Pennsylvania PUC Clarifies Nonbypassable Costs at FirstEnergy Utilities

The Pennsylvania PUC has clarified the costs to be included in the nonbypassable Default Service Support Rider (DSS Rider) applicable to customers at Met-Ed, Penelec, Penn Power and West Penn Power.

Retail suppliers are relieved from responsibility for costs recovered via the DSS Rider, and such costs are not included in the EDCs' Price to Compare. Accordingly, while the rider is nonbypassable, it is also competitively neutral, from an EGS perspective.

In the PUC's recent order adopting a default service plan at the FirstEnergy EDCs covering the period June 1, 2013 to May 31, 2015, the PUC rejected a petition from retail suppliers to include certain additional costs in the DSS Rider. Specifically, retail suppliers had sought to include in the rider, among other things, PJM unaccounted–for energy (UE), generation deactivation, and network integration transmission service (NITS) costs, because retail suppliers said such costs are not market-based, and could not be hedged. The PUC rejected the inclusion of UE, generation deactivation, and NITS costs in the DSS Rider.

In compliance tariffs, the FirstEnergy EDCs did not include UE, generation deactivation, and NITS costs in the DSS Rider, but did include PJM Regional Transmission Expansion Plan (RTEP) costs and Transmission Enhancement costs (TEC).

Industrials argued that the PUC's prior order rejected the inclusion of these RTEP and TEC costs in the DSS Rider as well.

However, the PUC clarified that RTEP and TEC costs are appropriately included in the DSS Rider. Accordingly, such costs will not be included in the Price to Compare, and retail suppliers will not be charged such costs on behalf of their customers.

The PUC did express concern with the EDCs' tariff language that states that the DSS Rider shall also include, "other FERC-approved PJM transmission charges that will not be reconciled through the Company's Price to Compare Default Service Rate Rider and/or Hourly Pricing Default Service Rider."

If the FirstEnergy EDCs wish to include "other charges" in the DSS Rider, then they should file a tariff change for approval by the Commission, the PUC ordered.

The PUC also directed the EDCs to revise the DSS Rider to make it clearer that non-market-based transmission charges included in the DSS Rider will be billed on an individual customer's 1-CP.

Docket: P-2011-2273650 et. al.