Pennsylvania Default Service Settlement Includes Reliance on Block (Non-Load Following) Contracts

A settlement in UGI Utilities' default service proceeding would rely on block energy purchases for a portion of default service load for residential and small commercial electric customers.

The settlement would establish the default service design for the period June 1, 2014 through May 31, 2017. The settlement was signed by UGI Utilities, the Office of Consumer Advocate, and the Office of Small Business Advocate

The settlement would maintain UGI's original proposal to combine , for purposes of procurement, residential and small commercial customers (under 100 kW) into a single GSR-1 default service group.

However, while UGI had originally proposed to serve the GSR-1 customers exclusively through non-laddered, load-following contracts, the settlement would add a significant amount of block purchases to the procurement mix.

Specifically, under the settlement, UGI agrees to acquire 50% of its estimated annual requirement for all default service customers with peak loads below 100 kW (GSR-1 Group) from the purchase of blocks (7x24 and 5x16) and spot purchases and sales from and into the PJM market.

The remaining 50% of the GSR-1 Group estimated annual requirements would be provided through the solicitation of full requirements, load following contracts. However, laddering would be introduced into the load-following portfolio, with some 12-month contracts running June to May, and others running December to November.

Both block and load following procurements would occur up to eight months prior to the start of delivery.

The settlement retains UGI's proposal to implement a New/Moving Customer Referral Program and a Standard Offer Customer Referral Program to enhance the competitive retail market.

The settlement provides that UGI will work with the OCA and PUC Staff on scripts for the New/Moving Customer referral program, "to include education about how to compare prices and offers from Electric Generation Suppliers ('EGSs') with the Price to Compare ('PTC') charged by UGI, explaining the difference between fixed and variable generation supply contract options, and educating customers about how UGI's PTC changes over time."

Docket P-2013-2357013