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Pennsylvania Boroughs Seeking To Implement Opt-Out Muni Aggregation Say Load Encompassed By Proposal Less Than Normal Switching, Won't Impact Default Service
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In response to a show cause order from the Pennsylvania PUC, the eight Pennsylvania municipalities seeking to implement an opt-out municipal aggregation argued that the load that would be included in their specific aggregation proposal is less than the normal churn onto and off of default service, and thus would not meaningfully impact default service
See background on the petition for opt-out municipal aggregation in Pennsylvania here
The municipalities -- the Boroughs of Camp Hill, Carlisle, Hatboro, Lansdowne, Media,
Narberth, State College, and Swarthmore -- were addressing various arguments from opponents of the opt-out aggregation who had averred that the load switching, and arising uncertainty, involved under opt-out aggregation would negatively impact default service rates and default service customers, by increasing load variability risk and attendant risk premiums
The Boroughs said that the switch of all of the customers "expected" to be served under their CCA would be less than the "typical" annual changes in default service load
The Boroughs said that EDCs bear the burden of demonstrating any harm alleged to arise under the CCA
The Boroughs further stressed that they are seeking limited findings with respect to their own opt-out aggregation, and that any alleged broader harm from any implementation of CCAs at large by other communities is not before the PUC in addressing the Boroughs' petition. The PUC may individually address any alleged harm to default service from other CCAs to the extent such CCAs seek to operate, the Boroughs said
Addressing arguments that the opt-out aggregation would ensnare customers who have affirmatively chosen to remain on default service, the Boroughs emphasized that all customers would be free to leave the CCA without penalty (in other words, opt-out switches away from SOS are acceptable because customers who want to remain on default service may just opt-in to EDC default service)
However, in arguing for the need for opt-out authorization in order for the CCA to be viable, the Boroughs say that, "opt-in is known to be ineffective".
The Boroughs said, concerning those customers who are on default service because such customers actively chose default service, "The burden imposed by the opt-out requirement, by itself, does not outweigh the
expected benefits of the CCA program."
The Boroughs also downplayed any potential harm to customers who are ultimately included in the aggregation but who did not want to be included (such as due to the customer not seeing the opt-out notice), surprisingly citing the New York experience
The Boroughs noted, "certain respondents are concerned that some customers will overlook
or ignore an education campaign, an opt out notice, an EDC transfer notice and new billing
statements and pay a CCA rate for renewable electricity that is potentially higher than the utility
default rate during some periods."
The Boroughs continued, "In Joule’s experience in New York, these instances are
comparatively rare, but that can be explored in further proceedings, as can the safeguards that can
be put in place to minimize the likelihood of inadvertent CCA service where such service may not
be advantageous for a particular customer."
As recently reported by EnergyChoiceMatters.com, the New York PSC recently reported that about 1,600 customers at one opt-out CCA (one that is not run by Joule) were wrongly enrolled into the aggregation. Worse, when confronted with this fact by a complaining customer, the CCA administrator and CCA supplier, as described by the NY PSC, repeatedly denied the customer's complaint, with the customer only obtaining relief when alerting NY Dept. of Public Service Staff
This disclosure was made as New York opened an investigation to re-evaluate the benefits of its entire opt-out CCA program, see full details here
The Boroughs' answer to the PUC's show cause order otherwise largely reiterates legal and policy arguments from its earlier pleadings, full discussion here and here
As previously reported, the Boroughs allege authority to undertake opt-out aggregation under their powers and responsibilities under the Pennsylvania Environmental Rights Amendment (see full discussion of this argument in our stories linked above)
However, while broadly asserting that the opt-out CCA is needed to procure renewable power to comply with the Boroughs' responsibilities under the Environmental Rights Amendment, the Boroughs do not appear to commit to any specific renewable procurement -- either in the amount, location, or ultimate "renewable" power source.
The Boroughs do say that the CCA will procure supplies to meet the individual boroughs' stated climate and environmental goals, but: (1) no firm commitment is made regarding any specific goal vis-a-vis how the CCA will implement and interpret any previously established Borough goal, and (2) some of the boroughs' goals set a far-forward deadline (i.e. 80% reduction in GHG by 2050) and it is unclear what level of renewable power would be included in any initial procurements by the CCA. For example, some of the Boroughs have committed to "work" on a "transition" to renewable energy, or have set a goal of 100% renewable energy by 2050 for their communities, but "renewable energy" is not defined in the CCA petition.
The Boroughs also state that the CCA will assist the Boroughs' ability to sign longer-term contracts to support newly constructed, renewable "and resilience"
resources, but again, while this is a stated intent, no commitment is made that the CCA will procure such resources. The Boroughs state that with opt-out aggregation, "they will be able to negotiate with resources in the PJM queue that need to demonstrate
viable offtake contracts, and to sponsor the development of new local resources...", but no specificity is provided on, for example, any minimum procurement quantities from such resources
While the Boroughs fault retail suppliers for using low-value national RECs, there does not appear to be any commitment from the Boroughs that their procurement of renewable power, which is said to necessitate the opt-out CCA, would, for example, be limited to sources qualifying under Pennsylvania's AEPS (which limits the geography and fuel types -- no nuclear -- for qualifying AEPS resources)
The Boroughs do state, "Moreover, The [sic] Commission may condition its order or orders in this
proceeding on the commitments made by the Boroughs as to the operation of the CCA program
and can presume compliance with such conditions," however, any renewable-specific commitments, other than the statement that the Boroughs will use the CCA to achieve the broadly stated climate goals of its members, is not clear
Rather, the Boroughs, "commit to operate their respective Programs in a manner calculated to achieve
a renewable energy transition for their jurisdiction."
The Boroughs note that, "they may select different product mixes for delivery in
their respective Boroughs consistent with their individual renewable energy goals."
P-2024-3049623
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November 26, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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