Mississippi Administrative Code › Title 39 - UTILITIES › Part 1 - PUBLIC UTILITIES RULES OF PRACTICE AND PROCEDURE › Chapter 29 - Integrated Resource Planning and Reporting › Rule 39-1-29 › Section 39-1-29- 107 - Annual Energy Delivery Plan

Current through June 25, 2024
All regulated gas and electric utilities shall report to
					 the Commission annually on their efforts to improve energy delivery, through
					 modernization of existing infrastructure, improvements to lower energy delivery
					 costs (
e.g.
, by expanding access to supply alternatives or
					 relieving congestion in the delivery system), and/or through expansion of
					 energy delivery to additional customers.
Within sixty (60) days of the Commission's final approval
					 of this Rule, each utility subject to the provisions herein shall present for
					 Commission approval a proposed plan or schedule according to which the utility
					 will meet the reporting requirements of the Annual Energy Delivery Plan. At a
					 minimum, the Annual Energy Delivery Plan shall include the information
					 referenced in Subsections 1-6 below, and each utility's Annual Energy Delivery
					 Plan shall be reviewed by the Staff. If the Staff believes the use of
					 consultants is necessary or helpful in its review of a utility's Annual Energy
					 Delivery Plan, the utility shall be required to pay for the cost of such
					 consultants and allowed to recover said costs in rates.
1.
Demand Response and Energy
				  Efficiency ("Demand-Side Management")
a.
Design
Electric and Gas Utilities regulated by the Commission
					 shall implement a Demand Side Management ("DSM") Portfolio for customers that
					 is designed to achieve cost-effective energy and/or demand savings, considering
					 factors such as: quantifiable and achievable savings, customer reliability
					 benefits, cost effectiveness, rate impacts, and customer interest and
					 participation potential. The Annual Energy Delivery Plan shall include a
					 description of all programs in the DSM portfolio.
Well- designed DSM offerings provide opportunities for
					 customers of all types to adopt energy efficiency and demand saving measures to
					 increase control and provide greater opportunities to reduce their energy
					 bills. For purposes of this rule, demand-side management includes energy
					 conservation, energy efficiency, demand response, distributed energy resources,
					 and strategic load growth as specifically defined herein.
Energy conservation and efficiency may include educating
					 customers about practical tips and ideas to reduce energy usage (e.g.,
					 suggested winter and summer thermostat settings) and reducing the rate at which
					 energy is used by equipment and/or processes while maintaining or improving the
					 customer's existing level of comfort and end-use functionality. Such reductions
					 in energy usage may be achieved, for example, by substituting more advanced
					 technology or improving the thermal properties of a building. Energy
					 conservation programs can be included in portfolios of energy efficiency plans.
Demand response offerings lower peak demand. Options may
					 include direct load control efforts (
e.g.
, via air
					 conditioner cycling) and interruptible rates (providing rate discounts in
					 exchange for the right to reduce a customer's energy demand during a specified
					 number of hours each year coinciding with high energy demand and/or emergency
					 conditions). Distributed energy resources (
e.g.
, energy
					 storage) are another option.
Strategic load growth may benefit customers through
					 increased use of utility services resulting in potentially decreased customer
					 rates. Strategic load growth may occur as a result of new customers being added
					 to the utility's system (e.g., through economic development), or it may consist
					 of growth in the loads of existing customers (e.g., electric vehicles or
					 industrial electric process equipment that is more economical for a customer).
					 The purpose of strategic load growth programs should be to incentivize the more
					 efficient usage of utility infrastructure and resources. In order to ensure
					 that strategic load growth programs are beneficial to all customers and do not
					 conflict with energy efficiency policies established in this Rule, any
					 strategic load growth project or program shall require Commission approval.
Strategic load growth may also address the Commission's
					 statutory policy objective to foster, encourage, enable and facilitate economic
					 development in the State, and to support and augment economic development
					 activities, and to take every opportunity to advance the economic development
					 of the State. This may include the encouragement of universal access to utility
					 services through infrastructure expansion to areas that currently do not have
					 such services.
b.
Evaluation of Demand-Side Management Offerings
Cost-effectiveness tests measure and value the benefits
					 and costs of demand-side management investments relative to long-term supply
					 options. Evaluation of cost-effectiveness is only one aspect of long-term
					 integrated resource and energy delivery planning; enhancing reliability and
					 managing potential risks must also be considered in the planning process.
Electric and Gas Utilities must demonstrate that they have
					 evaluated the cost-effectiveness of their proposed demand-side management
					 investments at a portfolio level using at least three industry-accepted tests,
					 including the Total Resource Cost test and the Utility Cost Test, and provide
					 results of the analysis within the Annual Energy Delivery Plan filing. The
					 results of the analyses should also provide details on the reliability and risk
					 impacts of the utility's planned demand-side management investments.
Electric and Gas Utilities shall also include in their
					 Annual Energy Delivery Plans the inputs and assumptions used in their
					 cost-effectiveness analyses. The near-term and longer-term impacts on customers
					 and on utility financial integrity must be factored into the final decision to
					 proceed or not to proceed with any demand-side management investment.
c.
Cost Recovery for
				  Demand-Side Management
The primary goal of demand-side management is to defer or
					 avoid energy usage and for customers to achieve the concomitant savings without
					 requiring them to involuntarily sacrifice comfort or reliability, or accept
					 undue risks. Additionally, demand-side management can be useful in reducing
					 customer demands which, in the long run, may reduce or delay investments in
					 fixed costs needed to meet peak demands (e.g., generation, bulk transmission).
					 Further goals include providing new and innovative options to customers to help
					 meet their energy needs, mitigating environmental impacts, and fostering
					 increased modernization of the energy grid. The Commission recognizes and
					 accepts that this goal of avoiding energy usage, if not properly addressed, can
					 be detrimental to utilities and their owners under traditional cost-of-service
					 ratemaking, especially where utilities are adequately meeting their obligation
					 of producing low-cost, reliable energy services. For utilities operating under
					 formulary rate plans, reduced revenues resulting from energy efficiency
					 measures are already addressed in the existing plans. The Commission
					 recognizes, further, that accomplishing the goals of demand-side management
					 requires actions on the part of both the utility and its customers, which is
					 different from actions associated with a utility adding a new supply resource.
					 Therefore, utilities shall be allowed an opportunity to recover the reasonable
					 and prudent costs incurred by them in making demand-side management
					 investments, including, where applicable, an opportunity to earn a reasonable
					 return thereon.
In its Energy Delivery Plan, each utility may propose an
					 approach to earn a return on demand-side management investments in its Formula
					 Rate Plan in order to place such investments on more equal footing with other
					 supply-side resource and infrastructure investments on which utilities earn a
					 return. Each year, the utility shall identify in its Energy Delivery Plan the
					 specific demand-side management investments on which the utility seeks to earn
					 a return as well as the specific demand-side management costs the utility
					 intends to expense in the upcoming calendar year. The method reflected in the
					 Energy Delivery Plan shall also be reflected in each utility's annual Formula
					 Rate Plan filing and subject to approval by the Commission as part of the
					 annual Formula Rate Plan review.
Demand-side management investments may include, but are
					 not limited to, equipment, incentives and rebates, marketing and delivery,
					 direct installation costs (including plumbing installations), and any
					 administration costs. Incentives may include information, technical assistance,
					 leasing programs, product promotions and direct financial inducements.
					 Financial inducements may include, but are not limited to, rebates, discounted
					 products and services, appliances and alternative financing arrangements. Any
					 financial inducements undertaken by a utility intended to be reflected in the
					 utility's rates, must be incorporated under and meet the cost effectiveness
					 requirements described in this rule.
Utilities may also propose a mechanism to adjust budgets
					 and cost recovery to respond to customer demand, to take advantage of market
					 opportunities, to deal with oversubscriptions and to avoid stop-start funding.
Cost recovery should be addressed in each utility's
					 formula rate plan and demand-side management expenditures, including any
					 prudently incurred over or under recovery of actual expenditures in an annual
					 period, may be allowed in the formula rate plan test year.
Every three years, unless modified by the Commission, the
					 Staff may review and comment on the cost recovery approach(es) utilized by each
					 utility with respect to demand-side management investments and expenditures.
Third-party evaluation, measurement and verification
					 ("EM&V") shall not be required where the utility offers to provide its
					 analyses used in evaluating demand-side management investments to the Staff and
					 any public witnesses in conjunction with the Evaluation of Demand-Side
					 Management Offerings. Where a utility chooses not to make its analyses
					 available, the utility shall contract with an independent third-party vendor to
					 conduct EM&V, utilizing accepted industry standards, and shall file the
					 report of the third- party vendor with the Commission. If Staff believes the
					 use of consultants is necessary or helpful in its review of a utility's
					 EM&V analyses, the utility shall be required
to pay for the cost of such consultants and allowed to
					 recover said costs in rates.