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Duquesne Light Seeks Approval for New Default Service Contracts Outside of New Default Service Proceeding

June 9, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Duquesne Light has sought Pennsylvania PUC approval to start obtaining default service supplies for the period after June 1, 2015 prior to the PUC acceptance of its separately filed default service plan for that period.

Specifically, Duquesne Light has applied for approval of procurements for residential and small C&I so that some of the supplies for the period beginning June 1, 2015 are purchased in the fall of 2014, rather than exclusively the winter and spring of 2015.

However, unlike a similar petition from PPL, Duquesne Light would not accomplish this solely by extending the end date of certain default service contracts already being procured under its previously authorized default service plan so that they overlap the new default service period (thereby utilizing previously approved procurements under a current default service plan and simply modifying the contracts' end dates to allow laddering).

Instead, for residential customers, Duquesne Light is seeking approval to hold an entirely new procurement solely for the purpose of supplying customers for the period after the end of its current default service plan (meaning for the period starting June 1, 2015), prior to the PUC adjudicating Duquesne Light's proposed default service plan for this period starting June 1, 2015.

Specifically, Duquesne Light is seeking to procure, in October 2014, 50% of residential default service supplies, under six-month contracts, for the period June 1, 2015 to November 30, 2015. As proposed in its pending default service plan for the period starting June 1, 2015, these supplies are scheduled to be procured in February 2015.

Notably, this newly proposed October 2014 residential procurement would not procure any default service supplies for the existing default service period, which ends May 31, 2015, and is therefore not an extension of an existing default service product to facilitate laddering.

Aside from hoping to receive quicker approval from the PUC in time to allow for the October 2014 procurement, we see no reason justifying Duquesne Light's proposal to adjust this proposed residential procurement date separately, rather than addressing it in Duquesne Light's default service proceeding for the period starting June 1, 2015. The residential request has no connection whatsoever to Duquesne Light's existing default service plan or portfolio, for which residential supplies have already been completely purchased, with no further procurements scheduled.

In contrast, for small C&I customers, Duquesne Light is proposing an extension of an existing default service product, and therefore, it makes sense to address the petition outside of the new default service case.

Specifically, for small C&I customers, Duquesne Light wants to extend, from 6 months to 12 months, the duration of small C&I default service contracts procured for the period starting December 1, 2014. Duquesne Light proposes to hold this procurement in October 2014, rather than November 2014 as originally contemplated under its current default service plan.

With such extension, these contracts would now cover 50% of small C&I default service for the period June 1, 2015, to November 30, 2015, replacing a proposed February 2015 procurement for such 50% of small C&I supplies for that time. The remainder of small C&I default service for this period would be procured in March 2015.

Duquesne Light said that its proposed changes to procure 50% of the June 1, 2015 to November 30, 2015 mass market supply in October 2014, "would eliminate the February [2015] procurement and reduce the exposure of a price spike during cold weather by avoiding the need to procure 100 percent of the default service supply during a short period of time."

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