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Settlement Would End Customer Referral Program At PPL; Settlement Supported By Retail Suppliers
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A settlement among several major parties in the default service proceeding of PPL Electric Utilities ("PPL") in Pennsylvania would terminate PPL's standard offer customer referral program, while setting a collaborative to address concerns raised by retail suppliers relating to PPL's communications to shopping customers about choice and the customer's specific rate and supplier
Notably, the settlement is supported by the Retail Energy Supply Association. Other signatory parties include PPL, the Office of Consumer Advocate, Office of Small Business Advocate, and CAUSE-PA. Settling parties averred that no party in the proceeding opposes the settlement
The settlement would terminate the standard offer customer referral program (SOP) for the term of DSP VI, which would be June 1, 2025 through May 31, 2029.
Under the current SOP, interested customers are assigned to a participating retail supplier and receive for 12 months a rate that is 7% below the price to compare in effect at the time of SOP enrollment. At the end of the SOP 12-month term, the customer remains with their assigned retail supplier, at a rate determined by the supplier, absent an affirmative action by the customer to sign a new contract or take service from another supplier or default service
The end of the SOP for the DSP VI term does not prevent any settling party from proposing an SOP program as part of consideration of any future default service plan
As first reported by EnergyChoiceMatters.com, PPL in its default service petition had proposed various changes to the SOP, including dropping customers to default service at the end of the SOP term absent an affirmative action by the customer, and additional communications to SOP customers concerning their retail supplier and supplier rate. OCA and CAUSE-PA favored ending the SOP
RESA explained its support for a settlement ending the SOP in the context of PPL's proposed changes
RESA said in a statement accompanying the settlement that, "RESA struggled with supporting a settlement recommending the end of the last remaining program which encourages customers to shop. As discussed at great length in the testimonies of [RESA's witness], RESA strongly disagrees with the reasons offered by PPL, OCA and CAUSE-PA in support of ending the SOP. However, reforming the SOP in the manner initially proposed by PPL would have been a costly and time consuming exercise that would very likely have resulted in the end of SOP due to a lack of EGS participation."
"Thus, given the inevitability in this service territory of the end of the SOP if PPL’s initial proposals were adopted, RESA worked in good faith with the parties to develop a Settlement that reasonably addresses other concerns raised by RESA. Importantly, as discussed [below], the Settlement provides a process to review PPL’s communications with EGS [retail supplier] customers. In addition, by agreeing to end the SOP, no 'new' Commission approved opportunities for PPL to communicate with EGS customers in the context of the SOP or justified by the existence of the SOP will be created. For all these reasons, RESA has reluctantly agreed to support the Settlement’s proposal to end the SOP in the hopes that the collaborative process can productively focus on avoiding future communications from PPL to EGS customers that can be considered misleading or anticompetitive," RESA said
PPL Communications To Shopping Customers
The settlement requires that a collaborative be established, "to determine the timing, frequency, and content of PPL Electric’s written communications sent directly to shopping customers about their contracts and rates for competitive electric generation supply service."
During the period in which the collaborative is occurring, PPL agrees to not send "written communications directly to shopping customers" that contain the customer’s generation rate or which include the name of the customer’s retail supplier. This prohibition does not apply to bill messages, postings to PPL's website, or communications with customers in response to inquiries or complaints, and also does not apply to PPL's customer assistance program (CAP) for low-income customers (OnTrack).
The settlement provides that the collaborative shall discuss whether changes are needed on customer bills to ensure that shopping customers are able to make, "a mathematically accurate dollar-for-dollar comparison" between their supplier's charges and, "the default service rate."
To the extent the collaborative does not reach consensus, any party to the collaborative may seek a PUC Staff decision on the PPL shopping customer communication matters from the PUC's Office of Competitive Market Oversight (OCMO).
As first reported by EnergyChoiceMatters.com, RESA had in the default service proceeding, and in an earlier separate petition, raised various concerns about PPL's communications to shopping customers and specific language contained therein. Among other concerns, RESA had alleged that a communication from PPL Electric to a shopping customer had stated, "We want to make sure that your bills are as low as possible. That’s why we’re reminding you to take a few minutes to compare your current supply rate (noted above) with other options that are available."
Under the settlement, RESA agrees to withdraw with prejudice its petition for a declaratory order, as it relates to the specific communications cited in such petition, that had sought a PUC ruling finding that the communication noted above, and similar communications from PPL cited in the petition, are unlawful because, among other things, the communications are alleged to impermissibly "promote" default service
RESA said in a statement in support of the settlement that, "this collaborative will give interested parties an
opportunity to provide feedback on whether the PTC [Price to Compare] should be determined in a different way or
used in a way that is more helpful to customers considering their options in the market."
Price to Compare Language
The settlement explicitly states that the settlement does not address issues raised by RESA regarding the use of the term "Price to Compare". Parties reserve their right to address or respond to such issues in any future proceeding
Shopping & Customer Assistance Program
Customers participating in OnTrack, PPL's customer assistance program (CAP), are prohibited from shopping for a retail supplier. Currently, if a shopping customer becomes eligible for CAP and seeks to enroll in CAP, the customer must first, on their own, cancel service with their retail supplier. If this cancellation does not occur, the customer’s CAP enrollment is rejected.
Under the settlement, for customers eligible for CAP, PPL will automatically move currently shopping customers, who seek to enroll into CAP, to default service.
Retail suppliers will be prohibited from charging an early termination fee to customers whose EGS service ends due to enrollment in CAP
Default Service Procurements, Products, Rate Changes
The settlement generally approves PPL's proposed default service procurements and rate setting, with some changes related to block purchases
Notably, the settlement would accept PPL's proposal to end the use of 6-month contracts, and to introduce 24-month contracts, as part of the fixed price full requirements contracts used in the default service portfolio for non-hourly customers (residential and small C&I)
Under the settlement, 80% of the residential SOS portfolio served under full requirements contracts would be served by laddered 24-month contracts, after a transition period from the current portfolio
The 12- and 24-month contracts would be laddered in a similar manner to the current DSP, except that the procurement dates would be held earlier (discussed further below).
In addition to the full requirements contracts for residential customers, PPL Electric would procure 150 MW of Long-Term Block contracts for 10-year terms for residential SOS. However, the settlement modifies PPL's original proposal so that these blocks are for energy only, and will not include capacity as originally proposed. The 150 MW in block energy contracts represents about 15% of residential SOS load.
The block energy would not apply to small C&I SOS, and small C&I SOS would be served 100% by full requirements contracts. After a transition period due to existing SOS contracts, the settlement provides that 80% of small C&I default service would be served under laddered 24-month contracts
The procurement portfolios and procurement dates for residential and small C&I customers are linked below (the linked schedules are based on PPL's original filing, which remains accurate except that the reference to a block energy/capacity product has been modified as noted above and will now be blocks of energy only)
Residential
Small C&I
The settlement would adopt PPL's proposal that full requirements suppliers shall be responsible for AEC obligations associated with their load, a change from the current obligations under the full requirements contracts
PPL Electric would be permitted to enter into one or more long-term (20-year) contracts to procure up to 30,000 PA Solar AECs annually. These would be used for AEPS compliance associated with the block residential energy. PPL would also still hold auctions for AECs for legacy full requirements (non-AEC) contracts
Under the stipulation, PPL would move the full requirements procurement dates further away from the delivery date. PPL had cited more favorable results in earlier procurements in proposing such change
The settlement's adopted schedule will hold Full Requirements solicitations in February and July of each year, as compared to the April and October solicitation periods in the current default service plan
For mass market customers, changes in the Price to Compare would continue to be every 6 months
Hourly pricing would apply to customers over 100 kW.
P-2024-3047290
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Settlement Kicks To Collaborative Retail Supplier Concerns About PPL Electric's Communications To Shopping Customers
Default Service Settlement Ends Use Of 6-Month SOS Contracts For Mass Market Customers, Will Use 24-Month Contracts For 80% Of SOS
August 27, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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