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PPL Seeks Approval of Default Service Procurement Plan Through 2021

February 2, 2016

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

PPL Electric Utilities has filed a proposed default service plan with the Pennsylvania PUC for the period June 1, 2017, through May 31, 2021.

The proposed four-year term for the default service plan is a departure from the two-year plans recently used by PPL.

PPL does not propose any change in the procurement mechanism or class divisions in its new default service proposal

Residential and Small C&I (under 100 kW) customers would be served under fixed-price, full-requirements, load-following products with 6 and 12 month contract terms using a laddered approach, plus an existing long-term 50 MW block which expired in May 2021

For Residential and Small C&I customers, PPL would procure layered 6-month and 12-month full requirements products twice per year, specific to the Residential and Small C&I customer groupings, respectively, in April and October, with the first procurement occurring in April 2017 for default service beginning June 1, 2017.

About 45% of the Residential and Small C&I portfolio would be served under six-month contracts, and about 55% would be served under 12-month contracts. More specifically, each semi-annual procurement would obtain 45% of supplies via 6-month contract, and, depending on the specific procurement, 25% or 30% via 12-month contract.

The Residential and Small C&I Price to Compare would be fixed for six months, and would be reconciled every six months. PTCs would be posted 30 days in advance of the effective date

For Large C&I customers (over 100 kW), PPL would obtain default service supply on a real-time hourly basis through the PJM spot market. PPL Electric proposes to issue a single annual solicitation to obtain competitive offers from suppliers to provide the default service spot market supply to the Large C&I customer class. These annual procurements will coincide with the PJM planning period. Annual solicitations will be held in April for the upcoming PJM planning period.

PPL Electric said that it currently anticipates that it will continue in the role of default service provider beyond May 31, 2021. As a result, the October, 2020 procurement will continue to obtain both 12- and 6- month fixed-price products, the former of which would extend beyond the May 31, 2021 term of the new default service program. PPL Electric's proposed default service supply agreements, however, continue to contain provisions that anticipate the possibility that the PUC may determine that PPL will no longer continue in its role as default service provider and, as a result, PPL Electric may be required to transfer/assign its default service obligations to a third-party supplier. These provisions can be used to implement any change to PPL Electric's role as default service provider that may be made in the future.

PPL proposes to continue relying on multiple retail suppliers to fulfill its obligation as a default service suppler to offer a Time of Use rate to customers. PPL noted the Commonwealth Court last year concluded that the plain language of 66 Pa.C.S. § 2807(f)(5) provides that there can be only one default service provider, and that PPL Electric, as the default service provider, is required to offer TOU rates to its customer-generators, and that PPL Electric cannot satisfy this obligation through retail suppliers. PPL and the PUC have appealed this ruling to the state Supreme Court

PPL also proposed to continue its Standard Offer customer referral program under the new default service plan. As of December 31, 2015, approximately 210,150 eligible customers were transferred to the third-party service provider under the program, and approximately 186,295 of those customers enrolled with a retail supplier under the Standard Offer program. In addition, since the Standard Offer Program Web Self Service option became available June 1, 2015, approximately 1,657 other customers have elected the Standard Offer program.

PPL priced maintaining current bid caps for the default service procurements, under which an individual bidder cannot bid on more than 85% of the available tranches for a Customer Class offered in each solicitation. In addition, for the Residential and Small C&I Customer Classes, an individual bidder cannot supply more than 50% of the default service load for a Customer Class during the default service period

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