|
Search |
Migration Rider at PPL Would be "Disastrous," Retail Suppliers Say
August 24, 2011
Email This Story
PPL Electric Utilities' proposal to extend default service reconciliation to an annual process, rather than quarterly, in combination with a new nonbypassable migration rider, "will prove to be disastrous" to the retail market, and, "provide very real incentives to have large numbers of customers switch back to default service," Dominion Retail said in an answer to PPL's petition.
PPL's petition to impose a migration rider was first reported by Matters (see 8/10). As noted by Matters, PPL is also seeking to change the reconciliation of default service costs from a quarterly to annual process for non-hourly customers.
"Despite PPL's claim of 'competitive neutrality,' it has proposed a scheme that is so obviously contrary to the goal of encouraging customers to participate in competitive markets that it should be summarily rejected, particularly in light of the Commission's ongoing efforts to improve the competitiveness of the retail electricity markets," Dominion Retail said.
PPL's statement that the migration rider will promote the development of the retail market, "is unsupportable in light of the fact that it is the migration riders in the natural gas markets [that] have almost singlehandledly managed to suppress the statewide residential shopping levels to the single digits, while electricity shopping has grown significantly in only the last two years," Dominion Retail said.
"Stretching recovery over a full year will simply serve to further disassociate the incurrence of the costs from the recovery from customers, thus making the price to compare ('PTC') even less market relevant," Dominion Retail added.
The Retail Energy Supply Association likewise opposed PPL's petition, "because PPL's proposal will send inaccurate price signals to customers and may distort customer shopping decisions."
"[T]he actual default service 'cost' will not be passed on to customers in a timely way under PPL's proposal here because it will be amortized over a year. Therefore, customers will not be seeing the true cost of energy on a contemporaneous basis thus distorting their perception of the market price of energy," RESA said.
"Default service rates must be market-responsive and must reflect all of the relevant costs incurred by the EDC in providing default service ... If default service rates do not accurately track changes in costs and market prices over time, then the default service rate will be out of market. At best, this creates intermittent opportunities for competitive suppliers to attract customers," RESA added.
"Such a market design is not sustainable and presents too much risk for retail suppliers to enter the market," RESA concluded.
RESA also said that the migration rider will confuse customers in making shopping decisions, and act as a barrier to choice.
Email This Story
Be Seen By Energy Professionals in Retail and Wholesale Marketing
Run Ads with Energy Choice Matters
Call Paul Ring
954-
|
Search |
