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Pa. PUC Proposes Clarification For When Retail Suppliers Must Drop Low-Income Customers To Default Service

November 8, 2017

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Copyright 2010-17
Reporting by Paul Ring •

The Pennsylvania PUC yesterday issued a tentative order proposing to clarify the deadlines by which electric generation suppliers (EGSs) must drop participants in PPL Electric Utilities' Consumer Assistance Program (CAP) to default service.

As previously reported, the PUC in a prior decision ordered that CAP customers at PPL may only shop via a new CAP-customer specific Standard Offer program (CAP-SOP), and ordered that CAP customers may not shop outside of CAP-SOP. The PPL CAP-SOP, as of June 1, 2017, is the only vehicle that a CAP participating customer may use to shop and receive supply from an electric generation supplier (EGS), wherein EGSs participating in the CAP-SOP must agree to serve customers for 12 months at a 7% discount off the price-to-compare (PTC) at the time of enrollment, with no early termination fees.

Prior orders intended to set forth how existing CAP shopping customers were to be treated, allowing for existing fixed contracts to continue until expiration, and also addressing month-to-month contracts.

However, the PUC said in its new tentative order that, "the Commission’s prior Orders in this proceeding did not adequately address how customers who are receiving service from an electric generation supplier (EGS) after June 1, 2017, and subsequently enroll in CAP are to be transferred to default service or PPL CAP‑SOP."

The PUC noted that, during a stakeholder meeting regarding implementation of the PUC's prior order, it soon became apparent that stakeholders disagreed on how the PUC's order intended to treat EGS customers on month-to-month contracts, and, specifically, disagreed on when these customers need to be returned to PPL to either go onto default service or obtain a supplier via the PPL CAP-SOP?

The PUC noted that some participants pointed to ordering paragraph (14)(i) of the Commission’s October 2016 Order to support their contention that month-to-month customers remain with their supplier until the customer is re-certified by PPL for the PPL CAP, as indicated by the ordering language below:

(i) PPL Electric will revise its CAP recertification scripts/process so that all existing CAP shopping customers receiving generation supply on a month-to-month basis after June 1, 2017 will be required at the time of CAP recertification to enroll in the CAP-SOP or return to default service, but in any event will only be permitted to shop through the CAP-SOP.

However, the PUC noted that other participants disagreed with this contention, as such stakeholders pointed to ordering paragraphs (14)(g) and (h) of the same order, which had held:

(g) All CAP customer shopping fixed-term contracts in effect as of the effective date of the CAP-SOP will remain in place until the contract term expires and/or is terminated.

(h) Once the existing CAP customer shopping contract expires or is terminated, the CAP customer will have the option to enroll in the CAP-SOP or return to default service, but in any event will only be permitted to shop through the CAP-SOP.

Furthermore, the PUC noted that some parties contend that a month-to-month contract expires at the end of the billing period; meaning that the customers on month-to-month supplier contracts should have already been returned to PPL default service or CAP‑SOP. Some also argued that there was no such thing as a month-to-month contract; that all contracts are for a fixed duration, and that the duration of a month-to-month contract is one month. However, other participants pointed out that this interpretation does not provide enough time for suppliers to provide customers with the two contract expiration notices required by the Commission at 52 Pa. Code § 54.10.

Further, as a practical matter, some parties noted that, at the time of the stakeholder meeting, there was no way for suppliers to know when customer CAP recertification occurs -- so there is no way for the ordering paragraph (14)(i) interpretation noted above to even be accomplished. Some parties noted that recertification occurs every 18 months, asserting that it could not have been the Commission’s intention to allow a customer in CAP to go this long without being enrolled into the PPL CAP-SOP or returned to default service. Some parties asserted that ordering paragraph (14)(i) was simply a "catch-all" intended to catch any customer who was, for whatever reason, not previously dropped by their supplier.

"Given the fundamental disagreements between the stakeholders noted above, and acknowledging that some of the post-transition issues have not been fully addressed in previous orders," the Commission issued the tentative order to solicit comment on the following proposed clarifications to the PPL CAP‑SOP.

The Commission is proposing to clarify its October 27, 2016 Opinion and Order regarding when a shopping customer who subsequently becomes CAP-eligible must be transferred to either PPL’s default service or to the CAP-SOP.

Specifically, regarding customers that are taking supply service from an EGS through a fixed‑duration contract and who are subsequently enrolled in PPL’s CAP, the PUC proposed the following:

"The Commission affirms the position that customers who are on a fixed‑duration contract with a supplier and subsequently enrolls in the On-Track [CAP] program at any time after June 1, 2017, remain with that supplier until the expiration date of the fixed‑duration contract or the contract is terminated. Once the newly enrolled CAP customer supplier contract expires or is terminated, the CAP customer will have the option to enroll in the CAP‑SOP or return to default service, but in any event, will only be able to shop through the CAP‑SOP."

"This ensures that we are not directing the abrogation of contracts and possibly exposing these customers to early termination fees," the PUC said

Regarding customers that are taking supply service from an EGS through a month‑to‑month contract and who are subsequently enrolled in PPL’s CAP, the PUC proposed the following:

"A shopping customer who subsequently becomes CAP-eligible must be dropped by the supplier to PPL default service within 120 days after the customer is enrolled in CAP. The CAP customer will then have the option to enroll in the CAP‑SOP or return to default service, but in any event, will only be able to shop through the CAP‑SOP."

"For customers who are receiving supply service from an EGS through a month‑to‑month contract and are subsequently enrolled in PPL’s CAP after June 1, 2017 and before this proposal becomes final, the supplier must drop that customer to PPL default within 120 days after a Final Order adopting this proposal is published in the Pennsylvania Bulletin."

What still remains unclear from the PUC's tentative order is a specific definition of "month‑to‑month" contract, although we note the PUC in the tentative order now refers to fixed contracts as "fixed‑duration" contracts rather than "fixed-term."

The PUC said its tentative proposal gives suppliers the time needed to provide appropriate notices to the customer as required by 52 Pa. Code § 54.10. "We believe that the immediate dropping of these customers is inappropriate because it makes it impossible for suppliers to comply with the notice regulations -- and from the customer’s perspective -- it is too abrupt. We acknowledge that PPL reports to have modified its web-portal to provide customer recertification dates to suppliers. While this has removed one of the objections to using the recertification date as the trigger to return a customer, we think that our proposal to set a 120-day return deadline is simpler to administer and comply with," the PUC said

"We acknowledge that some post-transition issues need to be addressed, given that customers will be continually moving in -- and -- out of On-Track and shopping. Suppliers need to know which potential customers are in the On-Track program -- and when any of their current customers enter On-Track. PPL may need to know what type of supply contract a customer is on at the time they enter On-Track," the PUC said

"We understand that PPL may have already revised their web portal to provide suppliers with information as to a customer’s On-Track status. We ask that PPL confirm this -- and that other parties comment on the sufficiency of this information. Is an additional mechanism needed to alert suppliers when one of their customers is accepted into the On-Track program? We expect suppliers to use this information to ensure that the customer’s supply contract is appropriately concluded.  We also ask parties to comment on whether suppliers should also be obligated to respond to any information request from PPL as to what type of contract the customer is on; month‑to‑month or fixed duration -- and if the contract is for a fixed duration, should the supplier provide PPL with the expiration date of the contract," the PUC said

The PUC stressed that in commenting on the tentative order, parties should not re-litigate the PUC's prior decisions regarding the limitation on shopping for CAP customers or other findings from its CAP-SOP order

Docket P-2016-2526627

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