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Retail Supplier Says Proposed Pennsylvania Order Banning Auto-Renewals Is Inconsistent With PUC Precedent
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Various retail energy suppliers have filed briefs in opposition to a proposed decision from two Pennsylvania PUC ALJs that would adopt major reforms to the retail electric market at FirstEnergy Pennsylvania, including excluding from the purchase of receivables program any product whose rate exceeds the price to compare, and the banning of auto-renewals
The proposed order, in the FirstEnergy Pennsylvania default service proceeding, had been first reported by EnergyChoiceMatters.com, and full details can be found in our prior story here
The recommended decision (RD) would require that, for new residential contracts entered into after June 1, 2027, the retail supplier must drop such customer to default service at the end of the fixed rate term, unless the customer makes an, "affirmative choice to remain with the EGS [retail supplier] in response to the notices required by the Commission’s regulations at 52 Pa. Code § 54.10."
In a brief, Spark Energy, LLC argued that such provision violates 66 Pa. C.S. § 2807(d)(1) governing the "change [in] a customer's electricity supplier", citing the PUC's recent decision prohibiting opt-out municipal aggregation as supporting such finding. Note that Spark Energy, LLC is not currently an intervenor in the case, but sought a late-filed intervention
Noting that the proposed order would require that a customer be moved to default service without the customer's affirmative consent for such drop, Spark said, "The Commission held within the past year that transfers of this kind violate the statute," citing the PUC's opt-out aggregation decision
In the municipal aggregation case, Spark said that, "the Commission denied boroughs authorization to
move residents into an aggregation program absent advance consent, holding that 'granting the
Boroughs’ requested authorization would directly violate Section 2807(d)(1) of the Code and
require the Commission to exceed its authority by permitting the type of slamming that the Choice
Act prohibits.'"
Spark argued that statute does not support treating a drop to default service differently in terms of requiring affirmative consent for any switch in the customer's generation service
"The distinction the proponents draw -- that a return 'to default service (not another
supplier)' is different in kind, RD at 180 -- has no footing in the statutory text. Section 2807(d)(1)
protects the customer’s exercise of choice; it does not identify a favored destination. A customer
moved from the supplier they chose to a provider they did not choose has had their supplier
changed without consent whether the recipient of their load is a competing EGS or the incumbent
utility."
Spark further said, "If anything, the transfer is more difficult to reconcile with the Choice Act when the
beneficiary is the incumbent, because the effect is systematically to return load to the entity from
which the General Assembly directed that generation service be unbundled."
Accomplishing the drop of customers to default service absent affirmative consent for renewal also requires a waiver of the PUC's current rules governing customer renewals. The RD would grant such waiver
In a separate brief, Town Square Energy East, LLC and WGL Energy Services, Inc. (TSE/WGES) jointly argued that a waiver cannot accomplish the proposed order's recommended outcome, and alleged that the proposed order's policy banning auto-renewals constitutes an impermissible rule change outside of the required rulemaking process
TSE/WGES argued that the existing rule addressing the treatment of a customer at renewal applies to retail suppliers, not utilities. The utility has no obligation under the rule, which requires renewal notices to be sent and requires suppliers to continue service to customers absent an affirmative action by the customer
As such, TSE/WGES said FE PA may not request a "waiver" of a rule under which the EDC has no obligation
TSE/WGES said that the relevant rule, "concludes by directing EGSs how to proceed in situations where the customer does not respond to the expiration notices, and mandates that fixed duration contracts 'shall be converted' to either month to month contacts or another fixed duration contract as long as the new contract allows cancellation at any time without a cancellation fee and 'shall remain in place' until the customer chooses another option." (emphasis by TSE/WGES)
TSE/WGES said, "What the R.D. [recommended decision] has characterized as a 'waiver' is not a waiver at all. It is a request to completely override a carefully constructed and consistently enforced regulation that has governed EGS rights and duties regarding contract expirations throughout the Commonwealth for over a decade, and replace it with a new contract renewal framework that only applies in FirstEnergy territory. In other words, FirstEnergy is proposing to amend or repeal the regulation at 52 Pa. Code 54.10, not request a waiver from it."
TSE/WGES further said that the sought waiver fails the PUC's requirement that waivers be "narrowly crafted" and "generally temporary in nature"
TSE/WGES said that the sought waiver would apply to the entire market, and would not be temporary
TSE/WGES said, "The R.D. ignores the legal defects with FirstEnergy’s EGS Contract Renewal proposal and treats the proposal as a simple element of an EDC’s default service plan over which the EDC has discretion. The R.D. fails to recognize the Commission’s EGS contract renewal regulation is not analogous to a standard component of an EDC default service plan, but rather is a formally promulgated and legally binding rule that applies statewide until rescinded or modified through a formal rulemaking."
In a separate brief, Shipley Energy and IGS Energy jointly said that the price limit for an EGS product to be eligible for purchase of receivables is discriminatory and amounts to impermissible regulation of retail supplier rates -- a power the PUC lacks
Shipley and IGS argue, under the POR limit, "FirstEnergy is proposing that it be able to discriminate as between suppliers based on the offered retail price compared to the PTC [price to compare][.]"
However, Shipley and IGS said that the, "PTC has never been recognized in statute as a mandatory benchmark for evaluating the worthiness of an EGS price."
"Instead, the Act, requires that there be a multitude of offerings and prices. 66 Pa. C.S. § 2804. The net-net of the application of the law to FirstEnergy’s proposal and the RD’s merely facial review of its argument is that there is no authority in the Code to discriminate as between two groups of suppliers, which violates Section 1502, but even more important, discrimination on price alone, contradicts the Commission’s statutory inability to regulate the rates of EGSs," Shipley and IGS said
In a separate brief, the Retail Energy Supply Association said, "The end hope of the RD ... is to limit the pricing of all generation to the PTC (because
EGSs not doing so will lose access to an integral market mechanism, POR) under the mistaken
belief that such price will be the more generally affordable option. The Commission may not
accomplish indirectly through POR eligibility what the Competition Act prohibits directly by
making the EDC’s default-service price the dividing line for regulatory consequences imposed
on competitive generation prices. Implementing a restriction with the goal of regulating the
price of generation, as the RD supports here, is patently inconsistent with the Competition Act
and the Commission cannot do it."
Retail suppliers opposed the recommended decision's reliance on various supplier price and uncollectible data to support the RD's findings, and suppliers offered various rebuttals
As one example, Shipley and IGS argued that, "The RD’s finding that POR-related uncollectible rates ran 22–56% higher, and $23–$38 versus $8–$15 per customer, establishes a correlation between shopping accounts and higher uncollectibles -- it does not establish that above-PTC pricing causes that outcome, as opposed to other factors. (RD at 227.) The EGS Parties' briefs identified that FirstEnergy's own uncollectible-allocation methodology allocates by billed revenue rather than by supplier-specific write-offs -- a methodological gap the RD does not address."
As previously reported, the RD would adopt without modification a non-unanimous settlement which includes the various retail market reforms. As the RD has proposed approval without change, signatories to stipulation, such as the Coalition for Affordable Utility Services and Energy Efficiency
in Pennsylvania (CAUSE-PA) and FE PA, did not file exceptions to the RD
Docket P-2026-3060298
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Retail Suppliers Allege Proposed Order Contravenes Rulemaking Process, Establishes Discriminatory Price Regulation
September 2, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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