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RESA Appeals Pennsylvania PUC Capping Retail Supplier Rates For CAP Customers Via Standard Offer Program

February 28, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Retail Energy Supply Association has appealed to the Commonwealth Court a Pennsylvania PUC decision which provides that Customer Assistance Program (CAP) customers at PPL Electric can only take competitive electric supply through a CAP-specific Standard Offer Program (SOP), which mandates that suppliers' CAP-SOP rates shall be a 7% discount to the PPL default service rate in effect at the time of enrollment, with the EGS rate fixed for 12 months

CAP-SOP customers currently on competitive supply must be returned to default service at the end of their current contract, provided that the customer does not enroll in CAP-SOP prior to such drop.

See more details on the CAP-SOP program at PPL here

"The result of this decision is to limit the competitive generation supply choices available to 41,074 residential customers enrolled in PPL Electric PPL's CAP (number based on record in proceeding but CAP program participation fluctuates)," RESA said in its appeal

The PUC's determination that existing CAP shopping customers should be "forcibly removed" from their current EGS service, "is not supported by substantial evidence," RESA said in its appeal

"Indeed, the undisputed record evidence is that approximately half of these existing shopping CAP customers are paying an EGS price that is at or below PPL's default service rate," RESA said in its appeal

Reiterating arguments in a petition for reconsideration with the PUC (which the PUC denied), RESA said in its appeal that the PUC's decision departs from precedent set by the Commonwealth Court.

Specifically, in its appeal, RESA said, "The CAP-SOP requirement that EGSs cap their prices to CAP participants to offer an even deeper discount (i.e. 7% off the PPL default service rate) is even more severe than the price cap that has already been considered and rejected by the Commonwealth Court," in a recent Court decision concerning PECO's CAP customers.

In such PECO order, the Court, while adopting a prohibition on early termination fees for CAP customers, affirmed the PUC's rejection of a restriction sought by consumer advocates that EGSs be required to cap their pricing to PECO CAP customers at or below the PTC.

"The PUC erred as a matter of law and abused its discretion in determining that no reasonable alternatives to restricting shopping were available. The PUC failed to follow the clear direction set forth by the Commonwealth Court requiring an analysis of the substantial reasons why there are no reasonable alternatives to the proposed restriction on competition. Indeed, the record included several alternatives to the ultimate restrictions directed by the PUC which, therefore, negated the need. Rather than engaging in the required review, the PUC committed an error of law and abused its discretion by depending on the parties to have undertaken this review. The PUC erred in delegating this duty," RESA said in its appeal

"The Competition Act prohibits an electric distribution company from changing a customer's electricity supplier without direct oral confirmation from the customer of record or written evidence of the customer's consent to a change of supplier. 66 Pa. C.S. § 2807(d)(1). The PUC erred as a matter of law, abused its direction and violated stated policy directives by directing in its October 27, 2016 Order and again in its January 26, 2017 Order that PPL CAP participants who are receiving service from an EGS that they affirmatively selected would be forcibly removed from their chosen service provider effective June 1, 2017," RESA said in its appeal

"The PUC violated constitutional principles in determining - without appropriate notice and an opportunity to be heard - that existing EGS customers participating in PPL's CAP would be forcibly removed from their affirmatively chosen existing EGS service without their consent," RESA said in its appeal

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