Settlement In PECO Default Service Case Includes Changes To Standard Offer Customer Referral Program
POR Discount To Be Affected
CAP Shopping Left To Future Proceeding
Billing Improvements For EGSs
Includes New Time of Use Option for Default Service Customers
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Various parties, including PECO, the Office of Consumer Advocate, the Office of Small Business Advocate, CAUSE-PA, several retail suppliers, and industrial customers have filed a settlement in PECO's default service proceeding that would establish parameters for default service for the period June 1, 2021 through May 31, 2025 (DSP V)
The settlement reserves two issues for litigation:
(1) the allocation of the costs PECO incurs to implement new time-of-use ('TOU') default
service rate options and (2) changes to the current assignment of responsibility for PJM
Interconnection, L.L.C. ('PJM') charges for Network Integration Transmission Service
('NITS') from all load-serving entities to PECO (as proposed by the Electric Supplier
The settlement remains subject to PUC approval
The settlement would maintain the current customer classifications (delineations) for the purposes of default service procurement and pricing
Under the settlement, for the Residential Class, PECO would continue to procure a mix of one-year
(approximately 38%) and two-year (approximately 61%) fixed-price full requirements
('FPFR') contracts, with six months spacing between the commencement of contract delivery
periods. During the Revised DSP V period, the remaining approximately 1% of Residential
Class load would be supplied directly by PJM’s spot energy, capacity and ancillary services
For Small Commercial customers (at or under 100 kW), default service load would continue to be supplied by equal shares
of one-year and two-year FPFR products.
For residential and small commercial FPFR products, suppliers would bid in a competitive, sealed-bid request for proposals ('RFP')
process on 'tranches' corresponding to a percentage of the actual customer class default service
customer load. Winning suppliers would be obligated to supply full requirements load-following
service, which includes energy, capacity, ancillary services, and all other services or products
necessary to serve a specified percentage of PECO’s default service load in all hours during
the supply product’s delivery period. The full requirements product requires the supplier to
provide PECO all necessary AECs, less any reduction in obligation due to PECO's long-term AEC contracting noted below, for compliance with
Pennsylvania’s Alternative Energy Portfolio Standards ('AEPS') Act, 73 P.S. § 1648.1 et seq.
Each of the contracts would be procured approximately two months prior to the beginning of the
applicable contract delivery period.
For Large Commercial and Industrial customers (over 100 kW), PECO would
continue to solicit twelve-month hourly-priced full requirements products, without overlap, for
all default service supply.
Under the settlement, PECO would also conduct two solicitations in both 2021 and 2022 for ten-year
Solar AEC contracts to deliver a total of 16,000 Solar AECs annually (i.e., 4,000 Solar AECs
in each of four solicitations). PECO would procure up to half of each year’s Solar AEC amount
from solar generating facilities located within its service area. PECO
would continue to allocate AECs obtained through its separate AEC procurements to wholesale default service suppliers in
accordance with the percentage of load served by each supplier.
PECO's Generation Supply Adjustment (GSA) would continue to change quarterly and over/undercollections
of default service costs would continue to be reconciled on a semi-annual basis. The Price to Compare, reflecting the GSA and transmission charge, would change quarterly.
Under the settlement, PECO would continue to be responsible for and recover the following PJM
charges from all distribution customers in PECO’s service area through its Non-Bypassable
Transmission Charge ('NBT'): Generation Deactivation/RMR charges (PJM bill line 1930)
set after December 4, 2014; RTEP charges (PJM bill line 1108); and Expansion Cost
Recovery charges (PJM bill line 1730). The issue of whether PJM charges for NITS should be
recovered by PECO from all distribution customers through the NBT on a class basis is
reserved for litigation.
Standard Offer Customer Referral Program (SOP)
Under the settlement, PECO would continue the current Standard Offer Customer Referral Program ('SOP'), including the cost
recovery mechanisms last approved by the Commission in PECO’s DSP IV proceeding, until May 31, 2025, with some changes related to enrollment and branding
Under the settlement, PECO would change the brand name for the SOP from 'PECO Smart Energy
Choice' to 'Customer Referral Program'.
Additionally, under the settlement, the SOP enrollment process would require that, prior to obtaining customer approval to participate in the SOP, the customer service representative (CSR) for PECO’s third-party SOP
administrator will ask the customer’s authorization to enroll with a specifically named
supplier. OCA had expressed concern that, currently, CSRs are enrolling customers into the SOP prior to the identification of the
supplier with whom the customer would be contracting.
Prior to filing its next default service program, PECO agrees to conduct a
customer satisfaction survey of customers who withdrew from the SOP before the conclusion
of the twelve month program, those who selected a new EGS at the conclusion of the SOP,
those who returned to default service at the conclusion of the SOP, and those remained with
their SOP supplier at the conclusion of the program.
Under the settlement, PECO agrees to allow customers to enroll in the SOP through its website and
is to waive the SOP referral fee for web-enrollments. The website presentment will contain
the same information and disclaimers about the program as currently provided in PECO’s
All implementation costs to enable SOP web-enrollment would be
recovered over the Revised DSP V period through a Purchase of Receivables discount. PECO
is to present a good-faith estimate of implementation costs to the Joint Petitioners by the end of
March 2021. If the Joint Petitioners approve those costs, PECO would proceed with
implementation by March 2022. SOP suppliers must accept referrals from both PECO’s
website and call center.
The settlement provides that PECO will convene a stakeholder process to discuss mechanisms to collect
electric generation supplier (EGS) pricing information compatible with PECO’s 'bill-ready' billing system and to develop
bill improvements to ensure that shopping information is clear and transparent to residential
customers. This process will also address EGS recommendations to improve the presentation
of shopping information on residential customer bills.
Under the settlement, PECO will not implement its proposed CAP Shopping Plan as described in its original DSP V
PECO's original CAP shopping proposal had included a requirement that retail suppliers must adhere to CAP program pricing limits, or drop the customer, for existing shopping customers who become CAP customers mid-contract. See background here
The settlement notes that PECO, in a separate docket, is currently seeking to transition its CAP program from the existing Fixed Credit Option ('FCO') design to a Percent of Income Payment Plan
The settlement provides that within 90 days of a final order in the separate CAP design proceeding (M-2018-3005795), PECO will make a filing with the Commission in which it will make a proposal
regarding CAP shopping that is consistent with the CAP design approved in such final order
Time of Use Option
The settlement provides that, during DSP V, PECO would introduce new Time of Use (TOU) default service rate options for
eligible customers in PECO’s Residential and Small Commercial procurement classes (the
'TOU Rates') to comply with PECO’s obligation under Act 129 of 2008 ('Act 129') to offer
TOU and real-time rates to all default service customers with smart meters.
PECO would source both the standard and TOU default service for residential and
small commercial customers from the same supply portfolio for each procurement class.
PECO would use the standard default service GSA as the reference price for PECO’s TOU rate
calculations. PECO would calculate the TOU Rates on a quarterly basis
PECO’s TOU generation rates would differentiate prices across three usage periods that are
constant throughout the year, as shown below.
• Super Off-Peak: Midnight (12 a.m.) – 6 a.m. Every day
• Off-Peak: All other hours
The settlement would initially adopt the TOU price multipliers for each procurement class shown below, but such multipliers may be updated in the future. The multiplier is the ratio to the Super Off-Peak TOU price
TOU Pricing Multipliers
Super Off-Peak 1
GSA-2 Small Commercial
TOU Pricing Multipliers
Super Off-Peak 1
PECO’s TOU Rates would be available to residential and small commercial
default service customers with smart meters configured to measure energy consumption in
watt-hours. However, customers enrolled in the Company’s Customer Assistance Program
('CAP') would not be eligible for the residential TOU Rate during the DSP V term to
avoid potential adverse impacts on CAP benefits.
PECO would recover the costs to implement the new TOU rates from customers
in the eligible procurement classes (i.e., the Residential and Small Commercial Classes)
through the administrative cost factor of the GSA. The issue of how the costs PECO incurs to
implement its new TOU Rates should be allocated to the Residential and Small Commercial
procurement classes is reserved for litigation.