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PPL Electric Utilities Seeks to Impose Migration Rider on Customers
August
10, 2011
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PPL Electric Utilities petitioned the Pennsylvania PUC to implement a default service reconciliation rider, or "migration" rider, to charge or refund to customers any default service reconciliations for their past service under default supply, regardless of the customer's current supplier.
PPL Electric's tariff does not currently provide that PPL can recover or credit reconciliations to customers who were default service customers when the over/under-collections were created, but who have since left default service and are now shopping customers. Rather, any reconciliations are recovered from current default service customers only.
PPL Electric said that since the expiration of rate caps, it has experienced a "higher than anticipated" number of customers taking competitive supply, thereby incurring "significant" over/under-collections, "which have distorted the Price-to-Compare."
PPL Electric said that the proposed reconciliation rider, "will provide a competitively neutral" method to recover over/under-collections, and reduce the impact of reconciliations on customers who take default service from PPL Electric.
PPL Electric said that the reconciliation rider will help "stabilize" the Price to Compare, "which, in turn, should assist customers in making intelligent and informed shopping decisions and thereby promote retail competition."
Furthermore, the reconciliation rider, "will help assure that shopping customers who return to default service are not subject to reconciliation impacts that arose while those customers were taking competitive supply," PPL Electric said.
PPL Electric cited examples of the current generation and transmission reconciliation mechanisms resulting in anywhere from a 2.63 cents per kWh increase in the Price to Compare to a 1.8 cents per kWh decrease in the Price to Compare. However, both these examples of "significant" impacts on the Price to Compare resulted from the annual reconciliation process applicable to either the Transmission Service Charge or hourly generation charges (GSC-2), and not the more frequent quarterly reconciliation of the non-hourly generation charges (GSC-1).
Furthermore, PPL Electric is seeking to modify the reconciliation of the generation charge applicable to non-hourly customers (GSC-1) so that it is performed on an annual basis, rather than a quarterly basis. This annual reconciliation would align with the PJM planning year starting June 1.
Notwithstanding the change to an annual reconciliation, PPL Electric would continue to adjust GSC-1 generation rates (and GSC-2 rates for larger customers which are already reconciled annually) on a quarterly basis to reflect changes in the underlying cost of purchasing default service supply.
If a customer switches to competitive supply, the customer will be subject to the reconciliation rider for a period equal to the number of consecutive months, not to exceed 12 months, that the customer took default service immediately prior to becoming a shopping customer.
Furthermore, since all new PPL Electric customers are required to take default service for one month to initiate service, the reconciliation rider will automatically apply to any new customer at PPL.
If a customer switches from competitive supply to default service, the customer will be exempt from the reconciliation rider for a period equal to the number of consecutive months, not to exceed 12 months, that the customer was on competitive supply not to exceed 12 months.
The reconciliation rider, which would include transmission and generation, would be a separate line item on bills, with different charges applicable to various groups of rate classes. Classes would be grouped into five categories for the reconciliation: RS-fixed, RS-TOU, Small C&I-fixed, Small C&I-TOU, and Large C&I.
Migration riders are common at Pennsylvania's natural gas distribution companies, and the PUC recently refused to modify their application during its retail gas markets investigation.
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