Notice: Drafting of Open Access Distribution Service (OADS) Rules

Notice is hereby given that the Commission is in the process of drafting the rules that will set forth the terms and conditions for unbundled electricity service provided by distribution utilities (DUs). Relative thereto, the Commission would like to seek comments from interested parties on the intended subject matter to be covered by the said rules as well as the relevant timelines prescribed for its impelementation, as follows:

A.) Subject Matters to be Covered by the Rules:

1. Responsibilities of the Distribution Utilities;

2. Responsibilities of the Suppliers;

3. Responsibilities of Retail Customers;

4. Distribution Utilities (DUs) Services (including ancillary services);

5. Applicable Unbundled Charges (including nonrecurring charges);

6. Guidelines for the Standardization of Customer Classes;

7. Prescribed Treatment of Line Losses;

8. Alternative Billing and Settlement Arrangements;

9. Load Forecasting;

10. Scheduling;

11. Alternative Metering Arrangements;

12. Data Exchange Requirements;

13. Transmission Service Charges: Contractual Arrangements with the National Transmission Corporation (TRANSCO);

14. Contractual Arrangements within the Wholesale Electricity Spot Market (WESM);

15. Connection, Meter Deposit Charges; and

16. Dispute Resolution.

The proposed rules have previously been referenced in the Distribution Wheeling Rate Guidelines (“DWRG”) as the Open Access Distribution Service (“OADS”) Rules, which will include detailed service descriptions, and the terms and conditions of service for the following: distribution delivery service; distribution connection service; DU service to the captive market, and pass-through of TransCo service costs borne by the DU. Therefore, the rules will cover terms and conditions of service between the DU and end-use customers, between the DU and future competitive Suppliers, and between the DU and the provider of last resort.

The ERC will be working from the following conceptual framework when drafting the OADS Rules. At the present time, all retail customers of the DUs are in the captive market and the ERC has approved unbundled rates for service. At such time as the ERC declares open access and retail competition, licensed Suppliers will be free to conduct business and retail customers will fall into one of two categories: the captive market and the contestable market. An overarching objective that should govern the construct of the OADS Rules is the provision of DU services in a fashion that does not discriminate between the captive market and the contestable market, between customer classes within the captive market, or between the portion of the contestable market supplied by the DU and that portion supplied by competitive suppliers. The DU may be required to establish a separate division to handle supply to the customers within the contestable market who elect to continue service with the DU, and this contestable market division of the DU should be treated on terms similar to other Suppliers. Other competitive Suppliers will be able to compete for customers that are part of the contestable market but the DU continues to provide some services such as distribution delivery service to Suppliers and/or retail customers. A competitive Supplier is required to procure generation and handle other retail functions that fall under the supply service category. One issue that has not been addressed by the ERC is metering and whether metering should be treated as part of the supply function, the distribution function, or possibly outsourced to independent, third-party metering companies so as to prevent preferential treatment by Suppliers or the DU. The ERC encourages interested parties to comment on the subject of metering because this may affect the content of the OADS Rules. For example, if metering service within the contestable were to remain a regulated DU service, then the OADS should cover such service.

B. Targeted Timelines

January 5, 2005