Electricity Default Service Plans – The Next Generation

Two electric distribution companies, First Energy and PECO Energy Company, have filed their default service plans for service that will begin in 2013 – before the PUC has issued final guidance on what those plans should include.

In an apparent effort to be the first ones through the gate, both companies have filed their plans, and are litigating those plans, before the Commission has issued final guidance as to what it expects to be contained in those plans.  The Commission Order addressing the specifics of the next generation default service plans is expected to be issued in the first week of March.

The Commission issued a Tentative Order at Docket No. I-2011-2237952, proposing requirements for default service plans for the June 1, 2013 through May 31, 2015 time period.  Shortly thereafter, the First Energy Companies submitted a Joint Petition seeking approval of their own view of what default service should look like in the future.  The First Energy plan, which does not exactly track the Commission Order, does include competitive enhancements such as a retail opt-in auction and customer referral program.  Perhaps the most novel proposal is First Energy’s market adjustment charge which would be a half cent adder to the price to compare that will compensate the companies for the risk of providing default service.  The First Energy matter is being litigated before a Commission ALJ and should be resolved in the fall of 2012.

Following close behind the First Energy Companies, PECO filed its default service plan for the June 2013 through May 2015 in early January.  It too has proposed retail opt-in auctions and customer referral programs.  A prehearing conference in that case will be held in early March.

As the litigation of these two cases proceeds, the parties will have to wait and see what the Commission’s expected Final Order in the Retail Markets Investigation process yields with regard to guidance on the default service plans for that same time period.  Based upon ALJ Elizabeth Barnes’ recent ruling in the First Energy case, we may see testimony adjustments in those ongoing cases as a result.

The Commission has been investigating ways to improve the competitiveness of the retail electricity market in Pennsylvania for nearly a year and the Final Order on the next default service plans, which is expected to be issued shortly, will likely not be the final word.

Stay Tuned….