Pa. PUC Chair "Encourages" Utilities To File Empirical Data If Deviating From "Prudent Mix" Standard

Pennsylvania PUC Chair Gladys Brown yesterday "encourage[d]" the state's electric distribution companies to provide empirical data for any future default service plan which deviates from the statutory "prudent mix" standard.

Brown's statement was made in dissenting from an order adopting a new default service plan at Pike County Light & Power, which continues Pike's reliance on spot purchases (see related story today)

Brown noted that statute requires default service plans to include a "prudent mix" of: (1) spot market purchases, (2) short-term contracts (less than four years in length), and (3) long-term purchase contracts (generally between four and twenty years in length).

While the Commonwealth Court has previously upheld a PUC decision finding that Pike's spot-only purchases complies with the prudent mix standard, Brown noted that such prior PUC decision was backed by the PUC's consideration of an analysis on the cost of hedges filed by Pike, which justified the PUC's finding that use of such hedges would not be prudent.

Brown said that such an analysis was lacking from the record for Pike's new default service plan

Brown stated, "I would encourage Pike, and all other EDCs to the extent applicable, to include empirical data in future filings to support any proposed deviation from the prudent mix standard of Act 129."

Notably, with regard to meeting the prudent mix standard, most of the EDCs have not included new long-term contracts in their most recent default service plans, instead relying on legacy long-term contracts entered into under earlier default service plans