Energy Choice
                            

Matters

Retail Supplier Returns Customers to Default Service in Pennsylvania

February 10, 2016

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

VCharge Inc. has returned its retail electric supply customers in Pennsylvania to PPL Electric Utilities, and has asked that the Pennsylvania PUC cancel its retail supplier license

In Pennsylvania, VCharge had focused on serving customers with Residential Thermal Storage (RTS) heating in the PPL territory, offering its "SmartBricks" system, which includes a retrofit of the customer's existing thermal storage system, including new controls with internet connectivity. The SmartBricks system uses VCharge's patented Electric Thermal Storage energy management system to estimate the amount of energy that will be needed by each home each day, and buys electricity accordingly. By replacing the current off-peak charging system with a sophisticated algorithm that uses weather forecasts and specific information about a customer's individual heat use, SmartBricks buys electricity only during the cheapest hours, storing the energy in the bricks. VCharge had offered RTS customers with the SmartBricks upgrade a discount of 25% off the cost of heating, with the discount paid as a monthly rebate.

Pennsylvania PUC Commissioners had praised the company's entry in to the Pennsylvania market in 2012 -- which had a much different climate for retail suppliers -- as an example of the novel product offerings to be available to customers from choice.

VCharge told EnergyChoiceMatters.com that it transferred the customers back to PPL, the default supplier, because it felt that the PPL Price to Compare was the best deal that they will get for the remainder of this year (especially this heating season).

VCharge said that being a retail energy supplier was not an essential part of its business proposition, "and consumes a lot of capital in the form of collateral/bonds."

"We're a small business, and we had better uses for the money," VCharge's Bob Chatham, Chief Marketing Officer and Head of Business Development, told EnergyChoiceMatters.com

In a letter to customers, VCharge said, "In the past, we have required that our customers sign up with VCharge as their energy supplier; many of you have told us that you would like to be able to choose a lower cost option. In response to these inquiries, we examined whether requiring our customers to have VCharge as their energy supplier is best for you, and best for us. Based on your feedback and our analysis, we’ve decided to stop supplying energy in Pennsylvania."

"Being your energy supplier isn’t a technical requirement for us to manage and monitor your heat, but it does require us to put up a lot of cash which generates little profit given the amount we invest and the big risks we take in the energy market. There are many larger companies that can provide you with a lower rate, and by switching to one of them you may get a better deal than you have with us as your energy supplier," VCharge told customers

VCharge's focus is on serving as a provider of ancillary services like frequency regulation to the grid operator (PJM) working to modernize its control architecture using demand-side, behind-the-meter resources.

"Our efforts are focused on 1) providing a smarter heating system for customers (the SmartBricks service), and 2) controlling distributed residential electric loads (in this case, electric storage heating systems)," Chatham said

VCharge has retained all of its former supply customers as customers for its SmartBricks service and continues to add new customers. VCharge continues to pay a monthly rebate to customers reflecting their share of the revenue earned by controlling their heating.

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