Pa. PUC Would Maintain Current Treatment of Uncollectibles in PPL POR Under Non-Binding Poll

In a non-binding poll, Pennsylvania PUC Commissioners unanimously endorsed an ALJ's recommendation regarding the treatment of uncollectibles under PPL Electric's Purchase of Receivables program, including rejecting the Retail Energy Supply Association's proposal (9/7) to institute a nonbypassable surcharge to recover uncollectible costs, as done at PECO.

The non-binding poll, which came in PPL's rate case (R-2010-2161694) does not represent a final vote, and the matter will come before the Commission again at a subsequent meeting.

The Commissioners all agreed with the ALJ's position to adjudicate POR uncollectible issues in the following manner:

• RESA's petition to replace the current uncollectibles discount rate and merchant function charge with a nonbypassable charge to recover uncollectibles should be denied
• RESA's petition for an adjustment to the filed uncollectibles rate, to reflect actual experience under POR rather than a five-year average, should be denied
• RESA's petition to end the tracking of supplier-specific uncollectible rates for small business customers (with the discount rate potentially applied as a remedy against cherry picking) should be denied.

Under provisions of the ALJ's recommended decision endorsed by the non-binding poll, the residential discount rate would increase from 1.37% to 1.855%. The non-residential discount rate would decrease to 0.06% from the current 0.17%.

Regarding the all-in/all-out requirement for POR participation in the residential customer class, Commissioners John Coleman, Jr. and Robert Powelson, and Vice Chairman Tyrone Christy, supported the ALJ's position to retain the all-in/all-out provision as proposed by PPL.

The ALJ had noted that PPL's all-in requirement for residential customers is consistent with an advanced notice of final rulemaking for gas POR under which the Commission said that in order to participate in a POR program, the supplier must include all customers with two specific exceptions: (1) if the LDC's system cannot accommodate a specific product; or (2) if the supplier wants to offer products that are bundled with non-basic services.

RESA, which favors elimination of the all-in requirement, noted that the gas regulations are not final, and that no other Pennsylvania electric distribution company with a POR program uses an all-in requirement. Chairman James Cawley expressed support for RESA's position.

On the all-in issue, Commissioner Wayne Gardner expressed support for the position of the Office of Trail Staff; however it was not immediately clear whether the OTS position is different, in result, from the ALJ's recommendation, as Trial Staff also supported the all-in requirement. OTS does justify the all-in requirement on different grounds than the ALJ, noting that the 30% residential migration and 40% small business migration shows that the current all-in requirement is not a barrier to competition.

All Commissioners supported the ALJ's position to not extend the revised POR program to large commercial customers, as sought by RESA.