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Pennsylvania Utility: Over 80% Of Shopping Residential Customers Have "Consistently Paid" Supplier Prices Above The Price To Compare

Utility Seeks To Delay Obligation To File Shopping Plan For CAP Customers

September 8, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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PECO petitioned the Pennsylvania PUC for approval to continue to restrict customers enrolled in its Customer Assistance Program (CAP) from shopping for retail electric generation supply until after the Commission issues its final Policy Statement on Electric Customer Assistance Program Participant Shopping

As previously reported, the PUC issued a tentative policy statement on CAP shopping in early 2019. The PUC has not yet issued a final statement and there has been no substantive record developments in the proceeding since the summer of 2019. In brief, the CAP policy statement would allow CAP customers to shop subject to a price cap (see details here)

Currently, all of PECO’s customers, including all low-income customers, may elect to shop for electricity and purchase electric generation supply from an electric generation supplier (EGS) at any time.

However, those customers are not permitted to enter into, or remain on, CAP while purchasing electric generation supply from an EGS.

Under an order in PECO's most recent default service plan proceeding, PECO was directed to submit a CAP shopping proposal within 90 days of a PUC final order in a separate, then-pending proceeding addressing the design of the CAP program itself (not shopping eligibility for CAP customers, aka CAP Design Proceeding) instead of implementing a CAP shopping as part of the default service plan proceeding

The PUC issued a final order in the CAP Design Proceeding in June 2022, triggering the obligation of PECO to file a CAP shopping proposal

PECO sought to defer implementation of electricity CAP customer shopping, stating, "Maintaining the status quo in PECO’s service area will help ensure affordability of utility service for CAP customers without increasing the CAP program costs paid by PECO residential customers."

PECO stated, "PECO reviewed the prices the Company’s shopping residential customers are currently paying. The Company compared EGS prices in cents per kWh (determined by dividing monthly EGS charges billed to all residential accounts divided by kWh usage) to PECO’s PTC in effect during the applicable period."

"Based on that analysis, since 2020, more than 80% of shopping residential customers have consistently paid EGS prices above PECO’s PTC," PECO alleged

PECO stated, "PECO’s current policy is an effective way to ensure that CAP customers do not pay prices higher than the PTC for generation service and that other residential customers do not pay higher universal service charges due to that EGS pricing."

"Under PECO’s PIPP [Percentage of Income Payment Plan for CAP], which will be implemented in December 2022, CAP customers receive a maximum CAP credit amount to be used over a 12-month period. If a CAP customer shops at a rate higher than the PTC, the customer will exceed their maximum allowable CAP credit at a faster pace. CAP customers shopping at a rate higher than the PTC also increases the amount that other residential customers must pay to cover the CAP shortfall," PECO said

PECO stated, "Further, the Company recently implemented the reduced energy burdens found in Commission’s 2019 CAP Policy Statement. As a result, CAP customers’ monthly asked-to-pay amounts are even lower than they were previously. EGSs would have to provide substantial discounts in order for a CAP customer to receive a benefit from shopping. For example, based on PECO’s residential PTC of $0.0778 effective on September 1, 2022, an EGS would have to charge $0.002 (i.e., less than 1 cent) to a family of four with average usage (700 kWh) and a household income at 100-150% of the Federal Poverty Level ('FPL') for the customer to save any money shopping."

"At a PTC of $0.0778 per kWh, an average residential customer bill is $122.77 and an average PIPP bill for a CAP customer with household income at 101-150% of FPL is $69. For billing purposes under CAP, PECO will apply the lesser of the PIPP bill or actual charges. In the above example, an EGS would have to charge the CAP customer a rate of $0.002 (i.e., $0.0758 LESS than the PTC) for the CAP customer to receive actual charges lower than the $69 PIPP bill. PECO notes that currently no EGSs have elected to participate in the Standard Offer Program to offer customers a twelve-month contract priced at 7% off of PECO’s PTC in effect from September 1, 2022 through November 30, 2022 ($0.072 per kWh)," PECO said

PECO noted that, under various previously reported PUC orders, CAP customers at the other large EDCs are, or soon will be (effective June 1, 2023), required to take default service

As such, PECO sought an order approving continuation of PECO’s current rule requiring CAP customers to receive default service at the Price-to-Compare until after the effective date of a Commission Policy Statement directing the implementation of CAP shopping in all electric distribution company service areas in Pennsylvania.

Docket P-2022-3035092


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