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Pa. PUC Denies OSBA Request to Require Direct Energy to Seek Approval of Pike County Pricing

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October 15, 2010

The Pennsylvania PUC denied, 4-1, the Office of Small Business Advocate's request for rehearing of the PUC's decision allowing Direct Energy to retain, without affirmative action by the customer, the customers it currently serves under the aggregation program at Pike County Light & Power if those customers do not select a return to default service or another supplier (P-2008-2044561).

OSBA had petitioned the PUC to require Direct Energy to provide the OSBA, the Office of Consumer Advocate, and the PUC with its projected prices and pricing methodology which will take effect at the conclusion of the aggregation program.

"The OSBA has presented a novel request for relief in which it seeks the opportunity to challenge a market-based rate offered by a licensed EGS [electric generation supplier].  However, the OSBA has failed to support that request with any statutory citation or other reference which suggests that we have the authority to compel an EGS to seek our prior approval of a market-based rate," the PUC said.

"Such a remedy is completely at odds with the basic competitive retail market structure mandated by Chapter 28 of the Code, 66 Pa. C.S. §§ 2801 - 2812.  The simple fact is that should Direct Energy choose to offer competitive service at an excessive premium, customers are free to seek alternative offers or move to Pike's default service," the Commission added.

"Additionally, on September 23, 2010, the Commission adopted revisions to the Interim Guidelines for providing notice to customers in advance of a change in terms of service or the expiration of a contract for electric generation ... One of the issues addressed by the revisions was the effect on a customer's existing contract with a supplier when the customer does not respond to a contract renewal notice.  We note here that, just as any other EGS, Direct Energy is expected to abide by the Interim Guidelines when dealing with its customers," the PUC added.

"We note with approval Direct Energy's offer to provide, on a confidential and restricted basis, its pricing methodology and an indicative price to the OSBA and OCA similar to the manner in which such information was provided during the Aggregation Program.  We encourage Direct Energy to follow through on that offer, but we will not require it.  Consistent with our view that we lack the statutory authority to 'approve' a competitive rate offered by an EGS, it is doubtful that there is any authority to direct an EGS to reveal its pricing to the OSBA and the OCA in advance of a public offer to customers," the Commission said.

Vice Chairman Tyrone Christy dissented, but a statement was not available yesterday, and Christy did not discuss the dissent at yesterday's meeting.

   
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