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Lack Of Evidence Concerning Consideration of Long-Term Contracts Prompts Two Pa. PUC Commissioners To Dissent From Approval of Duquesne Light Default Service Settlement

December 23, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The lack of substantial evidence supporting the lack of long-term contracts in an unopposed settlement (with respect to procurements) to establish default service at Duquesne Light for the period beginning June 1, 2017 prompted Pennsylvania PUC Chairman Gladys Brown and Commissioner David Sweet to dissent from an order approving the settlement

While Brown and Sweet, in a joint statement, said that they do not believe all default service plans must include long-term contracts, they said the utility, "has the burden of proof of providing evidence justifying the omission of any type of contract enumerated in 2807(e) of the Public Utility Code, whether it spot, short-term, or long-term."

"We submit that the policy set forth in the 2011 Default Service Order merely established that there is no exact formula for the correct 'prudent mix.' Rather, it is the responsibility of the utility on a case-by-case basis to show that its proposed portfolio of contracts complies with the requirements of the Public Utility Code. Popowsky established a further threshold that substantial evidence is required to deviate from the statutory requirements under 2807(e). Since the record in this proceeding does not provide substantial evidence supporting the omission of long-term contracts, we must respectfully dissent," Brown and Sweet said

While Brown has consistently made statements expressing her concerns with the lack of new long-term contracts in default service plans, her concern has not resulted in a dissent in many of such other proceedings

In contrast, Commissioners Robert Powelson and John Coleman, Jr. issued a joint statement in which they said, "it is clear that neither the [Commonwealth] Court nor the OCA interpret the 'prudent mix' standard to uniformly require the inclusion of long-term procurement contracts to comply with Act 129."

Powelson and Coleman noted that the Court has affirmed that the Commission, "may find that it is prudent for a default service provider to include only one type of contract in its portfolio when that is the option most likely to produce the least cost over time."

"This interpretation confirms that it is within the Commission's discretion to determine that one or more procurement methods are prudent to ensure least cost to customers over time in light of the particular facts of each case," Powelson and Coleman said

"Based on the Commonwealth Court' s interpretation of the statutory language of Act 129, we wish to highlight that Act 129 does not require the Commission to blindly require all default service providers to include spot-market, short-term, and long-term purchases in every procurement portfolio. Rather, the Commission is required to consider the prudency of including one or more types of these procurement products under the particular circumstances involved in each case to ensure that the products procured result in compliance with all of the statutory requirements of Act 129, including least cost to customers over time. We caution that uniformly requiring all default service providers to include spot-market, short-term, and long-term purchases in every default service proceeding will come at the expense of the other Act 129 mandates to ensure that default service procurement is not only prudent, but also ensures adequate and reliable service to customers at the least cost over time," Powelson and Coleman said

See Related Story Today for details on Duquesne Light's approved default service plan, including changes to POR, longer mass market procurement lengths, and a lower hourly pricing cutoff (click here)

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