DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott, Deputy Chief Financial Officer
COUNCIL DISTRICTS IMPACTED: Citywide
SUBJECT: Approval of a new CPS Energy product offering, the Resiliency Service Rider E21
SUMMARY:
The Resiliency Rider is a new product offering, designed to enable a cleaner and more economical alternative to diesel backup generators.
BACKGROUND INFORMATION:
The Resiliency Rider enables a new alternative for providing uninterrupted power for business customers. This Rider allows CPS Energy to provide value, align with community-partner business goals, and protect the community's investment in electric infrastructure. CPS Energy completed a pilot of the Resiliency Rider under the New Service Offering Tariff (Ordinance 2018-10-18-0836) and is now seeking City Council approval. The New Services Offering Tariff allows CPS Energy to pilot products in the market, testing and refining them before bringing them to Council for approval.
The Resiliency Rider will allow large commercial customers, particularly retail operations with potential food spoilage, to continue normal business operations during severe weather events and allow for CPS Energy to focus power restoration efforts to residential areas during weather events.
Currently, if a customer wants enhanced electrical reliability, they either pay CPS Energy to build dual electrical feeds or install on-site diesel backup generators. Both options are capital intensive and expensive.
With the Resiliency Rider, a 3rd Party will own, operate, and maintain on-site natural gas backup generators. When a local outage occurs, CPS Energy will use the generator to provide backup service to the customer. Additionally, when power supplies are short and ERCOT prices rise, the 3rd party will run the generators to sell power on the ERCOT market and CPS Energy brokers the power for the 3rd party. For the 3rd party operator, this helps to defray the cost of the backup systems and is part of...
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