Retail Supplier Opposes "Anti-Competitive" Cost Recovery Proposal Filed by PECO

Recovering the costs of a tool allowing retail electric suppliers, with customer authorization, to look-up an account number remotely, in order to facilitate shopping decisions outside of the home, should not be done through an "anti-competitive" discount to the purchase of receivables discount rate, Dominion Retail said in comments to the Pennsylvania PUC.

The PUC, in directing development of the remote account number access tool, envisioned the use of a user fee on participating retail suppliers to fund the program. However, PECO, expressing concern about what it sees as a lack of supplier interest in the tool, told the PUC that a user fee would expose PECO to the potential for unrecovered costs. PECO therefore proposed to recover costs through both bypassable supply rates and the POR discount (one-half recovered through each mechanism).

Dominion Retail, "strongly disagrees with [the] notion that ALL EGSs should be forced to compensate PECO for these costs through the PORs discount," since some suppliers' marketing strategy may not require use of the account look-up tool.

"The POR discount is a blunt instrument for recovering the costs of targeted enhancements that may only benefit a small segment of EGSs. In other words, as the market matures, EGSs cannot be viewed as being a homogeneous group. Each has its own marketing strategy as the Commission's Order recognizes. It is anti-competitive to assess a marketer for the costs of a program in which it does not participate -- it increases the non-using marketer's costs unreasonably and conversely lowers [the] costs for those who use the service, thus creating a subsidy," Dominion Retail said.

"The added harm of using the POR discount for this program is that the costs disproportionately fall on EGSs with the existing customer bases, thus providing an even larger subsidy to those EGSs that could adopt this marketing tool. PECO's proposed recovery method does not seek to allocate the costs to cost causers," Dominion Retail said.

Dominion Retail questioned PECO's "vague" assertion of tepid supplier interest in the account number look-up tool.

"Such a conclusion not only fails to provide any information about how many EGSs have expressed an interest in the system, it ... appears to be largely speculation and thus cannot support an out-of-hand rejection of the Commission's preferred recovery mechanism," Dominion Retail said.

Dominion Retail, "believes that a user fee mechanism could be developed that would provide adequate assurance of cost recovery to PECO and at the same time would not cause some suppliers to subsidize others and that therefore PECO's unsubstantiated rejection of the Commission's preference for such an approach should be rejected and PECO ordered back to the drawing board."

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