PPL to Rely on Retail Suppliers to Offer Time of Use Product to Default Service Customers

PPL has filed at the Pennsylvania PUC a proposed new pilot Time of Use program for default service customers which would rely on retail electric generation suppliers (EGSs) to serve customers under a Time of Use program required to be offered as part of a default service plan.

Unlike at PECO, where a single EGS was selected to serve the default supply TOU requirement, PPL has proposed that multiple EGSs can compete to offer service to residential and small commercial default service customers seeking a Time of Use rate option.

EGSs would define most aspects of the TOU products, though some restrictions were established by PPL.

Specifically, per PPL's filing, the TOU rate options offered by the EGS participants shall consist of a rate that varies during different time periods, but not as frequently as each hour, and includes off-peak and on-peak periods, with rates during the on-peak periods which are higher than rates during the off-peak periods.

Notably, under the proposed program, an EGS participant may not include an early termination fee as part of the TOU product offered under the program, and shall provide notice to customers that there is no early termination fee to any TOU customer who leaves the TOU rate option offered by the EGS under the program.

Under the language in PPL's proposed tariff, "The EGS Participant will define the term of the contract between EGS and customer, which may not be less than 3 calendar months, coinciding with quarterly changes in PPL Electric's price-to-compare."

It was not immediately clear how this provision will work, and how the EGS offering shall coincide with the PPL Price to Compare (PTC) quarters.

Specifically, it was not clear if customers are only permitted to enroll onto an EGS offering under the program at the start of a PTC period (June 1, Sept. 1, Dec. 1, March 1), or whether mid-quarterly enrollments are permitted. If mid-quarterly enrollments are permitted, it is not clear if the minimum term is three months from the enrollment date, or, if the three-month minimum term does not start until the start of the next PTC period.

Also of note with respect to the three-month coincident period, is PPL's proposed provision that EGSs shall file before the start of each PTC quarter, "[t]he available TOU rate options for the upcoming quarter."

This implies that the EGS can only offer those TOU rates that are filed in advance during the subsequent PTC quarter. If enrollments were permitted on a rolling basis, and if EGSs were not allowed to update their pricing for new customers, this would mean EGSs would be required to hold open a price for nearly three months. In contrast, to avoid this issue, it may imply that because rates for that quarter must be filed in advance of the quarter, there are no rolling enrollments onto the EGS TOU programs until the start of the next PTC quarter, when new rates take effect.

PPL does state in its petition, "the term of the contract between the EGS and the TOU customer may not be less than three months in length; however, an EGS may revise the TOU rate option that it offers to new customers every quarter and these rate options will be reported to the Company in a quarterly report."

This suggests that price changes for new customers may only occur at the start of each quarter.

PPL also states, "participating EGSs are not required to change their price every quarter; it is up to an EGS to determine if it wants to make quarterly revisions to the TOU rate options offered to customers." Again, only quarterly price changes are mentioned; no explicit mention is made of price changes, for new customers, in the middle of a PTC quarter.

EGSs are permitted to define the on-peak and off-peak periods.

Participating EGSs must accept all eligible Residential and/or Small C&I customers who elect to participate in the TOU Program.

PPL proposed to require that a participating EGS shall create and maintain a webpage, which will be cross-referenced by PPL Electric on its TOU webpage, that provides details about the EGS's available TOU rate options for the current quarter, including rate options and rates currently available.

Additionally, to participate in the TOU program, EGSs must return "bill ready" data for PPL Electric to include on customers' bills.

Should an EGS decide to terminate its participation in the TOU program, it must continue to serve any existing TOU customers under the terms of the service agreement between the customer and the EGS for TOU service.

To inform customers about the new TOU program, PPL Electric will include an article in "PPL Connect" announcing the implementation of the TOU Program. In the "PPL Connect" announcement, the Company will briefly summarize the program and inform customers that more information can be found on a dedicated PPL Electric or participating EGS webpage, or customers can call PPL Electric or a participating EGS to receive more information.

PPL will not promote any specific TOU rate option offered by an EGS that is participating in the program. "It is a participating EGS's responsibility to publicize and market their participation in the Pilot TOU Program and the TOU rate options provided thereunder," PPL said.

Additionally, customers who call PPL Electric and indicate interest in a TOU rate will be directed to a PPL Electric-hosted website that will provide links to each participating EGS's TOU rate offerings. The TOU webpage is anticipated to operate in the same manner as the current "choose your supplier page" maintained by PPL Electric. Similar to the "choose your supplier page," the TOU webpage would provide links to the participating EGS's TOU webpage. Also similar to the current procedures related to retail shopping, PPL Electric will not provide any EGS specific TOU rate information directly on its website.

Customer Assistance Program (CAP) customers will be permitted to select an EGS TOU offer under the PPL program, but PPL will require the EGS to provide notice to CAP customers that a TOU rate option may not be the lowest rate alternative for the CAP customer.

Currently, PPL, itself, serves default supply customers electing a TOU generation rate option. PPL will cease serving these customers upon implementation of the new EGS-offered programs. Customers currently on the PPL-served TOU program will be returned to standard default service if they do not elect an EGS; PPL will notify customers of the EGS TOU options via a letter before termination of the PPL-served TOU program.

Customers participating in the EGS TOU Program will initially begin service according to his or her bill cycle and the 11-day enrollment rule. Notably, "[n]ew and moving customers can be served by an EGS starting with his or her initial meter read as a 'Day 1 Enrollment' if enrollment is received by the Company eleven days or more in advance of the customer's connect date. In the event that there is a gap in service prior to the initiation of service under the Pilot TOU Program, a customer may receive default service from PPL Electric prior to being switched to a supplier given switching rules."

P-2012-2302074