Pennsylvania ALJ Recommends Approval Of Settlement Under Which Utility Would Remove Uncollectibles From POR Discount, Transfer To Delivery Surcharge

A Pennsylvania ALJ has recommended that a non-unanimous settlement concerning Duquesne Light's default service program for the period beginning June 1, 2017 be adopted without modification

Under the non-unanimous settlement recommended for adoption, the utility would remove the uncollectibles component of the purchase of receivables (POR) discount, and instead collect such amounts through a nonbypassable delivery service surcharge on all customers.

Specifically, under the settlement, Duquesne Light would, effective June 1, 2017, eliminate the uncollectible accounts component of the POR discounts for retail suppliers.

The administrative cost component of the POR discount (0.1%) would continue

Noble Americas Energy Solutions LLC opposed the settlement's change in POR uncollectibles treatment, calling the change anti-competitive as it makes EGS customers not participating in POR subsidize the uncollectibles of EGSs participating in the program.

The ALJ recommends denying Noble Americas' objection as procedurally deficient and lacking support

Otherwise, the settlement was not contested.

As previously reported, the settlement would adopt Duquesne Light's proposed procurements for each customer class without modification

Currently, for residential (and lighting) and small C&I customers (under 25 kW), Duquesne Light exclusively relies on 12-month fixed price full requirements contracts to serve default service load. The contracts are laddered such that 50% of default service load is procured at one time, with 50% of the supply replaced every six months

Under the settlement, Duquesne Light would transition residential (and lighting) and small C&I customers to a laddered portfolio consisting of 12-month fixed price full requirements contracts (50%), and 24-month fixed price full requirements contracts (50%)

Duquesne Light had originally said that the addition of 24-month contracts would provide, "greater price stability."

Residential and small C&I contracts would be procured within three months before the commencement of their delivery periods

For specifics on the laddering and delivery start dates, click here for a chart of the default service products

Residential (and lighting) and small C&I Prices to Compare would be adjusted fixed for six months, with semi-annual reconciliations

For medium C&I customers (initially 25 kW to 300 kW with a future lowering of the high-cutoff to 200 kW), Duquesne Light would continue to serve such customers on non-laddered three-month full requirements supply contracts

Large C&I customers would be served on hourly priced default service.

Duquesne Light would lower the hourly pricing threshold to 200 kW from 300 kW effective June 1, 2019

Duquesne Light would implement changes in the administration of the hourly priced default service program such that it bids out the right to serve hourly priced default service customers to competitive suppliers, under 12-month terms. Hourly priced customers would be charged day-ahead hourly price, plus pass-throughs of capacity and ancillaries and various adders.