Retail Supplier Files "Letter" To Pennsylvania PUC Concerning Proposed Price Limits On POR At FirstEnergy PA

UGI Energy Services, LLC (UGIES) filed a "letter" with the Pennsylvania PUC to, "offer[] its perspective as a licensed EGS [retail supplier] on a policy issue of statewide significance," namely, a proposed price cap on a retail supplier product for that product to be eligible for purchase of receivables at FirstEnergy Pennsylvania

A recommended decision (RD) from two Pa. PUC ALJs in the FE PA default service proceeding would provide, for all contracts entered into after June 1, 2027, that POR at FE PA would be limited to products whose rate is at or below the price to compare at the time of enrollment (referred to by UGIES as Paragraph 67)

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UGI Energy Services stressed that its letter on POR, "should not be viewed as a petition to intervene, nor as exceptions to the RD," as UGI Energy Services noted that the PUC recently rejected a late-filed motion to intervene from Spark Energy, with Spark Energy's exceptions on POR not accepted or considered

"Instead, UGIES offers its perspective as a licensed EGS on a policy issue of statewide significance: conditioning POR access on the price an EGS charges for alternative energy supply. If Paragraph 67 is approved, it will directly impact and regulate the supply rate that EGSs may charge their customers, as a threshold to POR program participation. UGIES respectfully asks that the Commission consider this letter as public comment, to the extent it finds that appropriate, as it considers Paragraph 67," UGI Energy Services said

UGI Energy Services in its letter made several arguments raised by retail suppliers during the FE PA default service proceeding

UGI Energy Services said, "Paragraph 67 would use POR eligibility as a hook that re-establishes Commission jurisdiction over generation prices, accomplishing what the Competition Act prohibits expressly. For EGSs [retail suppliers] that participate in the POR, currently all of FE’s residential suppliers (RD at 228), the price of POR-eligible supply would be capped at the PTC. In effect, the utility is setting the rate that these EGSs can charge. Otherwise, EGSs will be penalized by losing POR access. Doing so undermines the competitive market structure for EGSs participating in FE’s POR. EGSs lose an important protection that permits them to compete with default service on more even footing."

UGI Energy Services also argued that a price cap for POR is contrary to the choice act's intent and the PUC's goal that customers be provided innovative and value-added services, which may by their nature be priced higher than a plain vanilla default service product

"Paragraph 67 would steer EGSs away from exactly the differentiated products that retail choice is meant to offer," UGI Energy Services said

A price cap, "create[s] a headwind for the for renewable energy in the retail market, which contradicts the Commonwealth’s ongoing efforts to expand clean energy development," UGI Energy Services said

"Paragraph 67 would discourage EGSs from offering longer-term, fixed-price products, removing a source of price stability that default service does not provide," UGI Energy Services said

UGI Energy Services contrasted a blanket price cap with the limited interventions that Pennsylvania courts have allowed in the retail market, such as a POR clawback mechanism or a price cap for only CAP (low-income) customers who receive customer-funded subsidies

UGI Energy Services said, "Paragraph 67 reaches much farther. It makes price the sole condition of POR eligibility, sets a PTC [price to compare] cap for the price of supply products, and excludes every product priced above default service regardless of the supplier's collection record. Unlike the clawback, Paragraph 67 does not recover credit costs. Paragraph 67 implements a direct condition on supplier rates, not an ancillary limit within a cost-recovery mechanism. It makes the regulated PTC the ceiling for competitive offers included in the POR ... the Competition Act removed generation pricing from public utility rate regulation, and nothing in Respond Power [a precedential case] suggests that POR may serve as a vehicle for restoring it".

UGI Energy Services said that less blunt alternatives may address any concerns with POR, such as recalibrating the thresholds of the existing clawback mechanism for POR, or implementing a POR uncollectible accounts expense discount rate for purchased receivables

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