Pennsylvania PUC: "Low-income Customers ... Benefit Most From Having The Ability To Switch Suppliers"

In a written order denying a petition from NRG Energy to implement electricity supplier consolidated billing in Pennsylvania, the PUC made several observations regarding the purpose of the state's Competition Act and electric choice in general, which are of note given other proceedings before the PUC concerning whether customer choice is appropriate

While the PUC's observations may have been prompted by NRG's SCB petition, the PUC's reasoning, as shown in its observations below, is broader, and addresses issues such as the very purpose of the state's Competition Act, and whether choice is beneficial to low-income customers.

Of most note, the PUC said in its SCB order, in discussing a proposed (and rejected) switch block mechanism, that "Taking away a customer’s ability to switch suppliers is inherently anticompetitive and contrary to the Competition Act’s goal of lowering electricity costs by introducing competition to Pennsylvania’s retail electric market."

The PUC further said in its SCB order that the proposed switch block, "would frustrate the purpose of the Competition Act, to lower electricity costs by allowing customers to choose their EGS."

Using similar language, the PUC also said in its SCB order that the block mechanism, "would frustrate the purpose of the Competition Act by preventing customers from choosing their EGS."

In discussing how the block mechanism would "trap" customers with their current supplier until arrearages are paid, the PUC observed that, "These customers -- likely low-income customers who benefit most from having the ability to switch suppliers -- would not be able take advantage of lower cost offers."

We find the PUC's observations instructive as the PUC considers the treatment of certain low-income customers -- namely Customer Assistance Program (CAP) customers -- in the retail market.

At some EDCs, CAP customers have never had the ability to shop for an electric supplier, and while the PUC previously directed that such EDCs extend choice to such customers, such directives have been put on hold pending litigation of CAP issues at other EDCs.

At other EDCs, such as PPL Electric, where CAP customers did have the ability to choose an EGS, the PUC, while still allowing a form of alternative supply to continue, restricted the manner in which a customer could shop -- only allowing CAP choice at PPL Electric through a PUC-designed standard offer program.

In its SCB order, the PUC noted that NRG had proposed that CAP customers be prevented from purchasing generation supply under an SCB (with CAP customers permitted to select EGSs that would bill CAP customers under the current billing methods).

The PUC noted, "While the Commission has approved a plan by PPL to limit the ability of customers in its CAP to shop only with suppliers participating in its CAP standard offer program, the Commission’s authority to set such a limit is currently before the Commonwealth Court. Accordingly, the Commission is reluctant to set further limits without a more developed record and until after the Commonwealth Court rules in RESA v. Pa. PUC, 230 C.D. 2017."