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PUC Approves Duquesne Light Program To Rely On "Limited" Number of Retail Suppliers To Meet Default Service Time of Use Obligation

January 29, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Pennsylvania PUC approved as-filed Duquesne Light's proposed Time of Use program which would rely on service provided by retail electric suppliers as a means of complying with the statutory requirement to offer a TOU option to default service customers, but which limits the number of suppliers able to participate in the program

The EGS-offered TOU program at Duquesne Light will be for a 12-month term (June 1, 2016, through May 31, 2017), with a one-time customer enrollment window of June 1, 2016 through July 31, 2016. The program will only be open to residential customers

Retail suppliers may retain any customers enrolled in the TOU program at the end of its term, but may not impose a termination fee on such customers if customers later switch.

Suppliers may participate in the program via rate ready or bill ready billing.

For rate ready billing, only one EGS will be selected by Duquesne Light to participate in the program. For bill ready billing, Duquesne Light will permit up to three EGSs to offer TOU service to customers under the program

Duquesne Light will select the EGS to offer service under the program via RFP on the basis of lowest average weighted price.

Duquesne Light said that it is limiting the number of EGSs that can participate because if the number of customers who may agree to participate in the TOU program in 2016 is small, then these customers could be spread over multiple EGSs which may not provide statistically significant information to the utility that can be used in designing future programs.

For both the rate ready and bill ready program, the "Summer TOU" timeframe will be defined as the period of June 1, 2016 through September 30, 2016. During the period of June 1- September 30, 2016, an EGS must maintain the same On-Peak rate(s) it offers to customers throughout the term. One rate will be charged for all hours starting October 1, 2016, through May 31,2017.

Specific peak hours could vary based on whether the EGS is participating in the rate ready or bill ready program.

For the rate ready program, Duquesne Light will require that On-Peak hours be defined as 2-6 PM weekdays, excluding PJM holidays, between June 1 and September 30, 2016. Off-Peak hours will be all hours between June 1 and September 30, 2016, and all hours between October 1 and May 31 would be around-the-clock/Non-Summer hours. These hours will all be priced using a Seasonal rate. The Seasonal rate will remain the same from October 1 through May 31. There will not be any difference in the rate during this period for on-peak or off-peak hours.

For the bill ready program, EGSs have flexibility in defining specific peak hours. However, there will be a limitation that the on-peak hours must be within the 12-7 PM time period for all weekdays, excluding PJM holidays, between June 1 and September 30, 2016. The EGS must consistently apply the same on-peak hourly definition during the entire Summer TOU period. For example, Wednesday afternoon from 12-7 cannot be declared "off-peak," and weekends cannot be declared "on-peak." Off-peak hours are all hours between June 1 and September 30, 2016 that are not on-peak hours. Off-peak hours cannot be changed once established by an EGS.

Duquesne Light has said that it will provide a rate comparison website for customers to evaluate different rate options including default service.

If no approved EGSs submit qualifying bids, or if no bid is accepted, Duquesne Light will offer TOU default service for the applicable program year to eligible TOU customers.

Duquesne Light will recover its costs for implementing the TOU program, which includes communication costs, TOU analysis costs, incremental billing costs and training costs, through its residential default service rates. Duquesne Light estimates that these costs will be approximately $512,500.

Duquesne Light has said that, based upon the TOU participation rates of other EDCs, which have averaged 1-2%, Duquesne Light anticipates that a maximum of approximately 1,000-3,000 customers may participate in the TOU program for June 1, 2016, through May 31, 2017.

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