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Pa. Utility Agrees "Limits" On Customer Assistance Program (CAP) Customer Shopping Should Be Developed (Cites CAP Shopping Customers Paying Rates in Excess of PTC)

February 3, 2016

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

PPL Electric Utilities, in its newly filed default service plan for the period beginning June 1, 2017, said that it agrees that, "some limits on CAP [Customer Assistance Program] Shopping should be developed."

However, PPL cautioned against addressing the issue in its service area in isolation, and recommended a statewide proceeding addressing CAP shopping.

At PPL, customers in PPL's CAP program, called OnTrack, have always been eligible to shop. Shopping does not directly affect an OnTrack customer's payment amount, which is based upon ability to pay. However, OnTrack customers are limited to maximum CAP credits that they may receive (i.e., the difference between the actual bill and the required payment amount), and shopping can affect whether a customer exceeds their maximum CAP credit.

The percentage of OnTrack customers that have selected an EGS has risen from 44 percent in September 2013 to 52 percent in October 2015

PPL said that 46% of OnTrack shopping customers paid a price that exceeded the Price to Compare in 2015. In 2016, 67% of OnTrack shopping customers paid a price that exceeded the Price to Compare.

From January 1, 2012 through October 30, 2015, an average of 9,626 OnTrack shopping customers paid an average price of $0.11048 and used an average of 1,197 kWh monthly. Over this 46-month period, the average PTC was $0.08475.

Based on such data, OnTrack customers that selected suppliers with prices higher than PPL Electric’s PTC had average monthly energy charges that were $31 higher (each month) than they would have been had they not shopped, PPL said. Although these shopping customers’ OnTrack payment amounts did not change, they would have used up their CAP credits at a faster pace, which increases the risk of early removal from the OnTrack program. In addition, to the extent that these customers did not use up their CAP credits, the higher average monthly energy charges increased the resulting CAP shortfall costs recovered through the USR.

PPL did note that during the same period, an average of 7,750 OnTrack shopping customers paid an average price below the PTC of $0.07772 and used an average of 1,294 kWh monthly. Over this 46-month period the average PTC was $0.08475. As a result, these customers’ average monthly energy charges were $9 lower (each month) than they would have been had they not shopped.

"Given the data on CAP shopping, the Company agrees that some limits on CAP Shopping should be developed. However, the impact of CAP shopping is not an issue that is limited to PPL Electric but, rather, is an issue of statewide importance," PPL said

PPL Electric considered CAP shopping proposals offered during a recent collaborative and agrees that certain proposals, if designed appropriately, could potentially address some of the concerns and issues with CAP shopping. PPL did not endorse any specific proposal. During the collaborative, stakeholders offered certain proposals to address the impacts of CAP shopping, including, but not limited to, a proposal to limit the CAP shopping rate to be no higher than the effective Price to Compare and/or waive all EGS contract cancellation/termination fees for CAP shopping customers.

PPL said that, "the Company has serious concerns that that if such proposals are adopted for PPL Electric only, this could effectively erode retail competition for CAP customers in PPL Electric's service territory, and could potentially put PPL Electric in the position of enforcing/policing EGS contracts with CAP customers."

Elaborating on this point, PPL said, "For example, PPL Electric could be put in the place of monitoring EGS contracts to ensure that EGSs are not charging OnTrack customers a rate that is higher than the PTC or that EGSs are not applying termination/cancellation fees to OnTrack customers. This is particularly problematic as PPL Electric does not have access to the EGS contract, nor do the EDI enrollment transactions disclose the rate and/or if there are termination/cancellation fees."

"Further, it is entirely unclear what, if any, authority PPL Electric has over the EGS contracts with CAP customers. PPL Electric is not a party to any contracts between EGSs and shopping customers. Thus, even if CAP shopping limitations were adopted and the Company invested the resources necessary to monitor and track the EGS contracts with CAP customers, PPL Electric would not be able to enforce the CAP shopping limitations without a change in the law or regulatory scheme," PPL said

"To avoid these concerns, the Company recommends that the Commission promptly initiate a statewide collaborative open to all interested stakeholders and/or initiate a new rulemaking proceeding to address these CAP shopping issues on a uniform, statewide basis," PPL said

In the interim, PPL does propose to attempt to mitigate the impacts of CAP shopping by encouraging all OnTrack customers to participate in the Standard Offer customer referral program (SOP), which provides a discount of 7% to the then-applicable Price to Compare for one year, and does not permit EGS termination/cancellation fees. PPL Electric proposes that any customer that either (i) inquires about OnTrack or other low-income programs or (ii) is enrolled in OnTrack will be advised about the availability of the SOP (consistent with the SOP requirements), transferred to the SOP administrator if interested, and may voluntarily enroll in the SOP.

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