Pennsylvania Moves Up Review of Natural Gas Customer Referral Programs, in Final Order Setting Retail Market Investigation Priorities

The Pennsylvania PUC has issued a final order establishing the scope of its review of improvement to the retail natural gas market, and has accelerated its consideration of standard offer customer referral programs for natural gas.

In an earlier tentative order, the PUC had proposed moving consideration of customer referral programs to a "later phase" of the investigation.

Upon review of stakeholder comments, the PUC has reconsidered this position, and instead directed that the Office of Competitive Market Oversight (OCMO) explore the potential for the establishment of standard offer customer referral programs in the retail natural gas market earlier in the investigation, and to provide a report to the Commission no later than the second quarter of 2015

The PUC's final order affirms the Commission's position that the retail market investigation shall not consider removal of the utility from the supplier of last resort role at this time. The PUC will also not consider rate unbundling at this time.

Additionally, the Commission said that it plans to "delay" the discussion of purchase of receivables until no later than the third quarter of 2015.

The PUC does plan to review current POR programs to determine which "best practices" should be more widely adopted and, likewise, which practices should possibly be avoided. This examination can include expanding POR as, "with the understanding that this could be somewhat more controversial and may ultimately have to be addressed via more formal mechanisms," the PUC said.

As noted in our related story today (click here), the PUC directed an immediate review of natural gas disclosure rules.

Another item to be immediately addressed by the PUC is the development of tools to allow retail suppliers and customers to look up a customer's account number remotely to facilitate shopping in environments in which the customer does not have their bill, similar to mechanisms recently implemented for electricity. OCMO was directed to prepare, in the first quarter of 2015, recommendations for the Commission's consideration on account number look-up mechanisms.

Among other near-term issues for the investigation is accelerated switching, as the PUC directed OCMO to provide recommendations on accelerated switching no later than the second quarter of 2015.

Also by the second quarter of 2015, OCMO was directed to develop recommendations regarding a joint utility-natural gas supplier bill.

OCMO is also to examine no later than the second quarter of 2015 seamless moves and instant connect (switch-at-connect) functionality.

OCMO was directed to review current practices for determining utility migration rider amounts (reconciliations), the timing of adjustments to the riders and the application of the riders by the utility to determine if there are potential changes that may reduce the impacts of the riders on all customers and identify avenues to accomplish such changes. OCMO should submit, no later than the third quarter of 2015, recommendations for the Commission's consideration on migration rider issues.

OCMO shall report by the fourth quarter of 2015 recommendations on a host of interrelated issues involving capacity assignment and management of storage assets, with a working group informing OCMO's review.

At a minimum, the working group was directed to explore ending mandatory acceptance of utility-owned capacity; fair or equitable division of capacity between utilities and competitive suppliers; and revenue sharing between default and shopping customers when capacity is released by the utility.

As part of the capacity assignment review, the working group will also be tasked with investigating system balance, tolerances, penalties, creditworthiness requirements, and the possibility of standardizing supplier tariffs. These discussions will also include any applicable recommendations regarding scheduling and nomination provisions, pooling fees and related provisions, as well as imbalance trading provisions and cash-out provisions.

OCMO is to initiate an inquiry into the allocation of existing access points, as well as procedures to be used to provide access to future access points, with recommendations due by the fourth quarter of 2015.

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