Report: Nearly One-Third Of Customers Remaining With Retail Supplier After End Of Standard Offer Program Paid 50-100% More Than Current Price To Compare

Nearly 90% Of Former Standard Offer Program Customers Paid Rate Greater Than Price To Compare

December 15, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Duquesne Light filed a report on its residential Standard Offer program (SOP) which indicated that nearly 90% of customers who remained with their SOP retail electric supplier (EGS) after the SOP term ended were charged a rate greater than the then-effective utility price to compare (PTC).

Duquesne Light's analysis includes residential customers that began participating in the SOP during the period January 1, 2018, through July 15, 2022, and whose initial 12-month SOP period concluded on or before July 3, 2023. The analysis only includes SOP customers that completed the full 12-month SOP term

Duquesne Light reported that, "The Company reviewed residential customers who entered into the SOP during the period January 1, 2018 through July 15, 2022 and whose initial 12-month SOP period concluded on or before July 3, 2023. ... [T]his analysis examined customer actions for the four months following SOP contract expiration ... [W]ithin one month of the expiration of their SOP contract approximately 21% of residential customers took affirmative action.4 Nearly 79% of customers remained with their existing EGS and were enrolled into new non-SOP contracts.5 Of these customers, approximately 19% left those contracts within four months of the expiration of their SOP contract. In total, 60% of residential customers remained with their supplier, on a non-SOP contract, following the four-month period."

Duquesne Light reported that, "Approximately 90% of the residential customers who were enrolled into a new, non-SOP contract with their supplier paid a rate greater than the Company’s then-effective PTC within the first month of the new contract."

"Of these, 84% were charged more than 10% over the then-effective PTC. Many were charged significantly more than the PTC: 34% were charged rates 50-100% more and 19% were charged greater than 100% more than the then-effective PTC. Even after the fourth month, 32% were charged 50-100% over the then-effective PTC and another 21% were charged greater than 100%," Duquesne Light reported

"By the end of month four, 12% of customers remaining with their EGS post-SOP term were being charged a rate less than or equal to the then-effective PTC. By comparison, only 10% paid a rate less than or equal to the then-effective PTC at the end of the first month. This suggests that some customers who were being charged rates higher than the PTC took affirmative action by switching suppliers, returning to default service, or renewing their SOP contracts," Duquesne Light reported

"The Company’s analysis shows that a large portion of residential customers take no action upon the expiration of the SOP term and remain with their SOP EGS at a new, non-SOP rate. Nearly 90% of those customers were charged a rate greater than the then-effective PTC. As a result, customers who did not take affirmative action upon expiration of their 12-month SOP period tended to experience higher electric bills than they would have received had they switched to default service or a lower-cost EGS product," Duquesne Light reported

"In total, these customers were charged approximately $1,364,600 by their EGS during the four months following their initial SOP period. In comparison, these customers would have been charged a total of approximately $877,841 for default service during the same time period. These customers were thus charged approximately $486,759 -- or about 55.45% -- more than the corresponding default service charges," Duquesne Light reported

Duquesne Light reported that, for the prior reporting period 1/1/18 to 6/9/22, former SOP customers on non-SOP contracts for the four months following expiration of the SOP paid, in aggregate, 40.70% above the then-current PTC, compared to 55.45% higher than the PTC for the updated reporting period of 1/1/18 to 7/3/23

Duquesne Light reported that, after four months following expiration of the SOP term, 88% of customers who remained with their SOP EGS for the post-SOP term were charged more than the then-effective PTC

Duquesne Light included the following summary chart:

P-2020-3019522

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