Report: Residential Shopping Customers At PECO Paid $103 Million More Than Default Service In 2023; Over $800 Million More In Past Six Years

June 19, 2024

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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Residential electric customers on competitive retail supply at PECO in Pennsylvania paid, in aggregate, $103 million more in 2023 versus what they would have paid under PECO's price to compare, according to an analysis by the Tenant Union Representative Network and Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (TURN/CAUSE-PA)

TURN/CAUSE-PA's analysis was recently filed as part of the groups' testimony in PECO's default service proceeding. As first reported by EnergyChoiceMatters.com, PECO in such proceeding has proposed, among other things, to include, on shopping customer bills, a comparison of the customer's actual cost with a retail supplier versus the cost they would have paid under the price to compare

Using PECO aggregate billing data obtained through an interrogatory, TURN/CAUSE-PA's analysis used revenues billed by retail suppliers to shopping customers on a monthly or annual basis and compared such revenues to the applicable default service charge

From 2018 to 2023, electric residential shopping customers at PECO paid $801 million more than the price to compare, with the yearly cost over the price to compare as follows (yearly amounts rounded):

      $ in Millions
2018      132
2019      137
2020      135
2021      138
2022      154
2023      103

In separate testimony, the Pennsylvania Office of Consumer Advocate, citing the TURN/CAUSE-PA analysis, noted that, in every year during the period, shopping residential customers paid more versus the price to compare

TURN/CAUSE-PA further said that, on a percentage basis, residential shopping customers were charged between 32% and 81% more for supply per month than residential default service customers. Across the entire six-year period, residential shopping customers were charged, on average, 57% more per month for supply than default service residential customers, TURN/CAUSE-PA said

On average over the six-year period analyzed, residential shopping customers were charged $0.0328 per kWh more than residential customers choosing to remain on default service, TURN/CAUSE-PA said.

On an individual monthly basis, the average residential per kWh charges imposed by retail electric suppliers in excess of the default service price ranged from $0.0228 to $0.0550 per kWh higher than the default service rate during the six-year period

TURN/CAUSE-PA also said that Small Commercial and Industrial customers paid nearly $134 million more than the default service price, and Large Commercial and Industrial customers paid roughly $72 million more than the default service price, during the six-year period from 2018 through 2023.

TURN/CAUSE-PA also cited "pronounced disparities" in relative termination rates for shopping customers who are confirmed low income (CLI) but who are not Customer Assistance Program (CAP) customers (and thus who remain eligible to shop)

TURN/CAUSE-PA said that, from 2018-2022, the CLI shopping customer termination rate ranged between 52% to 78%, while involuntary termination rates for PECO’s CLI (non-CAP) customers as a whole (shopping and default) ranged between 30% and 55% during this same timeframe.

"[T]he pronounced disparities in relative termination rates for shopping customers clearly demonstrate that excessive pricing in the competitive energy market exacerbates utility insecurity for PECO’s low income customers. High termination rates drive higher collections costs and uncollectible expenses borne by other ratepayers -- along with a host of consequences to short- and long-term health, safety, and stability of individuals and communities," TURN/CAUSE-PA said

Citing the TURN/CAUSE-PA data, OCA said, "it is clear that some reforms are needed[.]"

OCA recommends than the Standard Offer Customer Referral Program (SOP) be eliminated. To the extent the SOP continues, OCA urges that SOP customers be returned to default service at the end of the SOP term, absent affirmative consent of the customer to continue with their SOP retail supplier

P-2024-3046008

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