Settlement In Duquesne Light Default Service Proceeding Addresses Presentation Of Retail Supplier Charges On Consolidated Bills

Consumer Advocate Says Residential Customers Of Retail Suppliers Paid $100 Million More Than Default Service Over 41 Month Period

October 14, 2020

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A further partial settlement has been reached concerning several issues -- including the presentation of retail supplier charges on utility consolidated bills -- in the Pennsylvania PUC proceeding addressing the default service plan of Duquesne Light Company for the four-year period commencing on June 1,2021, and ending on May 31, 2025.

The latest partial settlement, which is unopposed, was signed by Duquesne Light Company ('Duquesne Light' or the 'Company'), the Office of Consumer Advocate ('OCA'), the Office of Small Business Advocate ('OSBA'), the Coalition for Affordable Utility Service of Pennsylvania’s ('CAUSE-PA'), and the Natural Resources Defense Council ('NRDC').

In the proceeding, CAUSE-PA had presented evidence stating that, from January 2017 through May 2020, residential shopping customers paid, on net, over $102.9 million more than the applicable price to compare. On a monthly basis, CAUSE-PA said that since January 2017, shopping customers paid between $7 and $27 each month over the applicable price to compare.

As a result, CAUSE-PA recommended various bill format changes at Duquesne Light. CAUSE-PA suggested the price to compare and the applicable supplier price appear together in a stand-alone box on the front of the bill in an identical format so that customers can easily compare their suppliers’ price to the price to compare. Additionally, CAUSE-PA recommended that Duquesne use colors or other indicators on the bill to help consumers quickly identify whether they are paying more than the price to compare

The partial settlement does not adopt these specific recommendations, but instead requires that Duquesne Light will consider these recommendations as a part of Duquesne Light’s ongoing bill redesign initiatives.

As a part of the redesign, Duquesne Light has stated that new bills will clearly display the price to compare (PTC) to facilitate "at-a-glance" customer comparison of the PTC to an EGS’s rates.

Furthermore, the settlement provides that Duquesne Light’s bills for consolidated-billed residential EGS customers taking basic supply service will clearly display the PTC, as well as basic supply charges in actual dollars or cents per kWh, average dollars or cents per kWh, and/or flat monthly charge(s).

The partial settlement requires that the utility's supplier coordination tariff be modified to provide that, "Where the EGS uses bill-ready billing for residential customers taking basic electric supply service, the EGS shall provide electric supply charges in actual dollars or cents per kWh, average dollars or cents per kWh, and/or flat monthly charge(s)."

Consumer advocates had also raised concerns with suppliers using bill-ready utility consolidated billing to include non-basic charges on utility bills

Duquesne Light said that its tariff already prohibits the inclusion of non-basic charges in consolidated EGS bills to residential customers.

Nevertheless, the partial settlement adopts a modification to the supplier coordination tariff as a "backstop" to further enhance the enforceability of this requirement.

The tariff would now provide that, "Upon request, an EGS shall provide a written certification to Duquesne that the EGS is providing only basic electric supply to residential customers billed through consolidated billing with the Company."

The partial settlement also addresses purchase of receivables (POR) and default service procurement and pricing as discussed below

The partial settlement leaves to litigation the following issues: (1) EGS payment of Network Integration Transmission Service ('NITS') charges; (2) Electric Vehicle Time of Use ('EV-TOU') Pilot Program issues; (3) Solar Power Purchase Agreement ('PPA') issues; (4) Standard Offer Program ('SOP') issues; and (5) Customer Assistance Program 20966761vl 2 ('CAP') shopping issues.

As previously reported, Duquesne Light and consumer advocates have already entered into a non-unanimous settlement concerning the SOP program and CAP shopping see details in our prior story here

Turning back to the uncontested partial settlement, the settlement would continue Duquesne Light's POR program for Residential, Small C&I, and Medium C&I customers in its current form

With respect to default service program, the partial settlement generally adopts Duquesne Light's proposed procurement, apart from the solar PPA which is left to litigation

Under the settlement, default service for Residential & Lighting customers will continue to consist of a combination of twelve (12) and twenty-four (24) month fixed-price full requirements ('FPFR') supply contracts obtained through semi-annual competitive auctions with overlapping, or 'laddered,' delivery periods. The full requirements contracts require supplier(s) to provide energy, capacity, ancillary services, and any other services or products necessary to serve a specified percentage of default service load 24 hours a day, for the term of the contract. Because the contract is "load-following," the amount of energy and other services and products a supplier must provide will vary depending upon Duquesne Light’s actual default service load.

The residential default service supply rates would change every six months, with semi-annual reconciliation

Default service for Small C&I customers, which are customers with monthly metered demands less than 25 kW, will be supplied in the same manner as Residential & Lighting customers, which consists of a combination of twelve (12) and twenty-four (24) month full requirements supply contracts obtained through semi-annual competitive auctions with overlapping, or 'laddered,' delivery periods.

Rates for Small C&I customers will be reset twice per year, and Duquesne Light would continue to reconcile costs for these customers on a semi-annual basis.

The procurement schedule and contract length for residential and Small C&I default service can be seen here

Default Service for Medium C&I customers with monthly metered demands equal to or greater than 25 kW and less than 200 kW will continue to be supplied by full requirements supply contracts for three-month terms from third-party suppliers with no laddering. Rates for Medium C&I customers with demands under 200 kW will be reset quarterly, and Duquesne Light would continue to reconcile costs for these customers on a semi-annual basis.

For Medium C&I customers with monthly metered demand equal to or greater than 200 kW and Large C&I customers, Duquesne Light will continue to offer default service rates based on hourly day-ahead PJM energy market prices. Customers also will be charged a pass through of PJM capacity and ancillary services costs as well as the administrative costs of providing HPS.

Docket No. P-2020-3019522

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