choice customers a "Return to Service" form approximately 60 days prior to the annual deadline. Signed and returned forms from customers constitute "Notice."
"Binding 12-month commitment" means that the customer who provides the December 1 notice is obligated to return to Detroit Edison in the month specified by the customer, and the customer must stay on Full Service rates for 12 months. This means a customer cannot switch to an AES until they have been on Full Service rates for 12 months.
A customer may revoke or amend their Return to Service form prior to the December 1 deadline. No changes can be made after that date.
A customer who is planning to return after December 1 of the current year but before October of the following year, should submit the notice by December 1 to avoid being charged higher prices on return to Full Service.
Option 1 and Option 2 are two different ways customers-who return to Full Service without providing the December 1 notice-may choose to take Detroit Edison full service.
- Option 1 is a 12-month service commitment. A customer who fails to remain on Full Service for 12 months will be back-billed for the higher of the tariff energy rate or market-based rate (Market Priced Power charge, or MPP).
- Option 2 is Short-term Full Service. In this case, customers "pay as they go" for the ability to return to Electric Choice before 12 months of Full Service. For example, a customer's AES contract ends March 15. The customer returns to Full Service until April 15, at which time the customer contracts with a new AES. The customer pays bundled tariff and one month of MPP for the right to switch again.
Customers who submit the Return to Service form don't have to choose Option 1 vs. Option 2, since they are committed to 12 months on full service under the terms of the Return to Service notice they provided.
The Market Priced Power Charge is a Michigan Public Service Commission (MPSC)-approved customer charge designed to compensate Detroit Edison for accommodating customers who need to return to Detroit Edison Full Service without adequate notice, or on a temporary basis, less than 12 months. The MPP charge represents Detroit Edison's incremental cost to serve these returning customers.
Customers who return from choice to Detroit Edison Full Service may be subject to MPP if they return…
- For summer, without providing the prior December 1 notice
- For less than 12 months and then return to choice
- Before completion of their Electric Choice two-year minimum term
Yes. See Section 5.3, Return to Full Service.
MPP Charges will be assessed as follows:
- MPP will appear as a taxable line item charge on your electric bill, representing the difference between the energy cost in bundled rates and market prices. If market prices are lower than the energy cost in the bundled rates, no MPP charge will be assessed.
- MPP charges will be in addition to the regular charges of a Full Service rate, i.e., Business Electric, etc.
- During the summer billing months-June 1st through September 30th-customers who returned without the December 1 notice will pay "the higher of (energy cost in rates or MPP) plus 10 percent." The 10 percent adder for summer months is specified in the Retail Access Service Rider §5.3.1.
- For customers who return without meeting the Electric Choice minimum two-year term: MPP will be charged until such time as the minimum two year commitment has been met, for all power taken from the utility. For example: a customer spends six months on choice and returns to Full Service. That customer would pay MPP for as much as 18 months for any power taken from Detroit Edison. (24 - 6 = 18).
The Market Priced Power Charge is an average market price calculated for the customer's individual billing month on an after-the-fact basis, using published hourly market prices for the Michigan energy market.
For any short-term Full Service bill period where the average market price of power (in ¢/kWh) is greater than the energy portion of the Full Service rates, the customer pays the difference for all kWh used in that period.
Average Market Price in ¢/kWh
minus Detroit Edison energy cost in ¢/kWh
equals Billable Market Price Power Surcharge in ¢/kWh
Then: Billable MPP ¢/kWh X bill period usage = MPP charge for the period. For example, for a customer who uses 4,500 kWh in the month:
Average Market Price 3.95 ¢/kWh
minus Detroit Edison energy cost --- 1.90 ¢/kWh
equals Billable Market Price Power Surcharge 2.05 ¢/kWh
Then: Billable MPP charge is 2.05¢/kWh X 4500 kWh usage = $92.25 .
The published index prices are the DECo.nec Loadzone hourly prices, tracked and published by the Midwest Independent System Operator (MISO).
These prices are posted each day to the MISO Web site, under Market Reports\Historical LMPs.
The charge appears as the following line item:
Market Priced Power Adjustment $xxx.yy
A "Drop" order is the mechanism that terminates Electric Choice service. (A Drop order can be initiated by a customer, AES or Detroit Edison.) When a "Drop" is received, Detroit Edison sends notices to the customer and the AES informing them when the "Drop" will be effective. This letter also explains return to service rules and the MPP charge, as provided in case U-13808.
In addition, each fall Detroit Edison will notify all Electric Choice customers about the December 1 notice deadline for return to Full Service during the following summer months.