Pepco filed a proposed dynamic pricing plan with the Commission. By the terms of the plan, dynamic pricing will first be made available to 5,000 residential customers beginning in 2012, with all residentials becoming eligible in 2013. Dynamic pricing for non-residential customers will be made available to 2,000 customers in 2013, with all non-residential customers becoming eligible in 2014. Customers will have three billing options: 1) Critical Peak Pricing, 2) Critical Peak Rebate; or 3) flat Standard Offer Service pricing.

NEM filed comments on the proposal highlighting the critical role that competitive energy marketers will play in providing smart grid-enabled products and services to consumers and providing recommendations to smooth the transition for consumers as they are provided with improved, timely pricing signals. NEM noted its white paper that sets forth recommendations for “Achieving Significant, Near-Term Demand Response by Residential and Small-Commercial Customers” through the availability of transitional DR load profiles. NEM’s comments recommended that: 1) Given that Pepco’s dynamic pricing implementation timeline does not begin until 2012, the interim time period represents an excellent opportunity to educate consumers about demand response through the availability of transitional DR load profiles; and 2) Competitive energy marketers and other consumer-authorized third parties must be provided with open, non-discriminatory and real-time access to Pepco’s Advanced Metering Infrastructure (AMI) and the data it generates.

The full texts of NEM's Comments and the NOPR are available on the NEM Website.

NEM filed comments on the Commission's proposed revisions to the default service regulations and policy statement to implement the provisions of Act 129. In particular, both the proposed regulations and policy statement pertain to the Act 129 “least cost” standard for electric utilities' generation purchases. NEM argued that the “least cost to customers over time” standard should be consistent with the competitive electric market principles adopted for the Commonwealth in the Electricity Generation Customer Choice and Competition Act. Additionally, in a true “least cost” regime the market-based rate will yield the lowest cost over time to consumers with the appropriate time frame for evaluating whether a utility's procurement plan will yield the “least cost” to consumers correspondingly keyed to current market conditions. Just as important, in NEM's view, in implementing a “least cost” utility procurement standard that relies on current market based pricing, is the concomitant impact on the competitive suppliers and their ability to likewise offer “least cost” products in the marketplace. So, just as the utility market-based rate represents a “least cost” offer, by supporting robust competition amongst EGSs that participate in the marketplace, it should also encourage “least cost” offers from these providers. In other words, utility market-based pricing will encourage suppliers to enter the market to serve Pennsylvania consumers. In so doing, this will exert downward price pressure on competitive market offerings.

NEM also urged that competitive market forces, rather than regulatory intervention, should be permitted to identify and meet the need for new capacity resources, and noted that PJM‟s Reliability Pricing Model was implemented to function in this manner. The full text of NEM's Comments is available on the NEM Website.

The Commission approved a settlement agreement, with modification, providing for the establishment of a POR program at NFG. The settlement permits NFG to terminate customers for failure to pay the lesser of a consolidated bill reflecting billed supplier charges, or an otherwise applicable consolidated bill reflecting utility supply charges. The settlement included a proposed residential discount rate of 2.7086%, of which 2.2301 was for uncollectibles, 0.0629% was for implementation costs, and 0.4156% was a risk factor. The non-residential discount rate was set at 0.4766%, including a 0.1852% risk factor. The majority of the Commissioners voted to modify the settlement and reject the risk factor charge as "contrary to our efforts to remove barriers to competitive market entry" and "for which there is no clear cost justification." Commissioner Christy dissented from the decision arguing that the Commission should not disturb the terms of a diversely-supported settlement. The full texts of the ALJ's Recommended Decision, Chairman's Motion and Commissioner Christy's Dissent are available on the NEM Website.