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Pa. PUC Declines To Address CAP (Low-Income) Shopping In PECO Default Service Order Given Separate Ongoing Proceeding

December 8, 2016

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Reporting by Karen Abbott • kabbott (at) energychoicematters.com

The Pennsylvania PUC adopted an order on PECO's electricity default service plan for the period beginning January 1, 2017 that declines to address in the default service plan any changes or restrictions on the ability of Customer Assistance Program (CAP) customers to shop for competitive supply.

In doing so, the PUC noted that PECO has before the PUC a pending petition to institute CAP shopping subject to restrictions authorized by a court (notably, the prohibition on termination fees for CAP products). Click here for details on PECO's proposed CAP program

"Because PECO’s 2016 CAP Rule Change Filing is still pending before this Commission, we do not believe it appropriate for us to decide issues relating to the ability of PECO’s CAP customers to shop in this DSP IV proceeding, particularly as we are awaiting the receipt of comments [concerning CAP] from the parties in the DSP II proceeding," the PUC said

"Rather, we intend to fully address the matter of CAP shopping in PECO’s service territory in the context of the remanded proceeding under PECO’s DSP II docket, wherein we will consider PECO’s 2016 CAP Rule Change Filing," the PUC said

"Although we decline, at this time, to address the CAP shopping issue and the proposals set forth herein, we wish to make clear that we have every intention of fully considering the positions of all interested parties, including all parties to this proceeding, regarding PECO’s 2016 CAP Rule Change Filing and the ability of PECO’s CAP customers to shop for competitive generation supply. As set forth in the May 2016 Secretarial Letter and the November 2016 Secretarial Letter, PECO’s 2016 CAP Rule Change Filing is subject to public comment. CAUSE/TURN and all other interested stakeholders will be free to present their positions on PECO’s CAP shopping plan through the submission of comments to the 2016 CAP Rule Change Filing at Docket No. P-2012-2283641. In addition, we will take official notice of the documents constituting the record in this proceeding when we consider PECO’s 2016 CAP Rule Change Filing in the proceeding at Docket No. P-2012-2283641, pursuant to 52 Pa. Code § 5.406 relating to public documents, 52 Pa. Code § 5.407 relating to records of other proceedings, and 52 Pa. Code § 5.408 relating to official and judicial notice of fact. We find that this process will address the due process concerns of CAUSE/TURN," the PUC said.

In addressing the only other contested issues in the proceeding, the PUC denied the exceptions from Noble Americas Energy Solutions concerning the treatment of non-market-based PJM charges.

The PUC adopted a settlement that provides that PECO will continue to be responsible for and recover the following PJM charges from all distribution customers in PECO’s service territory through its Non- Bypassable Transmission Charge: Generation Deactivation/RMR charges (PJM bill line 1930) set after December 4, 2014; RTEP charges (PJM bill line 1108); and Expansion Cost Recovery charges (PJM bill line 1730).

In contrast, during the default service plan's term, PECO will continue to be responsible for and recover Network Integration Transmission Service (NITS) and Non- Firm Point-to-Point Transmission costs associated with default service customers only through its unbundled, bypassable Transmission Service Charge.

Noble Americas Energy Solutions had objected to the nonbypassable treatment of the PJM charges described above, arguing that nonbypassable treatment of such charges interferes with an EGS's rights as a PJM LSE to directly bill their shopping customers for their PJM transmission charges in connection with customized product and service offerings.

The PUC found that Noble did not offer any evidence to disturb the PUC's prior finding that nonbypassable treatment of such charges is appropriate

Other terms of the settlement governing PECO's default service for the period June 1, 2017 through May 31, 2021, were not contested and were adopted without modification.

As previously reported, the settlement dropped an earlier proposal to use a five-year contract for a slice of residential supply, and adopts the use of 24 month contracts for half of the small C&I portfolio.

Under the adopted settlement, for the residential class, PECO will continue to procure a mix of one-year and two-year fixed-price full requirements (FPFR) contracts for approximately 96% of the default service supply, with one-year contracts comprising approximately 60% of this portfolio, and two-year contracts comprising approximately 40%. There will be six months of spacing between the commencement of contract delivery periods for this portfolio.

Originally, PECO had proposed to supply the remaining approximately 4% of the default service supply portfolio for the residential class with a mix of five-year fixed-price full requirements products (approximately 3.2%) and spot energy purchases (approximately 0.8%). The five-year products was proposed to consist of two tranches (each supplying 1.6% of the residential class default service load) of five-year fixed-price full requirements products (for June 2017 through May 2022 delivery)

The settlement and PUC's final order drops this proposal for five-year contracts. Instead, the remaining approximately 4% of residential class supply currently obtained through 17-month FPFR products (and residual spot-market purchases), will be replaced with 24-month FPFR products (approximately 3.2% of residential default service load) and spot purchases (approximately 0.8%) directly from the energy markets operated by PJM. These 24-month FPFR products will be procured in the scheduled Spring 2017 procurements, and again in the scheduled Spring 2019 procurements

For all full requirements contracts, contracts will be procured approximately two months prior to the beginning of the applicable contract delivery period

Click here for a schedule of procurements and delivery periods under the settlement

For small commercial customers (100 kW or smaller, plus lighting customers on schedules AL, POL, SLE, SLS and TLCL), the adopted settlement provides that PECO will supply such customers using an equal share of competitively bid, laddered one-year and two-year FPFR products

This is a departure from the current small commercial default service supply plan, which relies exclusively on laddered 12-month contracts. PECO originally proposed the addition of 24 month contracts to the small commercial portfolio to increase price stability

For residential and small commercial customers, default service rates will continue to change quarterly and over/undercollections of default service costs will continue to be reconciled on a semi-annual basis. The projected GSA for each quarter, which forms the basis of the Price-to- Compare (PTC), will be filed by PECO 45 days before the start of each quarter.

Large C&I (above 100 kW) default service customers will be subject to hourly pricing

Docket No. P-2016-2534980

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