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March 27, 2020
NEM Member Calls on COVID19 and Industry Response

This week, NEM convened a member call on the COVID19 emergency and the industry response. Topics of discussion included:

1-Member observations on remote working (employees, call center staff, vendors, handling incoming mail, maintaining employee engagement while working remotely);
2-Temporary emergency door-to-door suspensions for consumer and agent safety;
3-Financial impacts
a-Delivery requirements based on historical consumption for commercial electric and natural gas customers (reductions in usage could be significant);
b-Greater risk of customer nonpayment for suppliers that bill customers directly and utility-billed non-POR customers;
c-Expected increase in POR discount rates caused by anticipated increase in utility bad debt rates;
d-Responding to customers need for increased latitude for late payments;
e-In Texas, the Commission is working on a moratorium on residential customer disconnects, including a mechanism to manage REP risks;
4-NEM filed a request for further extension of the December 2019 Order with the New York Public Service Commission;
5-New NY law that prohibits certain telemarketing during a state of emergency; and
6-Massachusetts Attorney General’s emergency regulations on price gouging.

NEM will continue the discussion of the COVID19 emergency and the industry response on Monday, March 30th at 2PM ET. Please see the email announcement for dial in information.

Click here to view all past updates.
Commission Ratifies Emergency Order on Door-to-Door Sales

At its agenda meeting yesterday, the full Commission ratified the Emergency Order issued by Chairman Brown Dutrieuille on March 16, 2020, that suspended all door-to-door, in-person and public event sales activities by agents of competitive electric and natural gas suppliers in the Commonwealth’s retail energy markets during the pendency of the Proclamation of Disaster Emergency, or unless otherwise directed by the Commission. The full text of the Emergency Order is available on the NEM Website.

PPL and PECO DSP Filings

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. 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.

In January 2020, a Secretarial Letter was 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 were 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."

This week, PPL and PECO have made their proposed DSP filings with provisions in response to the Commission's direction.

PPL's DSP V Filing would cover the period of June 1, 2021, through May 31, 2025. As explained by PPL, the DSP V proposal "consists of a proposal for competitive procurement of Default Service supply and related Alternative Energy Credits (AECs) during the DSP V Program Period; an implementation plan; a proposed rate design, including a Time-of Use (TOU) rate option for Default Service during the DSP V Program Period; a proposal to modify the Company’s current Standard Offer Referral Program (SOP); a proposal to require Customer Assistance Program (CAP) customers to take Default Service; and a contingency plan for the DSP V Program."

PPL is proposing modifications to its SOP including the automatic transfer of SOP customers to default service upon the expiration of their SOP contracts unless the customer affirmatively elects to remain a shopping customer; replacing SOP scripting used by CSRs; and changing the EGS enrollment term from quarterly to semi-annually, to align with the PPL Electric PTC.

PPL also proposes to eliminate the CAP SOP. "As a result, CAP customers will be ineligible to shop and must remain on or be placed on default service beginning on June 1, 2020. PPL Electric notes that low income customers may elect to shop at any time. However, such customers will not be permitted to enter, or remain in, the CAP Program while shopping." PPL is also proposing to create a renewable rate program for default service customers with participation on an opt-in basis.

PECO's DSP V petition would cover the period of June 1, 2021, through May 31, 2025. In its petition, PECO requests approval of the following:
(1) the DSP V procurement plan, implementation plan, contingency plan, and associated procurement documents and agreements for default service supply;
(2) the proposal to solicit new ten-year contracts for Solar Alternative Energy Credits to satisfy the requirements of Pennsylvania’s Competition Act and the Alternative Energy Portfolio Standards Act;
(3) the proposed default service rate design, including proposed time-of-use rate options;
(4) continuation of the existing EGS Standard Offer Program, including the associated cost recovery mechanism approved in PECO’s prior default service proceedings; and
(5) the proposed plan regarding shopping by low income customers enrolled in the Customer Assistance Program.

As explained by PECO, "[it] is proposing three principal changes to its default service program and the products previously approved by the Commission in DSP IV. First, PECO is proposing to procure new Solar AEC contracts to replace PECO’s existing ten year Solar AEC contracts previously approved by the Commission that will have expired by the end of DSP IV. Second, PECO is introducing new TOU default service rate options for eligible customers in PECO’s Residential and Small Commercial procurement classes (the 'TOU Rates') to comply with PECO’s obligation under Act 129 to offer TOU and real-time rates to all default service customers with smart meters. Finally, PECO is proposing to permit CAP customers to shop for generation service in accordance with the Commission’s proposed Policy Statement on Electric Customer Assistance Program Participant Shopping."

The full texts of the Secretarial Letter, PPL's DSP V Filing and PECO's DSP V Petition are available at these links.

Click here to view all past updates.
Commission Adopts COVID19 Electricity Relief Program

In response to the COVID19 emergency, the Commission adopted a series of Orders at its agenda meeting this week. The Commission directed that all retail electric providers be required to offer a deferred payment plan to customers, upon request. In addition, a COVID19 Electricity Relief Program was established that “creates a temporary exemption from disconnections for non-payment for eligible residential customers in areas open to customer choice, thus protecting affected residential customers and reducing the exposure of the competitive market from excessive COVID-19-related bad debt that could lead to industry upheaval and bankruptcies.” Eligible residential customers are those who cannot pay their electric bill due to unemployment or low-income from the effects of the COVID-19 disaster. A rider will be collected from all customer classes, set initially based on the amount of $0.33 per megawatt hour (MWh), for the purposes of reimbursing REPs and TDUs. The full texts of the Orders are available on the NEM Website.

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