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PUC en banc Hearing: A Resounding Success

The PA PUC’s recent public hearing to explore the future of the competitive electricity markets in Pennsylvania was no less than a resounding success according to Chairman Robert Powelson of the Commission.

On June 9, 2011, four panels of witnesses provided testimony before all five Commissioners sitting en banc.  The witnesses included Former Secretary of the Department of Environmental Protection, John Hanger; Chairman of the Texas Public Utilities Commission, Barry Smitherman; the Chief Executive Officers of all Pennsylvania’s electric distribution companies; and a number of representatives of electric generation suppliers operating in the Commonwealth.  As expected, the witnesses representing “consumer” interests testified that the existing market structure and performance are well within acceptable limits.  As part of his concluding remarks, however, Chairman Powelson responded to those contentions, stating that “the status quo is not an option.”  Also notable was that  the CEOs of each of Pennsylvania’s electric distribution companies agreed (some more than others) with Chairman Powelson’s suggestion that the best use of the talents of the EDCs is to be “infrastructure companies,” rather than default suppliers, assuming the opportunity for an orderly transition out of the default service business.

There were a number of other constructive proposals for near term changes that could be made to the electricity markets to make robust competition more likely, short of requiring the electric utilities to exit the merchant function, though most would require legislative change.  John Hanger, himself a former PUC commissioner, had a number of excellent suggestions, including requiring new customers to affirmatively choose a supplier out of a list of suppliers that may include default service as an option.  This same requirement would apply to customers who move within a service territory or who are disconnected for whatever reason.

Comments have been filed by well over twenty (20) parties not including those that testified, which shows a tremendous amount of interest in the development of competition in Pennsylvania’s electricity markets on a going forward basis.  The Commission expects to hold at least one more en banc hearing, possibly two, to thoroughly vet all of the ideas before reaching any final decisions.

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