Another: Second Pennsylvania Utility Seeks Nonbypassable Charge for Undercollection in Supply Costs from Extreme Pricing

Wellsboro Electric Company has become the second Pennsylvania utility to petition for a nonbypassable rider to recover an undercollection of supply costs due to, "abnormal and sustained cold weather conditions," during January.

The relief sought by Wellsboro is identical, in terms of mechanics, to the nonbypassable rider sought by Citizens' Electric Company. Both utilities procure default service in the same manner, using a portfolio of block hedges and spot purchases.

Click here for prior story on Citizens' request for nonbypassable surcharge

Wellsboro's bypassable generation rates for the quarter beginning January 1, 2014 were set in December 2013, and have resulted in an undercollection of certain PJM generation costs for January 2014 of approximately $455,000.

Due to an annual reconciliation used for certain default service costs (as opposed to a quarterly reconciliation), this $455,000 would not be included in default service rates until July 2014.

Wellsboro Electric Company sought to impose a nonbypassable Interim Energy Cost Recovery Rider to recover the default service undercollection.

"Wellsboro believes that the proposed surcharge to address the January undercollections will support competitive markets by reflecting actual market conditions in the Company's default service rates and enabling customer to make well-informed choices," Wellsboro said.

"Additionally, the proposed surcharge will facilitate a just and reasonable reconciliation by recovering the undercollections from all of Wellsboro's customers. All customers within Wellsboro's service territory were taking default service in January 2014, and are therefore responsible for the Company's actual incurred default service expenses under the Public Utility Code. Accordingly, the Interim Energy Cost Recovery Rider is appropriately assessed as a non-bypassable charge to ensure that all customers share in the undercollection recovery," Wellsboro said, essentially seeking a one-time "migration" rider on customers.

Unlike at Citizens', Wellsboro did not state that market entry by a retail electric supplier was imminent. No customers are currently taking competitive supply at Wellsboro

The nonbypassable Interim Energy Cost Recovery Rider would recover the undercollection from April 1, 2014 to September 30, 2014.

The Interim Energy Cost Recovery Rider is listed as 0.813 cents per kWh.