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PUC Approves Mid-Course Increase In Fixed Default Service Rates Due To Spike In PJM Capacity Prices
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Higher default service rates will apply to non-shopping customers at Duquesne Light in Pennsylvania after the PUC approved Duquesne Light's second filing to implement an increase due to higher capacity prices in the PJM 2025-2026 base residual auction for capacity
Specifically, the higher 2025/2026 capacity prices are impacting Duquesne Light during the current fixed price default service term due to the use of a capacity proxy price mechanism in wholesale supply bids. Under the proxy mechanism, Duquesne Light is currently paying wholesale suppliers higher prices for default service supplies than previously anticipated under the capacity proxy price used to set wholesale supply costs and resulting retail supply rates, due to the large spike in 2025/2026 PJM capacity prices
Absent an interim adjustment to the fixed default service rates for residential and small C&I customers, Duquesne Light estimated that an aggregate $7 million under-collection would accrue under various SOS contracts in its current laddered portfolio. Of that total, $4.5 million of the under-collection relates to service prior to September 1, 2024 (the date that Duquesne Light had originally sought as the effective date for an interim supply rate change, though, as noted below, the default service rate change will be effective September 25, 2024)
The PUC had previously rejected Duquesne Light's initial filing for an interim adjustment to the current fixed SOS rates for residential and small commercial customers for the period June 2024 to November 2024, because the tariff provision allowing an interim rate adjustment during a fixed SOS pricing period requires 30 days notice of the rate change. Duquesne Light's proposed effective date in its initial filing would not have provided the requisite 30 days' notice, and the PUC declined to grant a waiver of the requirement
Duquesne Light re-filed its sought interim SOS supply charge adjustment 30 days before a revised proposed effective date of September 25, 2024
The PUC, via Secretarial letter, has approved the interim default service supply charge adjustment at Duquesne Light, effective September 25, 2024, as consistent with the SOS tariff
The changes approved by the PUC are to Duquesne Light's default service supply rate, or supply charge. This rate does not comprise the entire Price to Compare, as it does not include transmission or the state tax adjustment surcharge
All rates below are for the standard supply charge for each customer type, and do not reflect optional EV TOU supply rates.
Under the approved interim adjustment, for residential customers, Duquesne Light will increase the standard supply charge by about 16%, to 9.4438 cents per kWh, from the current 8.1229 cents per kWh, to be in effect from September 25, 2024 through November 30, 2024
For small commercial and industrial customers under 25 kW (GS/GM, GMH, UMS), Duquesne Light will increase the standard supply charge by about 10%, to 8.9898 cents per kWh, from the current 8.1618 cents per kWh, to be in effect from September 25, 2024 through November 30, 2024
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September 17, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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