Pennsylvania Allows Reliant to Maintain Customers At End of PECO Time of Use Term

The Pennsylvania PUC will allow Reliant Energy Northeast LLC to continue serving customers enrolling with Reliant as the vendor for PECO's optional Time of Use generation pilot program after the initial term of the program, in an order adopting PECO's plan.

PECO, in response the PUC guidance, issued an RFP for a retail supplier, rather than PECO, to serve as the provider for a Time of Use generation product, which is statutorily required to be offered to default service customers. As previously reported, Reliant was selected through the RFP.

However, Reliant asked the PUC to adjudicate certain provisions of the PECO TOU program, including, most notably, treatment of customers at the end of the initial 12-month term.

PECO had proposed that TOU customers be placed on default service, absent an affirmative election, at the end of the initial term. Reliant sought to continue serving the TOU customers absent an affirmative election.

The PUC agreed that Reliant shall continue to serve any TOU program participants after the initial 12-month term, subject to certain conditions.

First, Reliant must maintain any remaining program customers on a TOU rate. Further, "customers should be free to leave Reliant at any time without being subject to a termination fee or any other switching restriction for as long as they remain on the post-program TOU rate," said a motion by Chairman Robert Powelson and Commissioner Pamela Witmer, which the Commission approved.

The motion also served to give PECO approval to offer the program, served by Reliant. As previously reported, the TOU pilot will launch in the first quarter of 2013 and will run for a one-year period, and will involve one solicitation of up to 140,000 default service customers.

"[W]e feel compelled to state once again that the Commonwealth's EDCs do not 'own' their customers. We feel strongly that our EDCs must rid themselves of this mindset, which is a relic from the pre-competition days of vertically integrated service provided by a single entity," Powelson and Witmer said.

In their adopted motion, Powelson and Witmer said that transferring the program customers to PECO's default service at the end of the pilot program, "would result in these customers being slammed in violation of the Public Utility Code and the Commission's Regulations."

"Regardless of whether the TOU pilot program is a default service offering, as argued by PECO, or a competitive offering, as argued by Reliant, it is clear that it is retail, and not wholesale electric service," Powelson and Witmer said.

"It is equally clear that customers participating in the TOU pilot are choosing Reliant as their EGS. The Public Utility Code and the Commission's Regulations make it clear that EDCs shall not change a retail, end-use customer's choice of generation supplier without the customer's consent. These customers, therefore, should remain with Reliant unless they affirmatively choose to receive service from an alternative EGS or to return to PECO's default service offering. Moreover, aside from any slamming concerns or arguments, it is not in the public interest to automatically transfer customers that have made an affirmative choice to move away from PECO's basic default service rate back to that rate without them affirmatively choosing to do so," Powelson and Witmer said.

Reliant had also originally sought a ruling from the PUC that its name shall appear on a TOU customer's bill; however, PECO later indicated it was willing to place Reliant's name on the bill, rendering this issue moot.

Reliant also requested assurances for a coordinated and transparent process between the selected TOU vendors (in addition to selecting Reliant as the supply vendor, Freeman, Sullivan & Company was selected as the program management vendor, tasked with marketing, customer service, customer education, equipment installation, call center support and project management).

The PUC noted, however, that Reliant did not provide details as to what issues needed to be addressed to enable Reliant to work seamlessly with PECO's selected vendor for management functions. The PUC said that it could not adequately address this issue due to this lack of specificity, but said that PECO should make every attempt to ensure that a proper framework exists to enable all three parties to work effectively together to ensure the success of the pilot.

Docket No. P-2012-2297304