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Pa. Committee Chair Says PUC's Proposed Assessment Mechanism Would Make Non-Residential Suppliers Subsidize Residential Suppliers

March 1, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Pennsylvania PUC's proposal to base new assessments on retail electric and natural gas suppliers based on a supplier's gross intrastate revenues would, "likely result in suppliers who serve large industrial and commercial customers subsidizing those suppliers whose load consists primarily of residential customers," State Rep. Robert Godshall, Majority Chairman of House Consumer Affairs Committee, said in a letter to the PUC.

"Based upon the number of consumer complaints filed with the Commission in January and February of last year, and the Commission's rulemakings on switching times and customer disclosure requirements, it seems that much of the Commission's work related to suppliers involves ensuring that residential and small business consumers are (1) educated on the terms of their supplier contract and (2) able to more quickly switch suppliers or return to default service in the event they are unhappy with their service and (3) able to seek PUC assistance in resolving service complaints. The Commission's costs should be allocated in a manner that reflects this. It seems inherently unfair to lump the Commission's regulatory costs related to suppliers who primarily serve residential and small business consumers into a single large 'supplier' pot and allocate these costs among suppliers who primarily serve large industrial and commercial customers," Godshall said.

"The larger load profile of EGSs and NGSs who serve large industrial and commercial customers likely results in higher intrastate revenues for those suppliers; to have these suppliers pay more than their fair share of the Commission's regulatory oversight costs based solely on their intrastate revenues, will result in these suppliers effectively subsidizing those suppliers whose load profile consists of residential and small business customers. Such a result cannot be allowed as it will clearly and substantially distort the prices suppliers can offer to these customers," Godshall said.

"Many of the comments filed by interested stakeholders at this docket suggest further classification within the Commission's billing/tracking system to identify whether employees are working on a supplier issue involving residential/small business or industrial/commercial consumers or to identify individual suppliers; this suggestion seems reasonable and should result in fees to EGSs and NGSs that are based on the actual costs incurred by the Commission to oversee suppliers who provide the same kind of service and/or serve the same class of customers. Any calculation method that does not take into account the actual time spent by Commission employees overseeing an individual supplier or supplier load profile will, arguably, not meet the "reasonable cost basis" requirement of Act 155," Godshall said.

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