PECO Withdraws Proposed Change to Generation Reconciliation Charge

PECO has withdrawn its request to modify the reconciliation of the Generation Supply Adjustment (GSA) in light of the Pennsylvania PUC's ongoing investigation of the existing default service model, including the reconciliation of default service rates.

Specifically, PECO had originally requested to collect any Generation Supply Adjustment over or under-recoveries plus associated interest for residential customers (Procurement Class 1) on an annual basis instead of quarterly (see 4/12).

PECO originally sought the change on the basis that the annual reconciliation of generation costs would smooth out quarterly fluctuations that are not directly related to market price conditions. Under its original proposal, PECO would have continued to adjust residential generation charges on a quarterly basis to reflect the projected market price of generation supply, but would no longer include quarterly reconciliations.

Retail suppliers opposed the change to an annual reconciliation, warning that it could create large deferrals which then prompt the imposition of a migration rider on customers departing default service, under which customers leaving default service would continue to pay default service reconciliations for a period of time after leaving PECO default supply (see 4/26).

PECO's tariff allows for such a migration rider, but it is not currently in effect; PECO may petition to institute a migration rider on 15 days' notice.

However, in July, the PUC listed the"[p]ricing of default service, including term and reconciliation" as an area for possible long-term change under the PUC's investigation of the retail electric market.

"[P]ursuing [the] individual annual reconciliation proposal at a separate docket is no longer prudent in light of the Commission's directive to review the reconciliation of default service rates as part of the Retail Market Investigation," PECO said in withdrawing the filing.