HB 470 — AN ACT TO AMEND TITLE 26 OF THE DELAWARE CODE RELATING TO PUBLIC UTILITIES AND BATTERY ENERGY STORAGE SYSTEMS.

Osienski HOUSE& OFRep. REPRESENTATIVES 153rd GENERAL ASSEMBLY HOUSE AMENDMENT NO.

3Heffernan TO& HOUSERep. BILL NO.

470Minor-Brown AMEND& HouseSen. Bill No.

470Walsh byReps. deleting lines 7 and 8 in their entirety and inserting in lieu thereof the following:

“energyCarson, fromCollins, theYearick, gridHarris andHOUSE dischargingOF itREPRESENTATIVES at153rd aGENERAL laterASSEMBLY time.HOUSE BILL NO.

U-BESS470 isAN notACT consideredTO generationAMEND orTITLE a26 generationOF unit.”.THE DELAWARE CODE RELATING TO PUBLIC UTILITIES AND BATTERY ENERGY STORAGE SYSTEMS.

FURTHERBE AMENDIT HouseENACTED BillBY No.THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

470Section by1. deleting lines 33 through 46 in their entirety and inserting in lieu thereof the following:

“c.Amend § 1001, Title 26 of the Delaware Code by making deletions as shown by strike through and insertions as shown by underline as follows:

DP&L§ may,1001. after appropriate review and approval of the Commission, own and operate U-BESS.

TheDefinitions. Commission’s review shall include a determination of cost-effectiveness measured by whether the U-BESS are prudent and provide net value to ratepayers.

IfAs U-BESSused arein approved,this costschapter, shallunless be distributed among the entirecontext DP&Lotherwise Delawarerequires: customer base in a manner prescribed by the Commission.

To(28) mitigate“Utility anybattery costenergy shiftsstorage system” or negative“U-BESS” impactsmeans onequipment ratepayers,or DP&Lsystems shallowned makeand bestoperated effortsby toa maximizepublic allelectric applicableutility valuewhich streamsequipment’s fromprimary anyfunction U-BESS,is includingto participatingparticipate in allwholesale availableenergy PJM Interconnection markets andby utilizingstoring itsenergy U-BESSfrom tothe realizegrid potentialand savings,discharging includingit anyat applicablea taxlater credits.time.

AfterU-BESS approvalis ofnot anyconsidered U-BESS,generation DP&Lor shall submit to the Commission, on a schedulegeneration determinedunit bynor theis Commission,it reportsconsidered containingdistribution informationor prescribeda bydistribution theunit Commissionunder tothis determinetitle. the effectiveness of the U-BESS, including benefits and revenue generated.”.

SYNOPSISSection This2. amendment to HB 470 does the following:

(1)Amend Clarifies§ the1008, definitionTitle 26 of athe utilityDelaware batteryCode energyby storagemaking system.deletions as shown by strike through and insertions as shown by underline as follows:

(2)§ Requires1008. any approval to include consideration of cost-effectiveness.

(3)Duties Removesof costelectric recoverydistribution languagecompanies. more favorable to Exelon shareholders than Delmarva Power customers.

(4)(a) AddsEach languageelectric providingdistribution thatcompany costshall recoverymaintain shallits befacilities inand aprovide mannerproducts approvedand byservices thewhich Commissionare fromsafe, theefficient, entiresufficient, DP&Ladequate, customerand base.reliable.

(5)Each Requireselectric Delmarvadistribution Powercompany shall implement procedures to submitrequire reportsall detailingelectric costsuppliers effectiveness.to deliver energy to the electric distribution company at locations and in amounts which are adequate to meet each supplier’s obligations to its customers.

(b) (1) The Commission is hereby granted the authority to require DP&L subject to its jurisdiction to develop and implement demand-side management programs designed to reduce overall electricity consumption by its customers and/or to reduce usage by customers during peak periods, such as time of use rates, advanced metering infrastructure, central air- conditioning and hot water heating cycling off and on programs, interruptible rates, etc.

However, in no such instance shall electric distribution companies subject to the Commission’s jurisdiction be authorized to implement peak time billing.

Upon development of such demand-side management program or programs, DP&L shall file such program or programs with the Commission for the Commission’s review and approval.

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The costs that DP&L incurs in developing and implementing their demand-side management programs, as well as the costs incurred by DP&L in administering all demand-side management programs approved for implementation by the Commission, shall be included and recovered in DP&L’s distribution rates.

b.

By June 5, 2006, the Commission shall open a docket to evaluate the desirability, feasibility and cost effectiveness of requiring advanced metering technology, including time of use metering to be utilized throughout or selectively in the service territories of DP&L.

The Commission may require that such a technology be deployed in a cost effective manner after such evaluation has been made and hearings have been held.

As part of the evaluation, the Commission shall review all customer pricing implications of any particular metering technology investigated.

The Commission shall not authorize such technology to be deployed in a manner that permits 30-day peak demand billing except as approved by the General Assembly.

c.

DP&L may, after appropriate review and approval of the Commission, own and operate utility battery energy storage systems.

On an annual basis, DP&L may petition the Commission for approval of a proposed rider applicable to all of DP&L’s U-BESS portfolio, which is comprised of all DP&L’s U-BESS with a collective capacity of 10 MW or greater.

Upon a finding by the Commission that the proposed rider is in the public interest, the Commission shall enter an order approving a surcharge that authorizes DP&L to recover the prudent and reasonable costs that DP&L incurs for the development, construction, ownership, operation, and maintenance of its U-BESS portfolio.

At a minimum, the rider shall recover the U-BESS-related overall cost of service-based revenue requirements including a return on rate base, operating, depreciation, and tax expenses, with the U-BESS- related wholesale energy market revenues lowering the U-BESS-related revenue requirement for the benefit of DP&L’s customers.

The U-BESS-related return on equity shall be no less than the return on equity approved in DP&L’s most recent electric base rate case.

To mitigate any cost shifts or negative impacts on ratepayers, DP&L shall make best efforts to maximize all applicable value streams from any battery energy storage systems, including participating in applicable PJM Interconnection markets and utilizing its battery energy storage systems to realize potential savings, including any applicable tax credits.

c.