SHOCK: Settlement Would Institute Nonbypassable 1¢ Rider for Generation Costs at Pennsylvania Utility

A settlement among Citizens' Electric Company of Lewisburg, PA, Wellsboro Electric Company, the Office of Consumer Advocate and the Office of Small Business Advocate would institute a nonbypassable rider, up to 1¢/kWh, to recover generation costs from the polar vortex.

Specifically, the settlement would implement an Interim Energy Cost Recovery Rider to recover certain generation-related costs, including spot, congestion, and ancillary charges, charged by PJM to the utilities in January. The utilities do not rely on load following contracts for default service, and rely on a portfolio approach with block and spot purchases.

Based on the sought June 1, 2014 effective date, the nonbypassable rider would be 1.186¢/kWh at Citizens' and 0.8750¢/kWh at Wellsboro.

The nonbypassable Interim Energy Cost Recovery Rider would be in place for six months, from June 1, 2014 to November 30, 2014. Any remaining undercollection at November 30, 2014 would be reflected in the companies' bypassable Generation Supply Service Rate (GSSR) E-Factors for the 2nd Quarter 2015.

"Approval of the Joint Petition will further support competitive markets by reflecting actual market conditions in the Company's default service rates and enabling customer[s] to make well-informed choices," the utilities said, in an ironic statement given that the problem of the undercollection arose because default service rates were under-market during January.

Citizens' net remaining projected undercollection of PJM spot, congestion, and ancillary service costs for January 2014 is approximately $817,000. Wellsboro's net remaining projected undercollection of PJM spot, congestion, and ancillary service costs for January 2014 is approximately $455,000.