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Pa. PUC Proposes To Rely on Wholesale Suppliers To Serve Time Of Use Default Service

April 7, 2017

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

In a secretarial letter, the Pennsylvania PUC has proposed a mechanism for PPL Electricity Utilities to comply with its obligation as a default service supplier to offer a Time of Use rate option to customers

As previously reported, the PUC's previously adopted mechanism of relying on retail suppliers to offer TOU rates to default service customers at PPL was found by a court to be inconsistent with statute and the obligation for the default service provider to offer a TOU option.

Under the proposal in the secretarial letter, LSEs meeting the same qualification used for PPL's wholesale procurement of default service load would bid for the ability to serve the TOU load.

The PUC specifically proposes the following PPL TOU design

• PPL will hold semi-annual wholesale auctions, one auction for a summer season TOU product and another for a winter season TOU product.

• The exact time-period for winter and summer seasons will be appropriately determined by PPL to best reflect the distinction between winter and summer peaks, as well as any shoulder season load profile characteristics.

• Participating auction bidders will be held to the same eligibility criteria used for PPL’s existing fixed price full-requirements auctions and/or spot price full-requirements auctions, including, inter alia, authorization to sell power to Load Serving Entities at wholesale rates within PJM.

• PPL will designate on and off-peak hours that appropriately reflect summer and winter peak consumption profiles.

• PPL will design on and off-peak multipliers (or ratios) which will appropriately motivate shifting of consumption from on-peak to off-peak periods.

• TOU auction participants will bid an off-peak fixed-price full requirements price per Megawatt-hour (MWh). The lowest bid(s) win the auction. The on-peak price will be formulaically calculated based on the on/off peak multiplier (or ratio) established by PPL.

• The TOU rate option will be available to all default service procurement class customers who are not eligible for PPL’s spot-market only default service portfolio. Any existing Commission-approved limitations on customer shopping shall apply to this TOU product option as shall all consumer protections contained in the Commission’s regulations.

• A webpage will be established by PPL dedicated to the TOU product. The page will include educational material regarding the product.

• PPL’s TOU design will address reconciliation of costs in the event of TOU-specific under-collections or over-collections.

• If any PPL TOU auction fails to result in full subscription, PPL will apply a contingency on-peak/off-peak multiplier to its Price-to-Compare (PTC).

• PPL’s contingency on and off-peak multiplier(s) will be designed to appropriately motivate shifting of consumption from on-peak to off-peak periods for each TOU product and season.

• PPL will provide all TOU product eligible customers generation-weighted net-metering. Specifically, PPL will calculate the value of any excess generation based on the time period it was generated. Off-peak generation will receive the off-peak rate while on-peak generation will receive the on-peak rate.

The PUC directed PPL to make a petition to implement such a mechanism, or any proposed changes that would be consistent with the court's remand, to be effective June 1, 2017

The PUC also said that the proposed mechanism at PPL should be used as guidance by other EDCs for their compliance with statutory TOU obligations

P-2016-2526627 et. al.

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