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PPL Electric: 2021 Survey Showed More Than 75% Of Respondents Did Not Know They Were Paying More Than Price To Compare

PPL Electric Says Competitively Neutral Communications Concerning Customers' Electric Rate With Retail Supplier, Default Service Are Permissible

Duquesne Light Says Communicating That Customer Is Paying Rate Higher Than PTC Is Consistent With Statutory Policy To Keep Uncollectible Expenses Low

December 21, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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PPL Electric Utilities Corporation (PPL or PPL Electric) urged the Pennsylvania PUC to deny a petition from the Retail Energy Supply Association and NRG Energy, Inc. that had asked the PUC for a declaratory order finding that certain communications sent by PPL Electric to supply customers of electric generation suppliers (EGSs) about their electric supply prices and contracts with EGSs are unlawful

See background on the petition here

PPL Electric said that its communications are competitively neutral and do not violate its most recent default service order (DSP 5), and that they do not violate past precedent with regards to default service provider communications

PPL Electric noted that it has, via email, communicated to shopping customers concerning the price to compare and the customer's selected retail supplier rate

"The emails were tailored to specific customer situations, with customers receiving different messages depending on whether they were paying above or below the PTC. The emails sent to customers paying above the PTC explicitly acknowledged the following: 'There may be legitimate reasons why you are paying more than the Price to Compare. For instance, you may have chosen to purchase additional services or renewable energy sources,'" PPL Electric said

Notably, PPL Electric said that, in the second quarter of 2021, PPL Electric commissioned a third party to conduct a mixed-mode survey of customers paying more than the PTC.

"The survey’s purpose was to get a better understanding of the customers’ reasons for paying a higher rate for electric generation supply service," PPL Electric said

The survey involved 2,975 total respondents.

PPL Electric said that the results of that survey showed the following:

a. More than three-quarters (75.74%) of respondents were unaware or did not know if they were paying more than the PTC.

b. Of those respondents aware that they were paying more than PTC, nearly one-third said they were not willing to pay more.

c. Of those respondents aware that they were paying more than PTC, approximately 16% said that they pay more for 'clean/green energy.'

d. Over 60% of respondents were unfamiliar with the length of their contracts or contract terms/expiration dates.

e. Approximately 56% of respondents stated that they never heard or did not know how frequently they heard from their EGSs.

f. Approximately one-third of respondents said that they did not know how often they shop for electric generation supply service.

"As such, PPL Electric maintains that significant improvement must be made in educating and informing customers about shopping in the competitive market for electric generation supply service," PPL Electric said

"The Company’s competitively-neutral communications to shopping customers are intended to help achieve that goal," PPL Electric said

"RESA and NRG’s arguments are based on a false premise -- that PPL Electric’s communications promote default service. In reality, the communications are competitively-neutral, as nothing in them advocates for customers to switch back to default service," PPL Electric said

"The communications show the customers their current rate for electric generation supply service and PPL Electric’s PTC and explain their options in light of rising energy prices, such as contacting their EGS for more information, switching to another EGS, going to PPL Electric’s website for more information on shopping, or returning to default service. Additionally, the Company acknowledged in its email communications to customers paying more than the PTC that there may be legitimate reasons why they are paying more than the PTC," PPL Electric said

More specifically, PPL Electric said that, "when PPL Electric’s communications were being sent to customers paying more than the PTC, the communications explicitly stated, 'There may be legitimate reasons why you are paying more than the Price to Compare. For instance, you may have chosen to purchase additional services or renewable energy sources.'"

"In several of the communications attached to the Petition, PPL Electric actually showed the customers that their current electric generation supply rates were lower than PPL Electric’s current default service rate, upcoming default service rate, or both," PPL Electric said

PPL Electric distinguished its communications from a prior PUC decision [in 2000 related to PECO] which had found that certain PECO communications promoting default service were not permissible

PPL Electric said that, in that prior case, "the Commission found that PECO’s letters 'promoted [its] 'superior service'' and stated that the customer could save 'time and effort by simply choosing to stay with' the EDC, which implied that PECO 'has better, or superior, service than the competitors.'"

"Here, none of the Company’s communications advocate for customers to switch to or remain on default service, nor do they imply that PPL Electric provides superior service to EGSs," PPL Electric said

PPL Electric also said that a recent default service plan decision (DSP 5) with respect to the Standard Offer program (SOP) does not prohibit the PPL Electric communications at issue, as PPL Electric said that the DSP 5 decision related only to certain specific communications proposed under a change in the SOP plan which was not adopted

"The Commission never held that PPL Electric is prohibited from communicating with SOP customers or other shopping customers. The Commission simply denied the Company’s proposal to send a communication to customers, informing them that they would be returned to default service at the end of the SOP contracts if they failed to take an affirmative step to remain with the current EGS or switch to a new EGS. This resulted from the Commission’s denial of PPL Electric’s proposal for customers to be returned to default service in those situations. See DSP 5 Order, p. 98," PPL Electric said

"In fact, Chairman Brown Dutrieuille issued a Statement on the DSP 5 Order 'encourag[ing] PPL to continue to educate customers about the shopping options available to them at the end of the SOP,'" PPL Electric said

PPL Electric further alleged that, "RESA and NRG’s requested relief, if granted, would violate PPL Electric’s free speech rights under the U.S. Constitution and the Pennsylvania Constitution. Although commercial speech is afforded less protection than other forms of expression, the Commission does not have unrestricted power to regulate PPL Electric’s speech. Indeed, the Commission can only prohibit PPL Electric from sending false, misleading, or deceptive communications under the commercial free speech doctrine. Here, RESA and NRG do not allege that PPL Electric’s communications are false, misleading, or deceptive. At most, RESA and NRG allege that the Company’s communications are 'creating unnecessary confusion' by sending communications around the same time that EGSs are sending notices to customers. (Petition ¶ 24.) Even if somewhat duplicative of the EGSs’ notices, truthful communications cannot be false, misleading, or deceptive. Thus, the Commission cannot grant RESA and NRG’s request that PPL Electric be ordered to cease sending truthful communications to its customers."

In separately filed comments, Duquesne Light called the relief sought by RESA/NRG "extreme", as Duquesne Light said that it provides similar educational materials to its customers

"[I]n Paragraph 25 of the Joint Petition, the Joint Petitioners argue that PPL, as the EDC, 'has no role in communicating with shopping customers who have selected EGSs in the competitive market about their supply contracts with EGSs.' This is an extreme position which certainly warrants factual investigation and hearings. The communications at issue in the Joint Petition involve basic education about shopping in Pennsylvania, checking the customer’s energy supply price and providing a link to a Shopping website. See Appendices B and C to the Joint Petition. Duquesne Light provides similar educational materials to its customers," Duquesne Light said

Duquesne Light further said, "Customers who are paying a supply rate significantly higher than the PTC will have a higher uncollectible balance if they are not able to pay their electric bill. Under Duquesne Light’s Purchase of Receivables ('POR') program, the Company purchases account receivables from participating EGSs at a discount, and Duquesne Light reimburses participating EGSs for their supply charges regardless of whether Duquesne Light receives payment from the customer. This makes Duquesne Light, and all of its customers, ultimately responsible for uncollectible expense for EGS supply rates because uncollectible expenses are recovered from all customers. Customers who are paying higher EGS supply rates that end up defaulting on their bill will increase the EDC’s uncollectible expense, and in turn, increase rates for all customers. An EDC’s larger uncollectible balances result in higher rates for all of the EDC’s customers."

"By informing customers about potential cost savings, EDCs like Duquesne Light are protecting the interests of the customer base and acting consistently with the underlying policy of Chapter 14 to keep uncollectible expense low," Duquesne Light said

In separately filed comments, the Office of Consumer Advocate and the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA) each opposed the RESA/NRG petition

Citing previously reported data, CAUSE-PA alleged, "In each of the most recent default service proceedings, data has emerged showing that residential shopping customers pay significantly higher rates compared to default service customers, on both an aggregate and per-customer basis. Over a five-year period, residential shopping customers were charged over $1.5 billion more than the applicable default service price[.]"

Docket No. P-2022-3036985


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