Pennsylvania Bill Would Require Full Unbundling Of Costs Related To Electric, Gas Supply

Would Implement Enroll-by-Wallet

Would Require Suppliers To Undergo Training Conducted by PUC, Pass Exam For License

October 29, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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Pennsylvania State Senator Kristin Phillips-Hill (R-York) has introduced legislation (Senate Bill 1365) that would require the full unbundling of utility electric and gas supply costs, and would also require the adoption of enroll-by-wallet

The Retail Energy Supply Association (RESA) "strongly supports" the bill and has been working with Senator Phillips-Hill on this effort.

The bill would require, within 210 days, that each electric distribution company, "unbundle all costs associated with providing default service from distribution rates and ensure that the appropriate level of the costs are recovered in default service or standard offer service rates."

Under the bill, "The specific costs to be unbundled shall include, but not be limited to: commodity costs, capacity costs, hedging costs whether financial or physical, procurement costs, billing system and billing costs, customer service and account management costs, working capital, overheads, including building and information technology costs, legal and financial costs and labor costs. To the extent any of these costs are indirect costs to pay for services that support both distribution customers and default service customers, the commission shall require an appropriate proportion of those indirect costs be allocated to default service. The intent of this requirement is to ensure that the actual costs of providing distribution and default service are accurately reflected in the rates charged for those services."

Using nearly identical language, the bill would require that each natural gas distribution company shall unbundle all costs associated with providing supplier of last resort service from distribution rates and ensure that the appropriate level of the costs are recovered in supplier of last resort rates.

The unbundling and reallocation shall be accomplished in the utility's next rate case, but if the utility does not file a rate case within three years following the effective date of the bill's provision, the PUC may order the filing of information in order to effectuate unbundling and may, after the filing, commence a proceeding where the unbundling is accomplished

Additionally, the bill would require both EDCs and NGDCs to implement an enroll-by-wallet mechanism

Specifically, the bill would require that, "The commission shall establish regulations to ensure that an electric distribution company processes a change in electric generation supplier by using either the customer account number or other personally identifiable information. A customer who consents to a change of electric generation supplier shall not be required to provide an electric distribution company account number or other identification number if the customer provides a valid government-issued or alternative form of identification as determined by the commission."

Similar language is used for NGDCs with respect to enroll-by-wallet

The bill would require the PUC to develop a training and educational program for any entity or individual that is licensed by the commission as an electric generation supplier or as a natural gas supplier (quoted language below is for EGSs, but generally is the same for NGSs).

"The program shall require that a designated representative of each licensed electric generation supplier demonstrate a thorough understanding of the commission's regulations regarding sales, consumer protection and any other matter the commission deems appropriate through an online training program," the bill provides

"At the conclusion of the training, the commission shall conduct an online examination and, on a satisfactory score, certify that the designated representative of the licensed electric generation supplier has successfully completed the training," the bill provides

"The commission may not issue a license to a new electric generation supplier until a designated representative of the new electric generation supplier completes the training and certification," the bill provides

"The commission shall determine the schedule and frequency by which a designated representative of a licensed electric generation supplier must complete the training and certification," the bill provides

Assessments on EGSs and NGSs, under the PUC's current assessment authority, would be used to fund the training programs

RESA's state chair for Pennsylvania, Tony Cusati, said of the bill, "RESA strongly supports Senator Bill 1365 and believes that if passed it would help enhance the Retail Energy Market, provide consumers with additional transparency on costs among electric and natural gas providers, as well as make switching service providers easier in the future. Additionally, the bill would require suppliers to obtain a certification that they are knowledgeable of applicable statutes, regulations, and other requirements, increasing accountability for their actions and behavior. RESA, and its members, support increased consumer protections and commend the efforts made by Senator Hill to sponsor this legislation."

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