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Pennsylvania Competitive Market Update

Pennsylvania Competitive Market Update. National Energy Marketers Conference – April 11, 2019 Dan Mumford Director – Office of Competitive Market Oversight – PA PUC. The Usual Disclaimer:.

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Pennsylvania Competitive Market Update

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  1. Pennsylvania Competitive Market Update National Energy Marketers Conference – April 11, 2019 Dan Mumford Director – Office of Competitive Market Oversight – PA PUC

  2. The Usual Disclaimer: Opinions expressed by the presenter are personal, informal opinions and are not binding upon the Pennsylvania Public Utility Commission or the Commonwealth of Pennsylvania.

  3. TOPICS: Customer Assistance Programs and Shopping Marketing and Disclosure Default Service Policy Proceeding Natural Gas Shopping & Switching Nuclear Support Legislation in PA

  4. Electric Customers With a Supplier:https://www.papowerswitch.com/sites/default/files/PAPowerSwitch-Stats.pdf

  5. Electric Customer Assistance Program (CAP) Shopping How should CAP customers participate in the competitive market? Balancing the right of CAP customers to shop – while managing the the affordability of the CAP programs.

  6. http://www.puc.pa.gov/filing_resources/universal_service_reports.aspxhttp://www.puc.pa.gov/filing_resources/universal_service_reports.aspx

  7. CAP Customers in PA • Eligibility : 150 % of the federal poverty level. • Pay a discounted/subsidized rate. • The cost of these programs (including the CAP credits, administrative costs, etc.) are fully recoverable by the utility via residential rates. • Customer receives a set amount of “CAP credits” – the difference between the standard tariff rate and the CAP discount rate.

  8. CAP Customers in PA • The more expensive a competitive product is – the faster the pace that CAP credits will be exhausted. • Finding a balance between the customer’s right to shop; the need to control CAP program costs; and the opportunities for cost-savings that shopping can provide.

  9. CAP Shopping : Statewide Currently: • PPL: CAP customers have to shop by participating in a special customer referral program. No fees – but no guarantee that price is always below PPL PTC. • PECO: CAP customers cannot shop. • Duquesne Light: CAP customers cannot shop. (Natural Gas: CAP customers cannot shop – the PUC is NOT reviewing this matter at this time)

  10. CAP Shopping : FirstEnergy Utilities • Effective date: June 1, 2019 • The deal the customer enters into with a supplier must: • Be at a price that is always the same or lower than the utility Price-To-Compare (PTC). • Include no cancellation fees or any other add-on fees. • FirstEnergy is to monitor and enforce the price rule monitoring EDI data flows (will reject any supplier enrollments for prices that exceed the PTC).

  11. CAP Shopping : Proposed Statewide Policy • February 2019: Order proposing a new policy statement addressing the issue of CAP participant shopping with suppliers that sets guidelines that limit harm to CAP participants while still providing CAP participants the benefits of the retail electric market. • Intended to establish more uniform, statewide policies and procedures for CAP shopping. • Electric utilities would then propose new CAP shopping programs in their next Default Service Plans (DSPs). Current DSPs expire 2022 – 23.

  12. CAP Shopping : Proposed Statewide Policy In designing future CAP shopping programs, electric utilities should include the following provisions: • A requirement that the CAP shopping product has a rate that is always at or below the utility default service PTC over the duration of the contract between the supplier and the CAP participant. • A provision that the contract between the supplier and the CAP participant contains no early termination or cancellation fees. • A provision that, at the end of the contract, the CAP participant may re-enroll with the supplier at a product that meets the same requirements as outlined in numbers 1 and 2 above, switch to another supplier offering a product that meets those requirements or be returned to default service. Additionally, the Commission asks whether any party believes that it can show that there is a reasonable alternative to the program described above, where harm will not be incurred by either CAP or non-CAP customers, they are free to propose such a model.

  13. CAP Shopping : Statewide Policy • INITIAL COMMENTS: Interested parties have 45 days from the publication of the Order in the Pennsylvania Bulletin to provide written comments. • REPLY COMMENTS: Written replies to filed comments must be submitted with 60 days of the date of publication.  • M-2018-3006578

  14. CAP: Comprehensive Review • M-2017-2596907 • “…priorities, concerns, and suggestions for amending and improving any or all aspects of the Universal Service and Energy Conservation Programs. Such comments may include, but are not limited to, issues of program design, implementation, costs, cost recovery, administration, reporting, and evaluation.” • Affordability Report issued January 2019

  15. Default Service Investigation Default Service : For customers that do not shop, the utility provides default service. The utility obtains default service supply from wholesale suppliers and passes the cost to the customer dollar-for-dollar per the terms of the utility’s default service plan (DSP).

  16. Default Service Investigation: • January 17, 2019: the Commission adopted a Motion of Commissioner Place re Investigations into Default Service and PJM Interconnection, LLC, Settlement Reforms. • On February 26, the Order based upon this motion was served. Docket M-2019-3007101 “The Commonwealth of Pennsylvania has invested a significant amount of customer funded utility resources in smart meter technology. The Commission seeks input on how this technology can be utilized to design default service rates in a way that better aligns associated wholesale cost allocation with retail cost allocation.”

  17. Default Service Investigation: Current default service is “vanilla”… but should this evolve? Example: • Should default service rates evolve to include time‑of‑use (TOU) structures, such as on and off‑ peak rates, super off‑peak rates, critical peak pricing (CPP) periods, or peak time rebate structures? If so, what specific TOU structures do interested parties believe are most optimal, and why? • Initial comments are due in 90 days; reply comments in 120 days. (Petition pending to extend these periods). • Possible stakeholder meetings?

  18. Other Pending Electric Issues: • PECO PREPAYMENT PILOT PROGRAM PETITION: Coming soon:ALJ - Commission Decision. Leveraging advanced metering to offer pre-pay service to residential consumers. P-2016-2573023 • SUPPLIER CONSOLIDATED BILLING: Commission exploration, including two en-banc hearings, and written comments in 2018. (Current billing options in PA are UTILITY CONSOLIDATED BILLING and DUAL BILLING). M-2018-2645254 • Keeping our shopping website up-to-date to reflect evolving marketplace and new products (TOU, flat pricing, etc.): www.papowerswitch.com

  19. Marketing - Disclosure

  20. Current Marketing Concerns: • TELEMARKETING: robocalls, phone number spoofing, Do-Not-Call lists, failure to identify themselves, misrepresentation. • DOOR-TO-DOOR: background checks, local ordinances and permitting requirements, possible misrepresentation & confusion with local utility.

  21. Marketing: April 3 Secretarial Letter to all suppliers.L-2010-2208332 We urge all Suppliers to immediately perform a comprehensive review of their current and planned residential sales and marketing efforts to ensure that the standards discussed in this Secretarial Letter are complied with. A competitive energy market where suppliers provide accurate and complete information to potential customers will not only assist those customers in making informed energy choices, but will benefit the market in its entirety by improving the shopping experience for everyone.

  22. Marketing: Recent Enforcement Actions: • C-2016-2581006: November 2018: $ 5,000 penalty. Formal consumer complaint of repeated telemarketing calls, failure of supplier to identify themselves. Final. • M-2018-2529738: December 2018: $ 6,000 penalty. Unauthorized switching due to inadvertent electronic file confusion. Pending. • M-2018-2624484: March 2019: $ 52,700 penalty. Door-to-door agents without completed background checks. Pending. • M-2018-2617335: March 2019: $ 13,500 penalty. Door-to-door agents on the streets without local permits. Pending.

  23. Revised Residential Disclosure Regulations: • Rulemaking L-2017-2628991. Proposal December 2017 • A ban on early termination fees after the supplier has provided the customer with a contract expiration notice. • Requirements that suppliers display their prices in a format that allows for easier price-comparisons. • Requirements that any introductory pricing be clearly identified and explained to the customer, and disclose both the introductory price and the price after the introductory period expires. • Requirements to provide more information about variable prices. • Simplifying the format of customer contract summaries that customers receive along with their disclosure statement.

  24. Natural Gas Shopping

  25. Natural Gas Customers With a Supplier:https://www.pagasswitch.com/sites/default/files/GasSwitch_ShoppingNumbers103118.pdf

  26. Natural Gas: Switching Process • Rulemaking L-2016-2577413. • Process currently takes weeks – months. • Proposed 3-day switching (as we have with electric). • Comments received, also a 2018 technical conference. • Switching off-cycle vs. on-cycle? Maintain regular billing cycle or have off-cycle billing as well? Restrict number of switches per billing cycle?

  27. Nuclear Discussion Comes to Pennsylvania

  28. Pennsylvania Energy • Third in the nation in coal production. • Second in the nation in natural gas production. • Largest net exporter of electricity in the nation. • Second in the nation in nuclear electricity generation (42 %). • Three Mile Island – 1 reactor • Peach Bottom – 2 reactors • Limerick – 2 reactors • Susquehanna – 2 reactors • Beaver Valley – 2 reactors Source: Energy Information Administration – year 2017.

  29. Nuclear : House Bill 11 • House Bill 11 – Session of 2019 • March 12, 2019 • Legislation Quick Search: HB 11 http://www.house.state.pa.us/ • Referred to House Consumer Affairs Committee.

  30. Nuclear : House Bill 11 The Bill amends the Alternative Energy Portfolio Standards Act (AEPS Act / 2004) to create a Tier III alternative energy credit which includes energy produced from nuclear facilities as well as zero emission solar, wind, hydropower and geothermal sources. Requires all PA electric utilities to purchase Tier III credits equal to 50% of the total electric energy sold. All costs associated with this program are to be collected on a full and current basis through a non-bypassable surcharge.

  31. Nuclear : House Bill 11 The Pa PUC has taken no position on the proposed legislation. The Pa PUC would be tasked with implementing and administering the program. Other bills are possible. HB 11 Public Hearings: 4/8; 4/15; 4/29 and 5/6. Still early in this process – stay tuned.

  32. Thank you for your attention. Dan Mumford, Director Office of Competitive Market Oversight – PA PUC dmumford@pa.gov

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