Opinion ID: 406396
Heading Depth: 3
Heading Rank: 2

Heading: Evidence in Support of the Demand Ratchet

Text: 33 FERC approved the demand ratchet for the partial requirements customers because 34 On the basis of the record in which both CL&P (Connecticut Light) and the staff have demonstrated some need for the 100% demand ratchet for cost recovery, we shall permit the Company to include this provision in its partial requirements rate. 35 Opinion No. 114, J.A. at 835-36. The Commission in addition noted that both staff and the Company had relied on the ability of partial requirements customers to utilize their own generating facilities and reduce their amounts of peak demand. Id. at 835. 36 Evidence in the record, although somewhat sketchy, supports this contention. The Company submitted evidence to show that load shapes of the wholesale customers paralleled those of the system as a whole, which bolsters the contention that it will be beneficial to the Company to encourage the customers to decrease their amounts of peak demand. J.A. 77-78 (Rebuttal Testimony of Richard Brown). A Company witness testified that the ratchet was needed to encourage the customer to define how much of its demand will occur at times of peak usage. J.A. 176 (Testimony of Richard Brown). 14 A staff witness also testified that the ratchet was warranted for the partial requirements customers, who can plan to reduce their demands at the system peak, unlike the full requirements customers for whom the ratchet was disallowed. J.A. 276-77 (Testimony of James Gilliam). 15 The possibility that the partial requirements customers might utilize alternative power sources was not a mere hypothetical; the Company described in detail the variety of sources available in New England, where power is in oversupply. J.A. 86-88. CMEGA did not reply to this testimony. Finally, although CMEGA suggests the hypothetical of a partial requirements customer with a high noncoincident peak, J.A. 181, it gives no examples of customers who might be expected to bear more than their fair share of demand costs because of the operation of the ratchet. Indeed, the similar climate of the area served by the Northeast system suggests that all of the wholesale customers will have load shapes parallel to the system as a whole, J.A. 199; and record evidence suggests that the ratchet will not substantially redistribute among customers the burden of meeting Connecticut Light's demand costs. J.A. 70. 37 We conclude, therefore, that there is sufficient record support for the determination that the ratchet would prove useful in encouraging reductions in demand at the time of the system peak, when the burden on the system capacity is the greatest. Moreover, it also appears from the record that the ratchet will not redistribute costs unfairly. 16 FERC's decision to approve the ratchet for the partial requirements customers was reasonable, and we affirm. 38