Last year, the Commission opened a default service investigation to gain input on how the investments in smart meter technology in the Commonwealth might be utilized to modify default service rates and cost allocation methods, for example, through the inclusion of various time-of-use rate structures. The Commission also sought comment on whether utility default service plans should incorporate long-term contracts for renewable energy. In response, NEM filed comments opposing the expansion of utility default service rate structures into a menu of TOU rate offerings that would intrude into the domain of competitive market offerings. NEM expressed concern that the potential impact of the proposals at issue could undermine two decades of significant achievement in Pennsylvania toward developing a robust competitive retail marketplace. NEM explained that we are on the verge of fully realizing the promise of a competitive marketplace as enabled by technological advancements. Smart meter investments, and the data derived therefrom, will enable a plethora of innovative energy product and service offerings. The competitive market should be relied upon to fulfill this function. Utility-provided default service should retain its character as a “plain vanilla” or “standard offer.” NEM also opposed the incorporation of long-term contracts for renewable energy into the utility default service procurement process. There was broad general agreement from commenters (albeit for different reasons), representing all sides of the industry, with these recommendations.

A Secretarial Letter has now been issued closing the default service investigation and offering guidance to the electric utilities for the next round of Default Service Plan (DSP) filings. Regarding utility procurement and long-term contracts, the Commission decided the topic needed further consideration in upcoming DSP proceedings. With respect to TOU rates, especially in the EV context, this should also be further explored in DSP proceedings.

The utilities next DSP filings are requested to include the following:

"1. We request that the large EDCs, in their next DSP filings, provide information and analysis on their NSPL/PLC cost allocation calculations and why they use such cost allocation for consideration by the Commission. This analysis should also include a discussion on why any large EDC may still be using monthly summary usage data instead of actual customer usage data to determine PLCs/NSPLs, and what steps and timelines, would be needed to implement a change to their current practice, as well as any associated costs.

2. We urge all parties participating in the upcoming DSP proceedings to consider how EV specific TOU rate offerings could be made available to consumers.

3. We request that the EDCs include in their filings evidence showing how their DSP proposals comply with the prudent mix requirements of the Public Utility Code and case law.

4. We request that the large EDCs include in their upcoming DSP filings a 10 year history of their PTC changes and assess the benefits of a 6 month PTC change compared to a 3-month PTC change. EDCs are also free to propose other PTC change intervals that change no more frequently than on a quarterly basis.

5. We suggest that all the EDCs with [Customer Assistance Program] CAP programs, as well as interested stakeholders, consider the issues and concerns raised by the Commission in the above-noted prior proceedings when developing their CAP shopping proposals in the upcoming DSP filings.

6. We ask that EDCs review the Commission’s actions in the above-noted FirstEnergy proceeding concerning [Standard Offer Program] SOP scripting and include in their filings analyses of their SOPs, the current scripting, and any proposed scripting that adequately informs customers about the SOPs while maintaining important safeguards and protections."

The full text of the Secretarial Letter is available on the NEM Website.

S.0998/H.4940 has been introduced in the legislature to establish an Electricity Market Reform Measures Study Committee. The Committee would be charged with studying whether the legislature should adopt electric market reform measures and the public benefits of such measures. Specifically, the Committee would:

"(1) study whether to adopt a variety of electricity market reform measures, encompassing the full range of possible market reforms that may benefit South Carolina consumers, including, but not limited to, the following:

(a) establishing a South Carolina RTO to include South Carolina and other Southeastern states;
(b) joining an existing RTO;
(c) establishing an energy imbalance market;
(d) requiring vertically integrated electrical utilities to divest their generation or transmission assets, or both;
(e) enabling full consumer retail electric service choice;
(f) enabling partial consumer retail electric service choice such as non-residential customer choice;
(g) authorizing community choice aggregation in South Carolina;
(h) redesigning the distribution system operator role in South Carolina to accommodate a modernized distribution grid featuring high levels of distributed energy resources, including exploration of establishing an independent distribution system operator and distribution-level electricity markets; and
(i) accelerating the transformation of South Carolina's electricity supply to achieve one hundred percent emissions-free generation; and

(2) study whether the General Assembly shall require any electrical utility, any electric cooperative, or the Public Service Authority of South Carolina to take actions necessary to implement one or more of the studied electricity market reform measures."

The study would be required to include examination of the legal and procedural requirements and costs and benefits of the electric market reforms as well as experience in other states. A report on whether the legislature should take action would be due March 15, 2021.

The full text of S.0998/H.4940 is available at this link.