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"Obvious" That Removing Utility From Default Supplier Role Requires Statutory Amendment
Amendments to Pennsylvania statute would "obvious[ly]" be required to remove the natural gas distribution companies from the default supplier role, the Energy Association of Pennsylvania said in comments to the PUC.
The comments were made in the PUC's natural gas retail market investigation, which is examining, among other things, alternative forms of SOLR service.
"It is obvious from [a] summary review of the statutory requirements surrounding SOLR [supplier of last resort] service that proposals to make substantial changes to this service, including removing NGDCs [natural gas distribution companies] from the SOLR provider role, will require a statutory amendment," the Energy Association of Pennsylvania said.
The Energy Association of Pennsylvania cited various statutory language, including a requirement for, "least cost fuel procurement policy, consistent with the utility's obligation to provide safe, adequate and reliable service to its customers," as well as the requirement for the PUC to hold hearings to review "supply plans" and "reliability plans" required under the statute.
ADVERTISEMENT To streamline the Commission's consideration of the retail natural gas market issues, and avoid a repeat of the tortured process endured in the retail electric market investigation, this statutory question should be immediately (after an expedited round of statute-specific comments) addressed by the Commission, through declaratory order, preliminary order, certified question, or similar administrative mechanism, so that the PUC's view on this statutory question is known, and parties seeking redress do not spin their wheels at the Commission for two years, when they need to be down the street at the legislature.
The PUC's authority to adopt changes to the design or structure of SOLR service is a threshold question which implicates the direction of the natural gas market investigation, and if the PUC agrees with the Energy Association of Pennsylvania's interpretation, the investigation can proceed more efficiently (on other matters over which the PUC does have authority) if such agreement is known now, rather than two years from now. Conversely, if the PUC feels statute allows some change to natural gas SOLR structure, that should be known now too (to be clear, we are not asking the PUC to certify that it has the authority to adopt one or more of several specific SOLR designs, but rather, that the PUC express its high-level view regarding its statutory authority to adopt changes, generically, to the current model).
While we understand that the Commission is in the business of making reasoned and considerate decisions based on a complete record, this SOLR statutory authority is a purely legal question which can be addressed through briefs, and has no need for evidentiary hearings or testimony. Moreover, this issue is hardly novel given the PUC's prior gas market investigations and certain individual NGDC cases (namely, PGW). Accordingly, we see no reason the PUC could not rule on the certified issue of its statutory authority to adopt changes in SOLR service and design within 60 days.
"It is also obvious that, from a policy standpoint, there are pros and cons to making such [SOLR] changes . It is possible that removing NGDCs from the SOLR role would stimulate a more active market with more suppliers entering the market and more innovative service offerings . However, the downside to such a policy change is also apparent- some customers may prefer having a regulated option available from the NGDC that allows them to not become involved in the market. The weighing of these considerations is a matter for the judgment of the Pennsylvania General Assembly," the Energy Association of Pennsylvania said.
Docket I-2013-2381742
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December 13, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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