Pennsylvania PUC Rejects Recommendation To Require That Standard Offer (SOP) Customer Referral Customers Be Dropped To Default Service At End Of SOP Term With Retail Supplier, At PPL

PUC Does Terminate SOP Shopping Program For CAP Customers, Will Not Allow CAP Customers To Take Service From A Retail Supplier

December 17, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Pennsylvania PUC today adopted an order in a proceeding addressing PPL Electric's default service proceeding for the period June 1, 2021, through May 31, 2025

As first reported by EnergyChoiceMatters.com, an ALJ had recommended modifying PPL's Standard Offer Program (SOP) such that customers shall be returned to default service at the end of their Standard Offer Program (SOP) contracts, unless the customers affirmatively elect to continue service with the EGS (retail supplier) or chose another EGS.

The PUC rejected this recommendation

For the regular SOP program, the PUC ordered that there will be no change, from the current program, in the treatment of customers at the end of their SOP term. Customers will remain with their SOP retail supplier at the end of the SOP term unless and until the customer takes an affirmative action to no longer do so

PUC Vice Chairman David Sweet emphasized consistency with how non-SOP customers are treated at the end of a contract term, in declining to require that SOP customers be dropped to default service at the end of their SOP term

"I recognize that the issue of customers being rolled into month-to-month contracts has been discussed at length over the course of litigation surrounding the implementation of the now over-20-year-old Competition Act. While I would probably not have supported the use of rollover contracts initially, they have become an ingrained feature of shopping. As such, I do not believe that it is wise to create inconsistencies in how the end-of-contract process is handled between SOP and non-SOP shopping," Sweet said

However, Sweet emphasized that, "I strongly encourage EGSs to work with all customers as much as possible to avoid these rollover contracts."

Chairman Gladys Brown Dutrieuille likewise stated, "Of particular interest to me was PPL’s proposal to modify the Standard Offer Program (SOP) design. PPL seeks to return customers, who have not affirmatively re-enrolled in SOP, to default service at the expiration of a contract term. PPL references the experiences of customers under current SOP design who do not affirmatively take action at the expiration of the SOP term and sometimes end up on month-to-month products with a generation price higher than the price-to-compare. While I am sympathetic to the proposal of the Company, I am also cognizant that the current SOP design has worked to enroll thousands of customers onto a generation rate at a discount to the PTC, and, that consistency among SOP program designs across the Commonwealth may prove beneficial. Finally, I find it persuasive that the existing design is consistent with the Commission’s present Regulations at Pa. Code § 54.10(3)(i)(A)-(B). To that end, I am comfortable retaining the existing design. I encourage PPL to continue to educate customers about the shopping options available to them at the end of the SOP. Finally, I urge PPL to continue to retain information and data related to its SOP to inform this Commission in future proceedings."

The PUC did adopt the ALJ's recommendation that PPL Electric's Customer Assistance Program (CAP) Standard Offer Program (CAP-SOP) shall be ended, and Customer Assistance Program (CAP) customers shall be required to receive default service at the Price to Compare.

The PUC previously prohibited CAP customers from shopping outside of the CAP-SOP; thus the final decision prohibits customers at PPL from being served by an EGS if they are receiving CAP benefits

Sweet said that his vote to end CAP-SOP was made "begrudgingly," and stressed that PPL has stated that, to the extent the PUC later addresses CAP shopping in a different manner, PPL will comply with any such PUC policy (as previously reported, a proposed CAP policy statement remains pending, which would allow a modified CAP-SOP with the CAP-SOP rate from an EGS never exceeding the price to compare)

Sweet stated, "I am voting to approve PPL’s CAP shopping request [to end the CAP-SOP program], albeit begrudgingly. I agree with PPL and other stakeholders that the existing CAP SOP is not working well. The Commission proposed, in 2019, a new policy statement regarding CAP shopping, but that proposal has not yet been finally adopted. I would have preferred that PPL propose a program more along the lines of our proposed policy statement. However, because the policy statement has not yet been adopted, I am willing to support the recommendation approving PPL’s request to drop CAP shopping for the time being. In doing so, I am relying on the fact that PPL has expressed throughout this proceeding that, 'should the Commission issue a future order directing differently than what PPL Electric is proposing in this proceeding, PPL Electric will seek to amend the DSP V with respect to CAP shopping so that it is in compliance with the Commission’s directives.' I personally intend to carefully monitor this issue as matters unfold."

A written order was not immediately available. However, other than the SOP, other default service issues (procurement, pricing) were proposed to be resolved through a non-contested settlement (see details on the settlement here)

P-2020-3019356

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