|
|
|
|
|
Pennsylvania Utility Says "Not Clear" That POR, With "Unrestricted" Retail Supplier Pricing, Has Benefited Customers
The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
Addressing a consumer advocate proposal to cap retail supplier rates in order for supplier receivables to be included in the purchase of receivables program, Peoples Natural Gas Company LLC in a rate case brief at the Pennsylvania PUC stated, "it is not clear that the POR program, when
coupled with unrestricted supplier pricing, has actually led to a cumulative benefit for Peoples’
customers."
As first reported by ECM, the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA) has recommended that the PUC impose a rate cap on retail supplier plans in order for the receivables from such plans to be eligible for Peoples' purchase of receivables (POR) program
See full details here
In a brief, Peoples said that approximately 95.8% of residential shopping customers pay more than the price to compare (PTC) for
commodity service, and that the average supplier price is 82% above the PTC, with some supplier
prices reaching as high as ten times the PTC.
Also citing to price data reported earlier this week (story here), Peoples said that, "the Company is concerned about customers paying well above the
PTC."
Peoples said, "The Company believes that CAUSE-PA’s recommendation could help customers save
money on natural gas commodify [sic] costs ... Maintaining adequate protections for customers who choose an alternate supplier is an
important issue that CAUSE-PA has brought to the forefront for consideration in this proceeding.
Overall, the Company supports a balanced approach between promoting competition and
protecting customers. Concerns regarding the impact of supplier pricing is not necessarily limited
to only suppliers in Peoples’ service territory. Thus, the retail market reforms such as the one
suggested by CAUSE-PA in this case could be appropriate for a separate rulemaking or policy
proceeding where all interested stakeholders can participate."
The Retail Energy Supply Association disputed CAUSE-PA's conclusions from the price data, and argued that the POR limits would be discriminatory and would amount to impermissible price regulation
RESA said, "the aggregate statistics both witnesses rely upon do not show causation ... [the] statistic that 'approximately 95.8% of residential
shopping customers pay more than the PTC... and the average supplier price is 82% above the
PTC,' are aggregate, point-in-time comparisons to the PTC. Neither witness [Peoples and CAUSE-PA rate case witnesses] compares what
shopping customers actually paid to what they could have paid under the lowest-cost supplier offer
available in the market during the same period, and neither accounts for contract term, price
certainty, or other product attributes a customer may have deliberately chosen."
RESA said, "A customer on a
multi-year fixed contract will appear to be 'paying more than the PTC' in any month the PTC
happens to be low, without having been harmed in any meaningful sense. Nor does either witness
show that suppliers actually rely on the averaged POR discount in setting their prices, or that
uncollectible amounts attributable to NGS customers are disproportionate to system-wide
experience[.]"
RESA said that retail supplier-originated receivables account for less than one-half of one percent of
Peoples’ average residential write-offs, and less than two-tenths of one percent of write-offs among
low-income accounts
RESA noted that supplier uncollectibles are actually decreasing as reflected in Peoples' rate case proposal to reduce the POR discount from 2.20%
to approximately 1.93%, which RESA called, "a reduction that cuts directly against, rather than supports, the notion
that suppliers are shielded from uncollectible risk or that the discount is growing as an incentive
problem".
RESA said, "Conditioning access to an essential billing service on whether a supplier’s price falls at or
below the PTC is, in essence, unlawful price regulation."
RESA said, "If Peoples or the Commission may deny
a supplier access to POR because its price exceeds a Commission- or utility-set threshold, that is
functionally identical to capping the supplier’s price, since a supplier priced above the line faces
the loss of POR and the disruptive, duplicative, and customer-unfriendly implications that follow.
As RESA’s witness explained, '[t]hat is the essence of rate regulation,' and neither the
Commission nor any utility is authorized to regulate the prices an NGS charge so long as those
prices are consistent with the customer’s agreement with the supplier."
RESA said, "The proposal is also independently unlawful as discrimination in the provision of utility
service. POR is a utility service, and a utility service 'cannot be provided in a discriminatory
manner.' Under the CAUSE-PA/Peoples proposal, Peoples would pick winners and losers
among otherwise creditworthy, Commission-approved suppliers based solely on a price criterion
that is itself unregulated -- rather than treating all qualifying NGSs neutrally and providing equal
access, as the nondiscrimination requirement demands".
RESA said, "The proposal is also internally incoherent. The PTC is not a market price; it is Peoples’
own bundled default-service rate, driven by purchased-gas costs with guaranteed cost recovery
and reset on a quarterly cadence unrelated to the timing or duration of supplier contracts. If, as
CAUSE-PA and Peoples assume, the PTC is nonetheless a valid, apples-to-apples benchmark for
supplier pricing, then the proposal would let one competitor -- Peoples -- set the effective price
ceiling for its rivals in the same market, a result inconsistent with the General Assembly's and the
Commission's understanding of retail competition. If, on the other hand, supplier products and
utility default service are not directly comparable -- as RESA submits is the case, given differences
in contract term, price certainty, and other product features -- then the PTC is not an appropriate
benchmark for supplier pricing at all, and the premise for the entire proposal collapses".
RESA said, "Consider a customer
who selects a 24-month fixed-rate product for the budget certainty it provides. If, fifteen months
into that contract, the PTC moves and the supplier's price is now above it, the supplier -- under
the proposal -- would not be able to renew that contract, even though it provided 15 months below
the PTC and even though the PTC could just as easily move the other way three months later. A
supplier in that position faces only bad options: build or contract for its own billing and collection
capability on short notice, at significant cost; continue on Peoples’ consolidated billing without
POR, in which case Peoples has no incentive to actively collect on receivables it no longer owns
and the supplier's cash flow deteriorates; or exit the business relationship with the customer
altogether. None of these outcomes serves the customer who chose that supplier's product, and
any resulting shift of customers back onto duplicate billing infrastructure raises costs that are
ultimately borne by all ratepayers."
Docket R-2026-3060855
ADVERTISEMENT Copyright 2026 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
prohibited. You are not permitted to copy any work or text of EnergyChoiceMatters.com without the separate and express written consent of EnergyChoiceMatters.com
August 28, 2026
Email This Story
Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW -- Enrollment & Rate Management Director - Retail Supplier
• NEW -- Strategic Sales Channels Manager - Retail Supplier
• NEW -- Controller - Retail Provider
• NEW -- Manager, Product I - VXRetail (Retail Energy)
• Refreshed 5/27/26 -- Manager, ISO Coordination (electricity), Retail Supplier
|
|
|
|
|