With Supreme Court Denying Review, Pa. PUC Moves To Implement Lower Court's Order Requiring Prohibition on Termination Fees for Shopping Customers in CAP Programs

With the Pennsylvania Supreme Court recently denying a Pennsylvania PUC petition for allocatur on the issue, the PUC issued a secretarial letter to implement a prior Commonwealth Court ruling which directed the PUC to adopt a prohibition on early termination fees for Customer Assistance Program (CAP) customers to take competitive electric supply

Specifically, the Commonwealth Court's order addressed a PUC order which had ordered that PECO shall allow CAP customers, who were previously ineligible for choice, to shop for electricity. Consumer advocates appealed the PUC's order on two major issues: (1) the lack of any price ceiling, such as the Price to Compare, for retail suppliers' prices for CAP customers, and (2) the lack of a prohibition on early termination fees for CAP shopping customers.

The Commonwealth Court found that while the PUC had statutory authority to impose a price ceiling on competitive suppliers' rates charged to CAP customers (comparing the ceiling to the rate imposed under the Standard Offer programs), the Court found that the PUC's rejection of a price ceiling for CAP offers from retail suppliers was based on substantial evidence in the record that such action would inhibit choice for CAP customers.

However, the Commonwealth Court found that the PUC did not justify based on substantial record evidence its decision to reject a prohibition on early termination fees for CAP customers.

The Commonwealth Court remanded the issue back to the PUC, with "instructions that the PUC approve a rule revision to the PECO CAP Shopping Plan that would prohibit CAP participants from entering into a contract with an EGS that includes early cancellation/termination fees."

With the Supreme Court declining to review this Commonwealth Court order, the PUC moved to address the directive on remand.

"In light of the Court’s Order, and the denial of allocatur by the Supreme Court, through this Secretarial Letter, the Commission hereby directs PECO to file with the Secretary and serve on the parties at its current Default Service Plan (DSP) and Universal Service and Energy Conservation Plan (USECP) dockets a proposed rule revision to its CAP Shopping Plan in its current DSP III consistent with the Commonwealth Court’s Order. PECO’s filing should include: (1) proposed language of the rule; (2) a proposed timeline and effective date; and (3) a proposed plan to collect data upon which to base an analysis of the CAP shopping program experiences, evaluations, and recommendations. PECO’s filing will be subject to public comment and final review and approval by the Commission," the PUC said

P-2012-2283641