4103

STANDARD OFFER SERVICE RETAIL RATES

4103.1

The retail rates to SOS customers of the Electric Company will consist of the sum of the following components:

(a) The seasonally-differentiated and, if applicable, time-of-use differentiated load weighted average price of all awarded contracts for Wholesale Full Requirements Service for each SOS Customer Group;

(b) Retail charges designed to recover, on an aggregate basis, FERC-approved Network Integrated Transmission Service charges (“NITS”) and related charges and any other PJM charges and costs incurred by the Electric Company directly related to the Electric Company’s SOS load obligation for each SOS Customer Group. According to Commission Order No. 12395 and the PEPCO/Conectiv merger Settlement Agreement, the Electric Company has agreed to accept a “transmission deadband” which would adjust transmission and distribution rates so that the overall rates remain constant, unless transmission rates increase or decrease more than ten (10) percent. Any future increase in transmission rates will be constrained by the “transmission deadband” provision approved in Order No. 12395;

(c) An administrative charge; and

(d) Applicable taxes.

4103.2

When the winning wholesale bidder(s) are selected, the Electric Company shall submit to the Commission (1) the names of the winning bidders, which shall remain confidential subject to Section 4110.5 of this chapter, and (2) the retail rates for all the customer classes according to the Commission pre-approved time schedule. Such rates shall consist of all the components included in Section 4103.1. The filing required herein shall also include (1) a detailed calculation and explanation of an administrative charge and (2) administrative charge true-up provisions.

4103.3

Parties to the proceedings can file comments within seven (7) days calendar days and reply comments within 12 calendar days of the Electric Company’s submission of the retail rates and administrative charge pursuant to Section 4103.2. The Commission shall thereafter issue an Order approving or rejecting the retail rates and/or administrative charge. The Electric Company shall file a revised tariff setting forth the new retail rates and/or administrative charges within seven (7) calendar days of the Commission’s Order approving those rates and charge.

4103.4

The Administrative Charge will be designed to recover the Electric Company’s

incremental costs for procuring and providing the service. Actual incremental costs shall include, but not be limited to, a proportionate share of SOS customer uncollectibles for each SOS Customer Group, Commission Consultant expenses (as described in Section 4108.2), wholesale bidding expenses, working capital expenses related to SOS for each SOS Customer Group, wholesale supply transaction costs related to wholesale supplier administration and transmission service administration, wholesale payment and invoice processing, incremental billing process expenses, customer education costs, incremental system costs, and legal and regulatory filing expenses related to SOS requirements.

4103.5 Prior to the submission of bids, the Electric Company shall file a request with the Commission (with notice to all the Parties) for determination of the appropriate amount of its Administrative Charge to be included in the retail rates to SOS customers. In calculating the Administrative Charge, any return component on the Administrative Charge, if the inclusion of a return component is approved by the Commission, shall not be reflected for ratemaking purposes in the establishment of the Electric Company's distribution rates, including the determination of the Electric Company's return for providing distribution service.

4103.6 All customers eligible for SOS will be informed of the applicable SOS retail rates, to the extent practical, for the service at least two (2) months prior to the beginning of each service year. If it is not practicable to provide such notice, the Electric Company shall file with the Commission and serve upon the Parties notice of that fact, the reasons for the delay, and the expected date for the provision of such information.

4103.7 Retail prices to customers shall be adjusted at least twice a year to reflect seasonal pricing and other appropriate price changes. Prior to each year of SOS, the Electric Company shall file with the Commission, estimates of actual incremental costs for the upcoming year. Such costs will be collected from customers, on a load weighted average, subject to an annual adjustment to reflect actual costs.

4103.8 All investment, revenue and expenses associated with the provision of SOS by the Electric Company shall be separate from investment, revenues and expenses associated with the Electric Company's distribution service so that there will be no subsidization of the Electric Company's distribution rates.

Source: Final Rulemaking published at 56 DCR 5404, 5408 (July 3, 2009).