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PPL Electric, Solar Advocates Reach Settlement On Proposal To Change How Customers Are Classified Into Fixed vs. Hourly-Priced Default Service
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PPL Electric Utilities Corporation
and the Joint Solar Advocates have reached a settlement concerning PPL Electric's proposal, made in a rate case, to change how customers are categorized into a default service class (fixed price vs hourly)
Separately, PPL Electric indicated that it has reached a non-unanimous settlement in principle to resolve all issues in the rate case, but a copy of such global settlement was not immediately filed (the global settlement is discussed further below)
Concerning the narrow issue of default service classification, PPL Electric had proposed in the rate case, similar to actions at other Pennsylvania electric utilities, to change how the demand of a customer is measured for purposes of determining such customer's eligibility for the applicable default service class (e.g. fixed price or hourly service), to address "no load" customer generators with distributed generation who are eligible for net metering
PPL Electric had proposed to use a customer's "maximum registered peak load" for the purpose of classifying customers into their respective default service rate schedules (this would essentially move many "no load" customer-generators into the hourly priced service class)
See background here
Under the settlement on the maximum registered peak load issue, PPL Electric and the Joint Solar Advocates would agree that certain existing customer-generators, and additional customer-generators subject to a cap, would be grandfathered into their existing default
service rate class for a period of 10 years (i.e., until December 31, 2036), at which time such customer-generators would
become subject to classification pursuant to the terms of PPL Electric’s default service rate
classifications that are in place on or after January 1, 2037
Specifically, the customer-generators grandfathered into fixed price default service (GSC-1) would include:
a. Customer-generators who submitted to PPL Electric an interconnection application
on or before September 30, 2025, which is the date on which PPL Electric filed
the instant rate case, and whose generating facilities either (i) receive a Permission
to Operate (PTO), or (ii) provide to PPL Electric a completed copy of their
Certificate of Completion on or before December 31, 2026, which is 15 months
from the instant rate case application date; then
b. Customer-generators who submitted to PPL Electric an interconnection application
on or before September 30, 2025, up to the "Cap" defined below, based sequentially
on the date of their signed original Notification of Customer Intent ("NOCI").
No additional customer-generators would be grandfathered into fixed price default service (GSC-1) under the process once
the total amount of nameplate AC capacity for Rate GSC-1 customer-generator systems
that receive Permission
to Operate (PTO) reaches 140 MW-AC
The settlement also addresses compensation for customer-generators who are assigned to hourly priced default service
The stipulation provides that, for purposes of determining compensation for net excess generation for customer-generators
taking service under hourly Rate GSC-2, such compensation shall include, among other compensation listed below, (i) the
capacity portion of Rate GSC-2 as defined below, (ii) line losses; and (iii) a gross-up of
the generation component for the Gross Receipts Tax (GRT).
Under the settlement, the capacity portion for GSC-2 customers shall
equal the PJM Reliability Pricing Model price expressed in dollars per kW-Day, as reported
by PJM for the PL Zone, multiplied by the total obligation peak load for the Large
Commercial & Industrial class for the applicable GSC-2 period, divided
by the total forecasted Large C&I kWh load for the applicable GSC-2 period.
GSC-2 customer-generators would also be paid the GSC-2 energy charge, e-factor (reconciliation), HP adder, PPL Electric administrative charges, and transmission. Energy would be paid based on an average of actual daily, real-time Locational Marginal Prices
at the PPL Residual Aggregate Node as reported by PJM Interconnection, LLC over
the most recent previous 6-month period.
For the transmission compensation paid to net excess generation, for Rate GSC-2
customer generators on distribution Rate LP-4, the transmission
compensation would be converted from a kW rate to a kWh rate by taking the Large
C&I – Primary Billing Demand Rate ($/kW) (w/GRT) from the PPL
Transmission Service Charge (TSC) filing, multiplying by the Large C&I
- Primary Bill Demand kW reported in the TSC filing, and then dividing by
the Large C&I – Primary Projected "Toal" [sic] Retail KWH Sales to Customers
reported in the TSC filing. The estimated kW and kWh in the TSC filing
are derived from PPL Electric’s load forecast. The rate for the current six-month
period is calculated from the rate in effect during the prior six-month
period.
For GSC-2 customer generators on distribution Rate GS-3, transmission
compensation would be the Small C&I TSC rate in effect during the prior six-month
period.
The Joint Solar Advocates include the Coalition
for Community Solar Access (CCSA) and the Solar Energy Industries Association (SEIA)
As to the global settlement principle, PPL Electric said that all the active parties, except the Customer-Generator Coalition (CGC) and Professional Dairy
Managers of Pennsylvania (PDMP), have either (1) agreed to, (2) taken no position on, or (3) do not oppose, the
entirety or portions of the settlement. Further, PPL Electric represented that it is PPL Electric's understanding that CGC and
PDMP only oppose the provisions of the settlement concerning the PPL Electric's Maximum
Registered Peak Load (MRPL) proposal.
In the rate case proposed to be resolved by the yet-to-be-filed global settlement, PPL Electric Utilities had proposed to recover, from retail electric suppliers (EGSs), "on a per-transaction basis," PPL Electric's costs for EDI transactions
PPL Electric had initially proposed that, "The Company will directly assign EDI Transaction fees to each EGS for their EDI transactions. PPL Electric will charge its actual costs incurred for EDI transaction fees".
See background here
R-2025-3057164
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March 6, 2026
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Reporting by Paul Ring • ring@energychoicematters.com
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