Funding for Consumer Advocates
of the PJM States (CAPS)
MC webinar – October 19, 2015
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Our Role
∗ Even in vertically integrated states, a majority
of electricity costs are affected by decisions
made at PJM.
∗ Consumer Advocates represent end users
who, other than large industrial customers,
have no voice at PJM.
∗ Everyone benefits if Consumer Advocates can
provide an early, knowledgeable and
consistent voice for consumers within the
PJM stakeholder process.
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What is CAPS?
∗ CAPS is a non-profit organization made up of
offices from the PJM states and the District of
Columbia that are tasked by state law with
representing the interests of electricity consumers.
∗ CAPS funding supports the Consumer Advocates’
participation in the PJM stakeholder process with
staff dedicated to participation in PJM meetings
and travel by Consumer Advocates for PJM
meetings.
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The Benefits
∗ Consumer Advocates learn from the stakeholder
process so that they can take informed positions
and work for consensus.
∗ Other stakeholders learn about consumer
concerns and the reasons for Consumer
Advocates’ positions.
∗ This improves the chances for resolution at PJM
or, worst case, yields a narrower and betterinformed set of arguments at FERC.
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Temporary Funding
∗ Until we received temporary funding, Consumer
Advocates were mostly absent from the PJM
stakeholder process due to limited state resources
and travel restrictions.
∗ The Constellation Settlement in Docket No. IN12-7000 provided startup funds for the creation of CAPS
to coordinate Consumer Advocates’ involvement.
∗ With temporary funding, we have greatly increased
our presence and been able to advocate effectively
for all PJM consumers and participate more
effectively in the consensus process.
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Consumer Advocates of the PJM
States - Annual Budget
Category
Salaries & Fringes
Office Expenses
Travel & Meetings
Technical Consultants
Total
Amount
$210,000
$50,000
$125,000
$65,000
$450,000
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Our Request
∗ OPSI currently benefits from a fee charged on PJM
transactions. CAPS seeks a similar Tariff.
∗ Our proposed funding:
∗ Would only be charged to electricity consumers;
∗ Our projected annual budget of $450,000 would be fully
funded with a rate of $0.00000067/KWH;
∗ This amounts to approximately eight-tenths of a cent per
year for a residential customer using 1,200 KWH per year;
∗ Any funds in hand from the Constellation Settlement and
any secured through the Exelon merger will offset
subsequent Tariff collections.
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Timing
∗ We seek approval of this funding mechanism to
provide continuity and the ability to plan for the
long term.
∗ We continue to reach out to stakeholders to
educate them about the benefits of effective
Consumer Advocate participation and to seek their
support.
∗ We need to have the funding tariff in place for 2016
to ensure needed operations.
∗ We respectfully ask stakeholders to support our
proposed funding mechanism.
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The Consumer Advocates Have a
Strong Record as Reasonable, Constructive
Participants in the Stakeholder Process
∗ The Consumer Advocates have consistently
demonstrated a strong commitment to the
stakeholder process as preferable to litigation.
∗ The Consumer Advocates have participated in
good faith, committing to constructive,
negotiated resolution of regional issues such as
the ERPIV and Energy Market Offer Cap.
∗ With sector-weighted voting, Consumer
Advocates’ voting privilege typically does not,
by itself, change outcomes.
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Q. Is Funding Consistent with First
Amendment Considerations?
A. Yes.
∗ Many PJM members are funded directly or indirectly by
ratepayers. This does not result in compelled speech.
∗ FERC expressly rejected the First Amendment argument raised
when it approved OPSI’s funding. FERC Order on Funding
Mechanism for OPSI, ER06-78-000 and -001, Dec. 20, 2005, para.
40, fn.13.
∗ Far from compromising anyone else’s speech, funding only helps
ensure that all needed voices are heard. Consumers are a required
part of RTO governance, and FERC has recognized that resource
issues may present barriers to Consumer Advocate participation
that FERC may need to address. Order Accepting PJM Compliance
Filing, 133 FERC ¶ 61,071, Oct. 21, 2010, para. 38 and concurrence of
Chairman Wellinghoff at 2.
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Q. Will Consumer Advocate funding open the door to
other groups?
A. No.
∗ The Consumer Advocates have a unique role under state law.
∗ The Consumer Advocates have a unique role as recognized by
the PJM Operating Agreement.
∗ CAPS is an administrative body created solely to support
participation by state advocates and is not comparable to a
public interest organization or an affinity group.
∗ Consumer Advocate funding is essential for ensuring that the
stakeholder process works and the advocates have a
meaningful seat at the table. Everyone in the stakeholder
process benefits from the improved dialogue.
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Q. Are other Stakeholders Financially Harmed
When Consumer Advocates Have a Meaningful
Seat at the Table?
A. Unlikely and the impact is small.
∗ The proposed funding is only collected from load through
LSEs.
∗ Even in the short term, there is little risk that LSE’s will have to
“eat” a significant charge:
 The Consumer Advocates’ existing funds in hand will be
used before any money is collected from load under the
proposed tariff. That will be at least a year from now.
 Many contracts will be renegotiated before the tariff is fully
implemented.
 Some existing contracts allow the tariff cost to be passed
through even before renegotiation.
 The tariff amounts to just $0.00000067/KWH.
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Funding for Consumer Advocates is only
through a charge on energy to load
Will pay for CAPS
Operations
Load (LSEs)
✔
Generation
Transmission
Virtual Transactions
Ancillaries
Capacity
Will Not Pay
✔
✔
✔
✔
✔
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