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Pa. PUC Commissioner: Referral Program Customers Rolling Over To Retail Supplier Contract At End Of SOP "Never" Placed On Lower Monthly Contracts
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In a statement that would have granted rehearing of the Pennsylvania PUC's November 2024 decision denying changes to PECO's electricity Standard Offer Customer Referral Program (SOP), Pennsylvania PUC Vice Chair Kimberly Barrow said that SOP customers who do not take action at the end of the SOP term, and who, as a result, continue service with their SOP-assigned retail supplier at a rate determined by the supplier, are "never" rolled onto a "lower" monthly contract
The PUC, 4-1, denied reconsideration of its November 2024 order in PECO's default service plan proceeding in which, as relevant here, the PUC rejected part of a non-unanimous settlement which would have modified PECO's SOP to require that SOP customers who do not make an affirmative choice at the end of the SOP term shall be dropped to default service
See full details on the recent original order here
For reasons more fully discussed in our story linked above, the PUC in its November order maintained the current SOP design at PECO under which, if the SOP customer does not make an affirmative election at the end of the SOP term, the customer continues service with their supplier as assigned in the SOP, at a rate determined by the supplier
When considering the original order, Barrow and Commissioner Kathryn Zerfuss both would have adopted the policy proposed under the non-unanimous settlement, which would have returned non-acting SOP customers to default service. While Zerfuss believes that such change remains an appropriate policy, Zerfuss did not vote to grant reconsideration (concurring in result only), stating that petitioning parties had not met the standard for rehearing
Barrow voted to grant reconsideration, reiterating many of the points Barrow had set forth in a prior statement concerning the original order (details here)
Barrow said that while active shoppers may realize savings under choice, inactive shoppers, such as those served under the SOP, may be exposed to, "exorbitant energy bills."
"Even though SOP customers receive notices prior to the end of the SOP term,
advising of contract expiration and options, many fail to act and are rolled into higher -- never
lower -- monthly contracts," Barrow said
Barrow also said, "From 1990 to 2014, commercial and industrial electric prices fell by
15% and 14% respectively in retail choice states, compared to a 2% inflation-adjusted fall for
residential consumers."
As noted, the PUC declined to grant reconsideration
In doing so, the PUC reiterated that parties wishing to change the SOP did not provide sufficient evidence supporting a finding that "a harm" has occurred as a
result of the SOP
Also notable is that the PUC specifically declined to narrow or limit the PUC's finding, from the November 2024 SOP order, that a citation to higher costs under retail supplier service, versus default service, does not constitute dispositive evidence of harm
As previously reported, the PUC said that such a simple comparison of costs (especially when not limited to SOP customers but which reflected costs for the entire market) is inconclusive, "because customers could be making shopping decisions based on factors other than price, such as the specific product offered or the length of the contract."
In denying reconsideration, the PUC said, "the OCA seeks to limit, to the instant proceeding, the Commission’s
interpretation of the facts, and its conclusion thereto, with respect to the OCA’s
statements concerning $800 million of harm not proving that harm is occurring.
Although we will deny this request, we also note that in future default service
proceedings, any and all evidence presented would be considered on a de novo basis." [italics in original]
The PUC noted that, since the PUC modified the disputed settlement concerning SOP design, settling parties, who favor the drop of non-acting SOP customers to default service, could have withdrawn from the settlement, which would have essentially resulted in the PUC's order on adoption being vacated, and which would have prompted further hearing proceedings on the SOP and the default service plan as a whole. The PUC noted that no settling party withdrew from the settlement
In a statement, PUC Chair Stephen DeFrank highlighted the success of the PECO SOP program, with over 50,000 customers referred to retail suppliers during PECO's most recent default service term. Such customers who were assigned to retail suppliers received a guaranteed discount off of the price to compare at the time of enrollment, which DeFrank said, "provides a
desirable program where watchful consumers are able to realize savings."
"The SOP
can allow customers to achieve savings over a period of time. But, first, the SOP needs to be
supported by the voluntary participation of competitive suppliers. Revisions to the design of
the SOP that would effectively eliminate supplier participation should be avoided," DeFrank said in support of denying reconsideration
Docket P-2024-3046008
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Pa. PUC Declines To Narrow Finding That Costs For Retail Supplier Service In Excess Of Default Service Is Not A Dispositive Showing Of Customer Harm
January 9, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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