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PUC Adopts Final Clarification For When Retail Suppliers Must Drop Low-Income Customers To Default Service

February 8, 2018

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

The Pennsylvania PUC issued a final order clarifying 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, but the PUC later found that such orders did not adequately address all situations, and took the matter under further consideration

For further background on issues needing clarification, see our prior story here

In its final order, the PUC provided the following directions to PPL and suppliers concerning the PPL CAP-SOP program:

• The Commission affirms the position that customers who are on a fixed-duration contract with a supplier and subsequently enrolls in the On-Track 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, whichever comes first. Once the newly enrolled CAP customer supplier contract expires or is terminated, the supplier will return the CAP customer to default service. The CAP customer will have the option to enroll in the CAP-SOP or remain on default service, but in any event, will only be able to shop through the CAP-SOP.

• Customers who are receiving supply service from an EGS through a month-to-month contract and 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.

• Customers who are receiving supply service from an EGS through a month-to-month contract and are subsequently enrolled in PPL’s CAP either before or after June 1, 2017 and before this Final Order is published in the Pennsylvania Bulletin, the supplier must drop that customer to PPL default within 120 days after this Final Order is published in the Pennsylvania Bulletin.

• PPL Electric Utilities is directed to send an e-mail to each electric generation supplier at least a once a month identifying which existing customers of the electric generation supplier have enrolled in On-Track during the preceding month and indicating the date the customer was enrolled. Electric generation suppliers are to act upon this information per the directions provided in this Final Order.

As noted above, the PUC clarified that the retail supplier is responsible for dropping CAP customers to default service, rather than PPL performing this action

Regarding those customers on fixed-duration contracts who subsequently enter PPL’s CAP program, "we agree with PPL in that there is no reason to treat future CAP customers differently than those that were on CAP on or before June 1, 2017," the PUC said

"These customers should return to default service or enroll in the CAP-SOP upon the expiration of their contracts. This serves to protect the integrity of supplier-customer contracts and protects customers from possible early-termination/cancellation fees," the PUC said

"While CAUSE-PA may be correct in that early termination fees are not collectible through utility bills; cannot result in the customer’s termination; are not recoverable through the purchase of receivables program; and are not recoverable from ratepayers through rates – the customer still may be held responsible for the payment of the fees and could still face collection actions through other means. We find it unreasonable to adopt a course of action that would expose consumers to such a liability and deliberately expose them to collection enforcement due to actions beyond their control or force them to make a choice between avoiding early termination fees or obtaining the benefits of the consumer assistance program. We find that this resolution provides the most reasonable approach," the PUC said

However, "we agree with PPL that it should be clarified further by explicitly stating that the supplier is the entity responsible for returning the customer to default service," the PUC said, making such clarification in its direction quoted above.

In requiring a customer be dropped to default service within 120 days of the customer being designated as CAP, in the month-to-month situations noted above, the PUC favored such deadline rather than waiting for the customer's CAP recertification date for the required drop, or adopting a shorter period as favored by some consumer advocates

"120 days provides EGSs with ample time to send notices to the customer regarding the termination of the month-to-month contract and their return to default service. We also concur with PPL’s opinion that this proposal is more reasonable than waiting till the customer’s CAP recertification date in that it protects the interests of CAP customers and the other residential customers who pay for CAP. We find it significant that CAP customers could potentially continue on a month-to-month contract for up to 18 months before CAP recertification can occur," the PUC said

If an EGS fails to meet the 120-day standard, "they may face penalties under Chapter 33 of the Public Utility Code," the PUC stressed

The direction that PPL provide suppliers via email an ongoing updated list of CAP customers is a new provision under the final order. Previously, while PPL made information on a customer's CAP status available, it was only through a PPL web portal which EGSs had to constantly check against their customer lists.

"We are also concerned that such a [web portal] procedure could result in these customer’s being overlooked or not identified timely. We conclude that a more reasonable approach is for PPL to proactively notify EGSs when an existing EGS customer enrolls in CAP. PPL is the only entity that has direct access to all of the needed information, and as such, is in a position to generate EGS-specific reports about customer enrollments in CAP. This should be accomplished by email from PPL to each EGS on at least a once a month basis, identifying which existing customers of the EGS have enrolled in CAP during the preceding month and indicating the date the customer was enrolled. EGSs would then be obligated to act upon this information per the directions provided in this Final Order," the PUC said

"However, we reject WGL [WGL Energy]’s request that PPL notify suppliers of when a customer is dropped from CAP and thus eligible to choose freely in the competitive market. We assume in this situation that PPL will update the customer’s status on the Eligible Customer List (ECL) – assuming the customer has not opted-out of the ECL of course, as well as the web portal. Other than updating the ECL information, which is available to all EGSs, we decline to require separate specific notice to individual EGSs," the PUC said

P-2016-2526627

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