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Citing Lack of Retail Supplier Interest, Pa. PUC Denies Rider for Small Utilities to Implement EDI

February 17, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Pennsylvania PUC has denied an application from Citizens' Electric Company and Wellsboro Electric Company to implement a nonbypassable rider to implement Electronic Data Interchange in the utilities service areas, to support electric choice.

The PUC cited, among other things, what it saw as a lack of retail supplier interest in serving customers at the small utilities.

The utilities had previously been granted a waiver from implementing EDI, but sought approval for implementation now based on increased supplier interest in serving customers at the EDCs, and because the utilities believed that implementation of EDI would remove a critical impediment to development of the retail market in their service territories, as the absence of EDI increases the EGSs' costs to serve accounts, which makes potential service to smaller commercial and residential accounts unprofitable

The utilities had estimated the total EDI project costs at approximately $882,250 and proposed a two-year cost recovery period and that the fixed nonbypassable rider would be $2.98 per customer per month, including Gross Receipts Tax

"Upon our consideration of the evidence of record, as well as the Exceptions and Replies thereto, we are persuaded by the arguments proffered by I&E and the OCA that non-bypassable surcharge recovery of the costs at issue here [EDI costs] is not just and reasonable based upon the unique situation that exists for these two jurisdictional electric utilities," the PUC said.

"While we commend Citizens and Wellsboro for being proactive in the initiation of this project in an attempt to enhance the competitive retail electric market in their service territories, we disagree that the estimated costs of this project are properly recoverable via the surcharge mechanism as they propose. Instead, we conclude that the nature of these estimated EDI costs would render them more properly recoverable via a general base rate increase request," the PUC said.

"We come to these conclusions for several reasons. First, as noted and admitted by the Companies, this Commission previously granted both utilities a waiver from our requirement that our jurisdictional EDCs implement and employ EDI software by no later than June 30, 2000. We granted the Companies' Petitions requesting such because of the Companies' small customer bases, the significant financial investment associated with implementation and the lack of EGS interest in serving in the Companies' service territories. As argued by both I&E and the OCA, in the intervening fifteen-year time period, not much has changed that would cause us to view this waiver any differently today. The customer bases of these two utilities have not substantially increased, the costs to implement EDI technology is potentially burdensome and little interest has been shown by EGSs in the Companies' service territories," the PUC said.

While the utilities one competitive EGS has begun marketing in Citizen's service territory, and that 76 larger customers of Citizens, or 1.1 percent of its total customer base, have enrolled to begin shopping as of June 1, 2014, the PUC found that, "Clearly, this is insufficient evidence of customer and EGS interest in the service territories of these EDCs to justify surcharge recovery of the significant costs at issue here."

"It is important to note that our decision not to provide for surcharge recovery of these projected EDI costs in this proceeding should not be interpreted in any way as not supporting Citizens' and Wellsboro in attempting to facilitate the competitive provision of electric generation service in their service territories. This Commission supports the overall objective to increase retail electric competition for all customers throughout the Commonwealth and we, therefore, encourage the Companies to continue their efforts and to seek recovery of these costs in a more appropriate proceeding. As such, we shall approve the adoption of the fixed CCSC [customer choice support charge] that will provide for recovery of other types of customer choice support costs that we may authorize in the future for collection through a fixed monthly charge for these Companies. As we are denying surcharge recovery of the estimated EDI costs at this time, however, the initial CCSC should be set at zero for both Citizens' and Wellsboro," the PUC said.

In an issue specific to Wellsboro only, Wellsboro had also sought authority to recover through the new nonbypassable customer choice support charge costs paid by Wellsboro to the PJM Interconnection, LLC (PJM) for sub-transmission facilities servicing the Company's territory that are not included in Zonal Network Integrated Transmission Service (NITS) rate (Penelec Facilities Charge)

The PUC approved this request, removing these charges from the bypassable Price to Compare, and including them in the nonbypassable Customer Choice Support Charge rider, with Wellsboro assuming responsibility for the charge for all delivery customers

Wellsboro had initially proposed that the Penelec Facilities Charge be set at $0.003709 per kWh.

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