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Pennsylvania Posts Discussion Draft for End-State Default Service Model
March 5, 2012
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Copyright 2010-
The Pennsylvania PUC has posted a Staff discussion document concerning possible end-state designs of default electricity service.
The discussion document (linked here) was posted in advance of the previously reported March 21 en banc hearing concerning the retail markets investigation, and participants are invited to comment on the various proposals at the hearing.
Under Model A in the Staff Discussion Document, default service would be provided to non-shopping and returning customers on the basis of real-time/hourly locational marginal prices and an administrative adder. Prices would change monthly (or more frequently) and not be reconciled.
Model B would involve default service being provided to non-shopping and returning customers on the basis of prevailing market prices, as established through an index, auction or other acceptable method. Prices would change quarterly or semi-annually and not be reconciled.
Model C would mirror the existing framework of providing default service to non-shopping and returning customers at a price that is compliant with 66 Pa. C.S. §2807(e)(3.1)-(3.4). Prices would change quarterly or semi-annually, reconcilable on a twelve-month rolling basis.
The three models set forth in the Staff Discussion Document contain the following common elements:
• Date certain of June 1, 2015
• Electric distribution companies (EDCs) in a provider of last resort role, providing backstop service in the event of the default by a default service provider
• Two-year product
• Uniform statewide approach
• Heightened technical and financial fitness standards for EGSs in the default service provider role
• Availability of supplier consolidated billing and third party billing
• Metering by EDCs
• Universal service customers served by EDCs
• Purchase of receivables programs handled by the billing entity
• PJM settlement functions performed by EDCs
• Act 129-energy efficiency programs carried out by EDCs
• Address issues concerning long-term contracts under the Alternative Energy Portfolio Standards Act
• Net metering customers served by EDCs, or in the alternative, address the need for EGSs in default service role to offer net metering arrangements
• PUC assessments paid by both the EGSs and EDCs or paid only by the EDC and recovered through non-bypassable surcharge
• Review and evaluation by July 2016
Staff envisions that these models would require varying degrees of statutory, regulatory and system changes, and expects to fully address those issues after selection of a model by the Commission, as necessary. Additionally, Staff recognizes that various permutations exist of each of these models, and that all of the models would require certain issues to be addressed, such as consumer protections and long-term contracts for alternative energy credits
Email This StoryCopyright 2010-
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