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Settlement Would Expand Hourly Pricing at Pennsylvania EDCs, Retain Use of Three Month Contracts For Small C&I Default Service Portfolio

April 6, 2016

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

A settlement in the FirstEnergy Pennsylvania utilities' default service proceedings for the period June 1, 2017 to May 31, 2021 would lower the threshold for hourly priced default service and retain the use of three-month contracts as part of the default service procurement portfolio for small C&I customers.

The settlement provides that the FirstEnergy-PA utilities (Met-Ed, Penelec, Penn Power, and West Penn Power) would lower the hourly pricing threshold to 100 kW effective June 1, 2021. However, the EDCs would lower the hourly pricing threshold to 100 kW effective June 1, 2019 for any EDC where smart meters will be used for hourly pricing billing purposes by that date

The current hourly pricing threshold is 400 kW.

In addition to any adder established through an auction to select default service suppliers serving customers at hourly pricing, hourly priced default service would include an additional $4/MWh adder

For commercial customers (under 400 kW until the expansion of hourly pricing to 100 kW), the settlement retains the current procurement mix of fixed priced full requirements contracts, which includes a mix 3-month (28%), 12-month (36%) and 24-month (36%) terms. The FirstEnergy utilities had originally proposed to eliminate the 3-month contracts from the portfolio.

Click here for a schedule of procurement dates for the commercial and residential customers.

Residential customers default service would be served on full requirements contracts with a fixed price comprising 95% of the tranche, and with 5% of the tranche priced at PJM spot prices plus a $20/MWh adder.

Under the settlement, 50% of the residential default service portfolio would be 12-month contracts, and 50% would be 24-month contracts.

Residential and commercial Prices to Compare would continue to be adjusted quarterly.

While the settlement contemplates the use of the same product mix for the entirety of the term, stakeholders may propose, after the first two years of the default service term, a change in procurement or product mix.

Continuing current practice, default service suppliers (and retail suppliers) would be responsible for NITS, but they will not be responsible for Regional Transmission Expansion Plan charges (RTEP), Expansion Cost Recovery Charges (ECRC), Reliability Must Run/generation deactivation charges (RMR), historical out of market tie line, generation, and retail customer metering adjustments, and unaccounted for energy (UFE).

The load cap for the procurements would be set at 75%, up from the current 50%

The settlement remains subject to PUC approval.

Signatories include the PUC's Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate, and the Retail Energy Supply Association, among others

See Related Story Today: Settlement Would Introduce Purchase of Receivables "Clawback" At Pennsylvania Utilities

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