Settlement at West Penn Power Would Defer Residential TOU Default Service Option

A settlement regarding West Penn Power's (Allegheny) dynamic generation rate proposals would, for residential service, replace the original Time of Use (TOU) rate proposal with a "competitively neutral" Critical Peak Rebate (CPR) program.

The stipulation, signed by Allegheny, the Retail Energy Supply Association, and the Office of Consumer Advocate, does not resolve any issues related to the non-residential Critical Peak Pricing proposal, which have been reserved for litigation.

Allegheny had originally proposed a Time of Use option for default service customers, including residential (ST 10) customers.

Under the settlement, Allegheny will not offer a Time of Use generation rate to residential default service customers at this time. It may file, as part of its next default service procurement plan, a new residential TOU rate to become effective upon the earlier of the expiration of the Critical Peak Rebate program, or June 1, 2013.

Allegheny will instead offer all residential customers with smart meters, regardless of migration status, its Critical Peak Rebate, which pays customers a flat rate of 50 cents per kilowatt-hour for reducing usage during called peak events. Costs will be recovered from all residential customers on a nonbypassable basis through the energy efficiency surcharge.

Although Allegheny had proposed to separately offer the Critical Peak Rebate in addition to the TOU option, settling parties have agreed that the CPR product shall meet Allegheny's statutory obligation to offer residential customers a Time of Use option, and thus the need for a default service TOU product is obviated at this time.

Additionally, the settlement extends optional hourly default service pricing to all customers on Rate Schedules 20, 22, 23, 24 and customers below 500 kW on Rate Schedule 30 that have had a smart meter installed. Generation for this hourly priced default service offering shall be procured from spot market purchases.

The dockets are P-2011-2218683 and P-2011-2224781.