PUC Initiates Phase II of Competitive Retail Electricity Market Investigation

On July 28th, 2011, the Pennsylvania Public Utility Commission entered an Order intended to provide guidance to the PUC Staff and interested stakeholders regarding issues to be addressed in Phase II of the PUC’s Investigation into the competitiveness of Pennsylvania’s retail electric market.  The Phase II process will involve a series of technical conferences to be chaired by the PUC’s Office of Competitive Market Oversight (OCMO) as well as additional en banc hearings.

According to the PUC, “there is a substantial countervailing opinion [in the Phase I comments and testimony] that the current paradigm contains both structural and operational impediments to a fully functioning, robust competitive retail marketplace” such as that intended by the passage of the Electricity Generation Customer Choice and Competition Act.  Specifically, the PUC determined that Phase I of the Investigation revealed the PUC “must examine changes to Pennsylvania’s retail electric market in order to improve the competitive landscape.”

The technical conferences will proceed on two separate but simultaneous tracks:  one track to examine changes needed in the “existing market model” (intermediate steps), i.e., steps that can be implemented “relatively quickly” and without any legislative changes, and a second track to examine “structural changes to the default service model” (long range steps) to remove market impediments.  OCMO’s report, which is to contain a work plan with specific proposals for implementation of recommended corrective measures, is to be presented to the PUC in December of 2011.  A similar report for long range changes is to be presented in the first quarter of 2012.

While OCMO and the stakeholders are free to examine any issue they feel is necessary to achieve a fully competitive retail electric market, the PUC’s Order identified specific issues it wants included in the technical conference discussions.  Some of these issues are:

• Prohibition of marketing of default service.

• Information access, including smart meter data.

• Annual auction of customers on an opt-in basis.

• Accelerated switching time frames.

• Uniform EDC/EGS coordination protocols.

• Cost allocation and pricing.

• Should default service remain with the EDCs?

• A revised and enhanced customer education program.

• Impact of changes on universal service programs and Act 129 Plans and requirements.

The PUC’s stated goal for the changes recommended in Phase II of this Investigation is to improve “Pennsylvania’s retail electric market by providing for a more informed and involved consumer population, additional products and services as well as increased participation and investment in Pennsylvania’s retail electricity market by EGSs.”

Download and view the PUC’s July 28th, 2011 Order below in your preferred format:

PUC July 28th, 2011 Order - Microsoft Word DOCX

PUC July 28th, 2011 Order - Adobe Acrobat PDF

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