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Pa. PUC Issues Guidelines for Release of Default Service Procurement Results

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October 18, 2010

The Pennsylvania PUC has endorsed "consensus" views regarding the release of electric default service procurement information.

"Since the results of default service solicitations have a direct effect on the prices non-shopping electric customers pay for the generation portion of their bill, the Commission recognizes the importance of consistency and transparency in the release of auction results and in the manner in which default service rates are calculated," the PUC said.

The Commission believes that all electric distribution companies (EDCs) should release, for each procurement class, the weighted average winning price for each individual solicitation of the following products:

• Full requirements (including the percentage of total load each full requirements tranche represents)
• Block
• Hourly
• Alternative energy credits
• Any other product types
   

The Commission further said that such releases should take place within a maximum of 15 calendar days from the closing of each solicitation, and shall adhere to this format on an ongoing basis.

The Commission requested that all distribution companies publish a default service rate calculation model.  The calculation model should clearly show the build-up, including formulas, of each individual component that translates an EDC's default service procurement class auction results into retail default service rates.  The calculation model should be labeled "for illustrative purposes only," since its purpose is to provide an explanation for retail rate translation.  

The calculation model is not meant to represent an official EDC estimate or projection for the Price to Compare (PTC).  The calculation model should contain an example of actual price translation so that interested parties can better understand the components and calculations used to establish default service rates, the PUC said. It should also be kept up to date and labeled for its pertinent time period, and should reflect the next default service rate time period rather than the present default service rate time period.  For example, for a quarterly changing default service rate, the calculation model shall represent quarter four during quarter three.  

"Lastly, the Commission urges each EDC to clearly explain the methodology used to project or estimate any updateable or variable costs that are components of the calculation model.  Such cost components may include, but are not limited to, spot market costs, capacity costs, network integration transmission charge costs, ancillary service costs, and administrative costs.  These explanations may be provided as an appendix to the calculation model, within a Frequently Asked Question (FAQ) section, or under another section of the EDC website related to the calculation model," the PUC said.

The Commission directed that the auction results and the calculation model should be posted on the EDC's website.  "These minimum requirements will further promote and sustain transparency amongst default service programs.  These requirements will also provide ratepayers, advocacy groups, electric generation suppliers, and the general public with pertinent information to form their own future PTC projections," the PUC said.

   
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