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Exclusive: PPL Electric Utilities Initially Discloses Retail Supplier's Customer Count In Comments on Supplier Consolidated Billing Petition; Later Modifies Filing To Remove Disclosure
In its initially filed comments opposing NRG Energy's petition for electricity supplier consolidated billing in Pennsylvania, PPL Electric Utilities ("PPL Electric" or "PPL") disclosed the aggregate customer count of several NRG Energy retail supplier affiliates in PPL Electric's service area.
In response to an inquiry from EnergyChoiceMatters.com concerning the matter, PPL Electric said that, after speaking with NRG, and as a "courtesy" to NRG, PPL Electric will take steps to modify its filing (full statement noted below). PPL Electric has in fact removed the aggregate customer count of NRG Energy in its modified comments, instead only referring to NRG as having a "substantial" number of customers in the PPL Electric service area
The electronic version of PPL Electric's initially filed comments has also been removed from the Pennsylvania PUC's online docketing system.
Notably, in the comments initially filed by PPL Electric Utilities, PPL Electric disclosed the current, aggregate retail customer count of four NRG retail companies operating in PPL's service area. PPL Electric in its initially filed comments did use the modifier "approximately" in describing the customer count, but, as noted further below, the number did not appear to be rounded and appeared to be very specific.
Specifically, PPL Electric said:
• "NRG's affiliates currently have approximately [redacted by ECM] customers in PPL Electric's service territory and still offer variable rates"
• "Collectively, NRG's four affiliated EGSs serve approximately [redacted by ECM] customers in PPL Electric's service territory alone, which equates to approximately [redacted by ECM] of shopping customers in the Company's service territory."
While not disclosing the specific customer count of a specific NRG retail supplier, PPL Electric in its initially filed comments did report an "approximate" number of customers served by four NRG affiliates in PPL Electric's service area (the "approximate" number did not appear to be rounded and included significant digits all the way to the "ones" column). PPL Electric also translated this figure into a percent of all shopping customers in the PPL service area, in its initially filed comments.
EnergyChoiceMatters.com is not reproducing the figure here as it was unclear from where PPL obtained the number and because PPL Electric modified the filing to remove the number
In its initially filed comments, PPL Electric did not specify from where it obtained the customer count information. EnergyChoiceMatters.com specifically asked a PPL Electric media representative if it obtained the information from a public source or had sought permission from NRG regarding the disclosure of the information, or if the information was obtained from PPL Electric's own billing system, and PPL Electric did not provide a specific answer to the inquiry, instead issuing the statement, "We don’t believe the information provided in our filing violates the reporting regulation, but after speaking with NRG today, as a courtesy to them, we will take steps to modify our filing."
NRG told EnergyChoiceMatters.com that it, "does not publicly discuss specific customer count information and we cannot confirm the information in the PPL filing. We were not consulted regarding the content of the PPL filing on Supplier Consolidated Billing." Further comments from NRG are below.
EnergyChoiceMatters.com is not aware of any public source on which PPL Electric could have relied in obtaining the customer count number. While Energy Information Administration 861 reports may disclose certain customer data of retail suppliers publicly, such information is presented at the state level, not by utility service area -- and typically well after the period being reported (nearly a year) -- blunting the potential impacts associated with any such disclosure of a retail supplier's market positions or business strategy.
PPL Electric also stated in its initially filed comments that NRG affiliates, "still offer variable rates." PPL Electric did not indicate whether this information was gleamed from NRG public rate postings on NRG websites or other public price posting websites, or whether the information was obtained from PPL Electric's billing system, though the fact NRG charges variable rates is easily obtainable from NRG's retail websites.
The disclosure of the aggregate customer count of retail suppliers petitioning the PUC for a policy change raises several important policy issues, and implicates the ability to develop a robust record through the interaction of numerous stakeholders before the PUC
First, while EnergyChoiceMatters.com may make note of certain regulations concerning the treatment of retail supplier data, EnergyChoiceMatters.com wishes to stress that the discussion below is taken purely from a policy perspective, and EnergyChoiceMatters.com is in no way opining on whether PPL Electric's disclosure of the customer count data in its initially filed comments was consistent or inconsistent with any Pennsylvania PUC regulations. No legal conclusions should be drawn from EnergyChoiceMatters.com's own observations on this matter
Additionally, our concerns below are premised on the assumption that the customer data was not previously available through a public forum. As noted, PPL Electric declined to answer an explicit question as to whether it had obtained the cited data through a public disclosure, but we stress that EnergyChoiceMatters.com cannot confirm from where the data was obtained and is in no way stating or reporting from where the data was obtained.
In a statement, a PPL Electric media representative told EnergyChoiceMatters.com that the company does not believe the information provided in its filing violated PUC customer migration reporting regulations
"We don’t believe the information provided in our filing violates the reporting regulation, but after speaking with NRG today, as a courtesy to them, we will take steps to modify our filing," a PPL Electric media representative told EnergyChoiceMatters.com in a statement.
However, from a purely policy perspective, there is ample evidence that the Pennsylvania PUC intends for retail supplier customer data to be provided confidential treatment, and that the PUC does not expect electric distribution companies (EDCs) to make this data public.
Specifically, 52 Pa. Code § 54.203 establishes that in filing quarterly Retail Electricity Choice Activity Reports, EDCs shall provide certain data concerning retail suppliers' activity, including MWh served and customer count, on a confidential basis to the PUC
52 Pa. Code § 54.203 provides in relevant part:
(3) An EDC shall report retail sales activity of EGSs operating in its service territory. An EDC shall report the following information for an EGS providing service in the EDC’s service territory, marking the information as confidential:
(i) Identity of the EGS.
(ii) Number of customer accounts served by the EGS by customer class for residential, commercial and industrial customers.
(iii) Sales in MWh of customer accounts served by the EGS by customer class for residential, commercial and industrial customers
While EnergyChoiceMatters.com does not represent that these are the sole or overriding provisions relating to the issue of retail supplier customer counts, from a policy perspective, it would seem futile for the PUC to require EDCs to file quarterly migration reports with retail supplier data marked confidential, only for this information permitted to be publicly disclosed in other forums.
As noted above, PPL Electric's initially filed comments did not disclose the identity of an electric generation supplier (EGS), because it aggregated the data of four affiliated suppliers. However, from a policy perspective, this is a distinction without a difference. Any policy reasons which prompted the PUC to grant confidential protection to EGS data filed by EDCs as part of the quarterly migration reports would still be applicable to an aggregate of the data specific to a single family of companies.
Without ascribing any of the following concerns to the PUC itself in its prior decision making the EGS migration data confidential, such concerns arising from the release of EGS data may include: the ability of EGSs to negotiate and bargain for wholesale supply if counterparties know their exact position prior to such negotiation; the ability of competing EGSs, particularly those affiliated with generation or wholesale supply, to strategically "box out" their competitors in the wholesale market based on the release of EGS customer or MWh data specific to a utility service area; the ability of competing EGSs to determine the viability of the market in a particular service area, and particularly the viability of a specific EGS's sales channels, based on the EGS's customer count in a service area; creating potentially false perceptions concerning EGSs in the minds of customers because of their size or market share (e.g. smaller suppliers may be seen as less viable). These concerns are all equally valid in situations where a single EGS parent had its information disclosed in aggregate, combining each of the affiliates in a service area, and not only if the data were disclosed on an individual EGS basis.
These concerns are also heightened when disclosed on a utility service area basis, particularly the potential impacts on an EGS's ability to competitively access the wholesale market. In contrast, a release of an EGS's data on a statewide basis would be blunted to some extent since its customer count could be spread across a wide and disparate wholesale market, with much different pricing from constrained zones (eastern PA) to the western part of the state.
Apart from the impacts on a particular retail supplier's business strategy, public disclosure of an EGS's customer data, particularly in an ad hoc manner where only one EGS -- as part of litigating a position before the PUC -- was exposed to such disclosure, could chill participation by EGS parties in Pennsylvania PUC proceedings, frustrating the development of robust policy. Indeed, the potential for an EGS to be subject to public disclosure of its data contravenes one of the concerns cited by PPL Electric in opposing NRG's petition for supplier consolidated billing (SCB).
Specifically, in its comments, PPL Electric had said that the proposed form of SCB, "could result in destructive competition in Pennsylvania's retail electric market."
It was in making this argument that PPL Electric had initially disclosed the aggregate NRG customer data, making a point that NRG is a relatively larger supplier in the PPL Electric service area
"Although entities the size of NRG and its affiliates may be able to take advantage of these [SCB] proposals, smaller EGSs may not be able to offer competing products or absorb distribution rate increases," PPL Electric had said in its initially filed comments
"Moreover, not all EGSs will be required to offer SCB, nor would they all have the personnel, customer service infrastructure, capital investment, and technical experience necessary to qualify for SCB. Therefore, smaller EGSs operating in Pennsylvania may be unable to compete with the larger EGSs and be forced out of the market. Thus, NRG's proposal could negatively affect competition in Pennsylvania's retail electric market and, ultimately, consumers," PPL Electric had said in its initially filed comments
First, without opining on our individual opinion of such arguments and whether we agree with them, EnergyChoiceMatters.com agrees that, regardless of our ultimate view, PPL Electric raises a valid concern worthy of debate and consideration by the PUC in these statements.
However, we do note that in electing to disclose certain aggregate NRG customer data in supporting its argument in an ad hoc manner, PPL Electric may chill participation by the very EGSs for which it expresses concern -- smaller companies, which are typically privately held.
While we do not wish to endorse PPL Electric's disclosure of NRG's aggregate data in any manner or state that such disclosure did not harm NRG, we do believe that the disclosure of such data for a large company such as NRG has less of a negative impact than it would have on a small, privately-held EGS, where, due to NRG's size, its status as a publicly traded company, and competitive intelligence in the market, its position is probably more well understood by competitors and other market participants, although perhaps not known specifically or on a confirmed basis. In contrast, the market may have no visibility into the size and position of a small, closely held EGS, and disclosure of such an EGS's data may have larger implications for its ability to negotiate with counterparties.
Moreover, NRG, with its large wholesale power marketing operations and ownership of generation, can more easily access alternatives to the extent its ability to access the wholesale market is soured by the release of its customer data. In contrast, a small, privately held EGS, which may already face a smaller world of potential wholesale counterparties due to its load size (as wholesale marketers do not wish to compete for such small load) or financial size (as larger financial players may eschew transactions with companies that lack large parental guarantees), may find its ability to access the wholesale market permanently tainted by the release of its customer data
Now, PPL Electric did not disclose the customer data of such a small supplier. But its ad hoc disclosure of similar data essentially puts the potential release of such data "on the table" in public proceedings before the PUC.
While small EGSs may not be rushing out to request implementation of SCB, there are numerous cases that may arise before the PUC where small EGSs may have a unique voice that would be absent if their participation is chilled. Indeed, one of such areas is a policy all stakeholders now seem to love (in opposing SCB) -- purchase of receivables. As an aside, we have never seen such support for POR as we have seen in the various filed SCB comments -- now typically expressed by parties which, while perhaps not outright opposed to POR in the past, has previously expressed significant concerns about POR. But in opposing SCB, these same parties are citing POR as a reason SCB should not be implemented, and even warning SCB could damage the viability or POR for EGSs which do not use SCB
With POR in certain areas undergoing significant changes (institution of a clawback charge), with the potential for such changes to expand to other EDC service areas, smaller EGSs may wish to be active before the PUC in preserving POR as a viable billing solution. But now such EGSs must be concerned that their closely held customer data will be made public.
It is not hard to fathom an EDC, barring the clear repudiation of the disclosure of the data of EGSs who file comments or petitions with the PUC, publicly releasing an EGS's customer data and write-off percentage in a PUC filing concerning POR and/or the clawback (ostensibly as a reference point to aid the PUC in its decision-making), in making a point about such EGS's comments about POR or a POR clawback. Small EGSs may fear being active before the PUC due to such risk
We can say that, in our prior work in regulatory affairs for a privately held EGS where _any_ business data or metrics were fiercely guarded, the concern is real, and one of the preeminent concerns as our team sought company approval to participate in proceedings before a PUC was the risk that our company would be subject to discovery, RFIs, or other fishing expeditions that would result in the public release of guarded confidential data.
PPL Electric's initial disclosure of the NRG customer data would only exacerbate this concern for small EGSs -- the very EGSs for which PPL Electric has stated a concern.
EnergyChoiceMatters.com finally wishes to note that in citing the reasons which may give rise to the confidential treatment of EGS data, we are not necessarily agreeing with such concerns. Clearly, in some markets, certain EGS data such as customer count (Connecticut) or also load (Michigan) are publicly reported by service area, either on a near real-time basis (about a month after in Connecticut), or only on an annual basis (Michigan). And, as noted, EIA data includes retail supplier data on a statewide basis, but is released nearly a year after the time which the data covers. And without opining on our own opinion regarding the matter, there are robust arguments that can be made that such data should be disclosed for consumer protection or education reasons.
The issue is not whether the data should be disclosed. The issue is that it appears to us Pennsylvania has instituted a policy that EGS customer data should be granted confidential treatment unless otherwise directed by the PUC, and while parties should feel free to challenge such decision as they may do with any PUC policy, any change should come from a formal process, and not an ad hoc disclosure
PPL Electric made the following statement to EnergyChoiceMatters.com:
"We don’t believe the information provided in our filing violates the reporting regulation, but after speaking with NRG today, as a courtesy to them, we will take steps to modify our filing."
NRG made the following statement to EnergyChoiceMatters.com:
"NRG does not publicly discuss specific customer count information and we cannot confirm the information in the PPL filing. We were not consulted regarding the content of the PPL filing on Supplier Consolidated Billing.
"NRG believes consolidated billing would provide value for Pennsylvania consumers.
"With Supplier Consolidated Billing customers gain access to more innovative products and services that meet their individual needs – including bundled products like home security or surge protection, and new payment options like Pre-Pay and Flat Bill that allow customers to take control over their energy budgets.
"Despite efforts to improve electricity competition in Pennsylvania, nearly two-thirds of customers are still on utility provided default service. So clearly, barriers still exist that prevent a more robust, fully competitive market to develop and flourish. One of those barriers is the inability of suppliers to provide a consolidated bill to their customers.
"Supplier consolidated billing is a natural and necessary next step in moving Pennsylvania toward the robust market that has been envisioned for twenty years. The time is right to eliminate that key barrier and give suppliers the ability to bill their customers directly for both the commodity and delivery of that commodity, in the same way providers of every other good or service do today."
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PPL Electric Initially Made Disclosure In Saying SCB Could Result In "Destructive" Competition In Retail Market
January 25, 2017
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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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