[35 Pa.B. 1421]
[Continued from previous Web Page] Conclusion
The Commission welcomes the filing of comments and reply comments by all interested parties on all aspects of these regulations. Given the importance and complexity of the issues now being considered, the normal comment period will be extended to sixty days. No extensions will be granted for the filing of comments.
The Commission is particularly interested in comments on a number of areas of importance, including: definitions, the replacement of default service providers pursuant to § 54.183(b), the length of the term of default service, the structure of the procurement process, cost recovery allocation and recovery mechanisms, hourly priced service, the review process for implementation plans, and customer migration. To the extent that a party believes any sections of these proposed regulations need revising, we ask that alternative language be suggested. This is particularly important in the area of definitions. If a party believes that additional definitions are required, specific language should be proposed. For the supply procurement process and the Commission review process, we are particularly interested in whether appropriate time has been allotted.
Accordingly, under sections 501 and 2807(e)(2) of the Public Utility Code, 66 Pa.C.S. §§ 501, 2807(e)(2); sections 201 and 202 of the act of July 31, 1968, P. L. 769 No. 240, 45 P. S. §§ 1201--1202, and the regulations promulgated thereunder at 1 Pa. Code §§ 7.1, 7.2, and 7.5; section 204(b) of the Commonwealth Attorneys Act, 71 P. S. 732.204(b); section 745.5 of the Regulatory Review Act, 71 P. S. § 745.5; and section 612 of The Administrative Code of 1929, 71 P. S. § 232, and the regulations promulgated thereunder at 4 Pa. Code §§ 7.231--7.234, we are considering adopting the proposed regulations set forth in Annex A, attached hereto; Therefore,
It Is Ordered That:
1. The Proposed Rulemaking at L-0040169 will consider the regulations set forth in Annex A.
2. The Secretary shall submit this order and Annex A to the Office of Attorney General for review as to form and legality and to the Governor's Budget Office for review of fiscal impact.
3. The Secretary shall submit this order and Annex A for review and comments to IRRC and the Legislative Standing Committees.
4. The Secretary shall certify this order and Annex A and deposit them with the Legislative Reference Bureau to be published in the Pennsylvania Bulletin.
5. An original and 15 copies of any written comments referencing the docket number of the proposed rulemaking be submitted within 60 days of publication in the Pennsylvania Bulletin to the Pennsylvania Public Utility Commission, Attn.: Secretary, P. O. Box 3265, Harrisburg, PA 17105-3265. Reply comments will be due 30 days from the last date of the 60 day comment period.
6. A copy of this order and Annex A shall be served on all jurisdictional electric distribution companies, all licensed electric generation suppliers, the Office of Trial Staff, the Office of Consumer Advocate, the Office of Small Business Advocate and all other parties of record in the Provider of Last Resort Roundtable at M-00041792.
7. The contact persons for this Proposed Rulemaking are Robert Bennett, Bureau of Fixed Utility Services, (717) 787-5553 (technical), and Shane Rooney, Law Bureau, (717) 787-2871 (legal).
8. The Commission docket opened for the Provider of Last Resort Roundtable at M-00041792 be marked closed.
JAMES J. MCNULTY,
SecretaryFiscal Note: 57-237. No fiscal impact; (8) recommends adoption.
Statement of Commissioner Kim Pizzingrilli
Electric Distribution Companies' Obligation to Serve Retail Customers at the Conclusion of the Transition Period Pursuant to 66 Pa.C.S. § 2807(e)(2); Public Meeting December 16, 2004; DEC-2004-L-0101*;
DOC. NO. L-00040169
Provider of Last Resort Roundtable; M-00041792 Today the Commission issues a significant Notice of Proposed Rulemaking in the ongoing development of Pennsylvania's competitive retail electric market. The proposed default service regulations will serve as the basis for final regulations of this important service. As retail electric competition continues to evolve in Pennsylvania, it is vital that the Commission ensure that all Pennsylvania electric customers continue to receive safe and reliable electric service. I wish to commend the efforts of those that have significantly contributed in the Commission's efforts, including representatives from Pennsylvania's electric distribution companies, competitive electric generation suppliers, consumer advocates and leaders of both small and large businesses. The continued participation of these parties to offer well-grounded solutions to many complex issues has been an invaluable asset to the Commission in developing this rulemaking.
Throughout the past year these parties along with the Commission and our staff have delved into the myriad of issues associated with the provision of default electric service. Often the resolution of one issue resulted in the identification of a multitude of equally difficult tangential issues. The proposed regulations address the majority of the core issues related to default service with the intent of providing sufficient flexibility for the competitive market, its participants and this Commission to respond to any new developments that arise in the future. While I support the proposed regulations I note that one area requires further consideration and likely additional regulatory language.
Specifically, the proposed regulations provide restrictions on the transfer of retail customers' accounts to default service by electric generation suppliers. By adding a new section to the Commission's preexisting Competitive Safeguard Regulations4 (Chapter 54) we are addressing this issue through an amendment. The proposed new section restrains the transfer of customer accounts to default service without the consent of the default service provider, except under specific circumstances. This is the sole addition proposed to our Competitive Safeguard Regulations but unlikely to be the only means by which Pennsylvania's competitive market could be unduly influenced via anti-competitive behavior.
The Order recognizes that the subject of competitive safeguards is broad and includes many issues beyond this one and calls for the potential need to further examine Chapters 54 and 575 of our Regulations with the objective of ensuring that adequate competitive safeguards are in place. For this reason, I encourage parties to submit comments on other issues involving competitive safeguards that may be required to ensure the proper functioning of Pennsylvania's competitive retail markets.
Annex A
TITLE 52. PUBLIC UTILITIES
PART I. PUBLIC UTILITY COMMISSION
Subpart C. FIXED SERVICE UTILITIES
CHAPTER 54. ELECTRICITY GENERATION CUSTOMER CHOICE
Subchapter A. CUSTOMER INFORMATION § 54.4. Bill format for residential and small business customers.
* * * * * (b) The following requirements apply only to the extent to which an entity has responsibility for billing customers, to the extent that the charges are applicable. The [provider of last resort] default service provider will be considered to be an EGS for the purposes of this section. Duplication of billing for the same or identical charges by both the EDC and EGS is not permitted.
* * * * * § 54.5. Disclosure statement for residential and small business customers.
* * * * * (b) The EGS shall provide the customer written disclosure of the terms of service at no charge whenever:
* * * * * (3) Service commences from a [provider of last resort] default service provider.
(c) The contract's terms of service shall be disclosed, including the following terms and conditions, if applicable:
* * * * * (9) The name and telephone number of the [provider of last resort] default service provider.
* * * * * (h) If the [provider of last resort] default service provider changes, the new [provider of last resort] default service provider shall notify customers of that change, and shall provide customers with their name, address, telephone number and Internet address, if available.
§ 54.6. Request for information about generation supply.
(a) EGSs shall respond to reasonable requests made by consumers for information concerning generation energy sources.
* * * * * (2) The [provider of last resort] default service provider shall file at the Commission the annual licensing report as required by the Commission's licensing regulations in this chapter and shall otherwise comply with paragraph (1).
* * * * *
Subchapter B. ELECTRICITY GENERATION SUPPLIER LICENSING § 54.31. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicate otherwise:
* * * * * Default service provider--The incumbent EDC within a certificated service territory or a Commission approved alternative default service provider.
* * * * * [Provider of last resort--A supplier approved by the Commission under section 2807(e)(3) of the code (relating to duties of electric distribution companies) to provide generation service to customers who contracted for electricity that was not delivered, or who did not select an alternative electric generation supplier, or who are not eligible to obtain competitive energy supply, or who return to the provider of last resort after having obtained competitive energy supply.]
* * * * * § 54.32. Application process.
* * * * * (h) An EDC acting within its certificated service territory as a [provider of last resort] default service provider is not required to obtain a license.
§ 54.41. Transfer or abandonment of license.
* * * * * (b) A licensee may not abandon service without providing 90 days prior written notice to the Commission, the licensee's customers, the affected distribution utilities and [providers of last resort] default service providers prior to the abandonment of service. The licensee shall provide individual notice to its customers with each billing, in each of the three billing cycles preceding the effective date of the abandonment.
Subchapter E. COMPETITIVE SAFEGUARDS § 54.123. Transfer of customers to default service.
The following standards apply to the transfer of a retail customer's electric generation service from an EGS to a default service provider within the meaning of § 54.182 (relating to definitions):
(1) An EGS may not transfer a retail customer from its electric generation service to the default service provider without the consent of the default service provider, except in the following situations:
(i) Upon Commission approval of the abandonment, suspension or revocation of an EGS license, consistent with §§ 54.41 and 54.42 (relating to transfer or abandonment of license and license suspension; license revocation).
(ii) Upon nonpayment by a retail customer for services rendered by the EGS.
(iii) To correct an unauthorized or inadvertent switch of a retail customer's account from default service to an alternative EGS's service.
(iv) Upon the normal expiration of contracts that are not structured in a way to exploit seasonal variations in market prices for electric generation service.
(2) An EGS may initiate transfers in the situations set forth in paragraph (1) through standard electronic data interchange protocols.
(3) An EGS may not initiate or encourage transfers of service to a default service provider from the EGS to exploit seasonal variations in market prices for electric generation service.
(4) The Commission may impose a penalty for every retail customer transferred to default service in violation of this section, consistent with 66 Pa.C.S. §§ 3301--3316 (relating to violations and penalties).
Subchapter G. DEFAULT SERVICE Sec.
54.181. Purpose. 54.182. Definitions. 54.183. Default service provider. 54.184. Default service provider obligations. 54.185. Default service implementation plans and terms of service. 54.186. Default service supply procurement. 54.187. Default service rates and the recovery of reasonable costs. 54.188. Commission review of default service implementation plans. 54.189. Default service customers. § 54.181. Purpose.
This subchapter implements 66 Pa.C.S. § 2807(e) (relating to duties of electric distribution companies), pertaining to an EDC's obligation to serve retail customers at the conclusion of the restructuring transition period. The provisions in this subchapter ensure that retail customers who do not choose an alternative EGS, or who contract for electric energy that is not delivered, have access to generation supply at prevailing market prices. The EDC shall fully recover all reasonable costs for acting as a default service provider of electricity to all retail customers in its certificated distribution territory.
§ 54.182. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
Alternative energy portfolio standards--A requirement that a certain percentage of electric energy sold to retail customers in this Commonwealth be derived from alternative energy sources, as defined in the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1647.1--1647.7).
Commission--The Pennsylvania Public Utility Commission.
Competitive procurement process--A fair, transparent and nondiscriminatory process by which a default service provider acquires electric generation supply to serve its default service customers through a bid solicitation process.
Default service--
(i) Electric generation service provided by a default service provider to a retail electric customer who does not choose an alternative EGS or who contracts for electric energy and it is not delivered.
(ii) Electric generation service provided pursuant to a Commission approved default service plan.
Default service implementation plan--A filing submitted by a default service provider to the Commission that identifies the means for procuring generation supply for default service customers at prevailing market rates, the reasonable costs associated with default service and all other necessary terms and conditions of service.
Default service provider--The incumbent EDC within a certificated service territory or a Commission approved alternative default service provider.
EDC--Electric distribution company--The term has the same meaning as defined in 66 Pa.C.S. § 2803 (relating to definitions).
EGS--Electric generation supplier--The term has the same meaning as defined in 66 Pa.C.S. § 2803.
FERC--The Federal Energy Regulatory Commission.
Fixed rate option--A default service price that is set in advance for the entire term of the default service implementation plan that may include seasonal differences.
Hourly priced service--A default service price where the energy component of the generation supply charge is based on the RTO or ISO's LMP for energy, or other similar, mechanism.
ISO--A FERC-approved independent transmission system operator.
LMP--Locational marginal pricing--A pricing mechanism used by some RTOs and ISOs, as defined in their FERC approved tariffs.
Prevailing market price--
(i) The price of electric generation supply for a term of service realized through a default service provider's implementation of and compliance with a Commission- approved default service implementation plan.
(ii) The price of electric generation supply in the RTO or ISO administered energy markets in whose control area default service is being provided, acquired under the conditions specified in § 54.186(g), § 54.187(i) or § 54.188(e) (relating to default service supply procurement; default service rates and the recovery of reasonable costs; and Commission review of default service implementation plans).
Replacement procurement process--A Commission-approved process, submitted as part of the default service implementation plan, which provides for the acquisition of generation supply if a supplier fails to deliver generation contracted for under the terms of a competitive procurement process.
Retail customer or retail electric customer--These terms shall have the same meaning as defined in 66 Pa.C.S. § 2803.
RTO--A FERC-approved regional transmission organization.
§ 54.183. Default service provider.
(a) The default service provider shall be the incumbent EDC in each certificated service territory, except as provided for under subsection (b).
(b) An EDC may petition the Commission to be relieved from the default service obligation. In the alternative, the Commission may propose through its own motion that an EDC be relieved from the default service obligation. The Commission may approve those request if it is in the public interest. In such circumstances, the Commission will announce through an order a competitive process to determine the alternative default service provider, which may be either an EDC or a licensed EGS.
(c) When the Commission finds that an EDC should be relieved of the default service obligation, the competitive process for the replacement of the default service provider shall be as follows:
(1) Any EDC or EGS that wishes to be considered for the role of the alternative default service provider shall apply for a certificate of public convenience, consistent with 66 Pa.C.S. §§ 1101--1103 (relating to organization of public utilities and beginning of service; enumeration of acts requiring certificate; and procedure to obtain certificates of public convenience).
(2) Applicants shall demonstrate their operational and financial fitness to serve and their ability to comply with Commission regulations, orders and applicable laws pertaining to public utility service.
(3) If no applicant can meet this standard, the incumbent EDC will be required to continue the provision of default service.
(4) If one or more applicants meet the standard provided in paragraph (2), the Commission will grant a certificate of public convenience to act as a default service provider to the applicant best able to fulfill the obligation.
(5) An EGS that is granted a certificate of public convenience to act as an alternative default service provider will be considered a public utility within the meaning of 66 Pa.C.S. § 102 (relating to definitions).
§ 54.184. Default service provider obligations.
(a) A default service provider shall be responsible for the reliable provision of default service to retail customers who are not receiving generation services from an alternative EGS within the certificated territory of the EDC that it serves.
(b) A default service provider shall comply with applicable Commission regulations and orders to the extent that the obligations are not modified by this subchapter.
(c) A default service provider shall continue the universal service program in effect in the EDC's certificated service territory or implement, subject to Commission approval, a similar customer assistance program consistent with 66 Pa.C.S. §§ 2801--2812 (relating to Electricity Generation Customer Choice and Competition Act).
§ 54.185. Default service implementation plans and terms of service.
(a) A default service provider shall file a default service implementation plan with the Commission's Secretary's Bureau no later than 15 months prior to the conclusion of the currently effective default service plan or Commission-approved generation rate cap for that particular EDC service territory, unless the Commission authorizes another filing date.
(b) Default service implementation plans must comply with Commission regulations pertaining to documentary filings, except when modified by this subchapter. The default service provider shall serve copies of the default service implementation plan on the Pennsylvania Office of Consumer Advocate, Pennsylvania Office of Small Business Advocate, the Commission's Office of Trial Staff, and the RTO or ISO in whose control area the default service provider is operating.
(c) A default service implementation plan must propose a minimum term of service of at least 12 months, or multiple 12 month periods, or for a period necessary to comply with subsection (f).
(d) A default service implementation plan must propose a fair, transparent and nondiscriminatory competitive procurement process consistent with § 54.186 (relating to default service supply procurement) for the acquisition of sufficient electric generation supply, at prevailing market prices, to meet the demand of all of the default service provider's retail electric customers for the term of service. The default service plan must identify its method of compliance with the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1647.1--1647.7).
(e) The Commission may direct that some or all default service providers file joint default service implementation plans that propose a competitive procurement process to procure electric generation supply for all of their default service customers. In the absence of such a directive, some or all default service providers may jointly file default service plans that propose a competitive procurement process to procure electric generation for all of their default service customers. A multi-service territory competitive procurement process must comply with § 54.186.
(f) A default service provider shall document that its proposal is consistent with the legal and technical requirements pertaining to the generation, sale and transmission of electricity of the RTO or ISO in whose control area it is providing service. The default service plan's term of service and generation supply acquisition processes must align with the planning period of that RTO or ISO.
(g) The default service implementation plan must include a schedule of rates, rules and conditions of default service in the form of proposed revisions to its tariff. The default service provider may use the already effective retail customer classes in the EDC's service territory, or may propose a reclassification of retail customers.
(h) The default service implementation plan must identify the costs, consistent with § 54.187 (relating to default service rates and the recovery of reasonable costs), that will be recovered through a schedule of rates for the provision of default service.
(i) The default service implementation plan must include reasonable credit requirements, or other reasonable assurances of any supplier of electric generation services' ability to perform, as approved by the Commission.
(j) The default service implementation plan must identify the load size and end date of all existing long-term generation contracts that are in effect between the EDC and a retail customer within its service territory.
(k) The default service implementation plan should include copies of any proposed confidentiality agreements for the protection of proprietary information of the default service provider and generation suppliers. The Commission will approve reasonable confidentiality agreements, including expiration provisions, that will be binding on the default service provider, generation suppliers and any third party involved in the administration, review or monitoring of a default service supply procurement process.
(l) The default service provider shall include in its implementation plan a replacement procurement process to ensure the reliable provision of default service if a supplier fails to deliver electric generation supply it has agreed to provide under the terms of a Commission-approved competitive procurement process.
(m) The Commission may issue orders further specifying the form and content of default service implementation plans when necessary to enforce or carry out the provisions of 66 Pa.C.S. §§ 2801--2812 (relating to Electricity Generation Customer Choice and Competition Act), and other applicable law.
§ 54.186. Default service supply procurement.
(a) A default service provider shall procure the electricity needed to provide default service only through a competitive procurement process or replacement procurement process approved by the Commission, with the following exceptions:
(1) Hourly priced service provided under § 54.187(e) (relating to default service rates and the recovery of reasonable costs).
(2) Supply procured through RTO or ISO administered energy markets consistent with subsection (g), § 54.187(i) or § 54.188(e) (relating to Commission review of default service implementation plans).
(b) A default service provider's competitive procurement process shall adhere to the following standards:
(1) A default service provider's supplier affiliate may participate in any competitive procurement process. The default service provider shall propose and implement protocols to ensure that its supplier affiliate does not receive an advantage in either the solicitation and evaluation of competitive bids, or any other aspect of the competitive procurement process. The process must comply with the codes of conduct promulgated by the Commission in § 54.122 (relating to code of conduct).
(2) A default service provider's proposed competitive procurement process must include:
(i) A bidding schedule.
(ii) A definition and description of the power supply products on which potential suppliers shall bid.
(iii) Bid price formats.
(iv) The time period during which the power will need to be supplied for each power supply product.
(v) Bid submission instructions and format.
(vi) Bid evaluation criteria.
(vii) Relevant load data, including the following:
(A) Aggregated customer hourly usage data for all retail customers.
(B) Number of retail customers.
(C) Capacity peak load contribution figures by rate schedule.
(D) Historical monthly retention figures by rate schedule.
(E) Estimated loss factors by rate schedule.
(F) Customer size distribution by rate schedule.
(c) A default service provider may employ a third-party to design and implement the competitive procurement process.
(d) The competitive procurement process may be subject to direct oversight by the Commission or an independent third party. Any third party shall report to the Commission. Commission staff and any third party involved in oversight of the procurement process shall have full access to all information pertaining to the competitive procurement process, and may monitor the process either remotely or where the process is administered. Any third party retained for purposes of monitoring the competitive procurement process shall be subject to confidentiality agreements identified in § 54.185(k) (relating to default service implementation plans and terms of service).
(e) The default service provider shall evaluate and select winning bids in a nondiscriminatory manner based on bid evaluation criteria set forth consistent with subsection (b)(2)(vi).
(f) The Commission will review the acquisition of generation supply and verify compliance with the approved competitive procurement process as follows:
(1) The Commission's review will occur within a time period as specified in the approved competitive procurement process.
(2) The review period may not be less than 3 business days.
(3) The Commission's verification of compliance with an approved competitive procurement process will constitute its certification of the default service provider's compliance with the approved default service implementation plan.
(g) If the implementation of a competitive procurement process under this section does not result in sufficient electric supply to meet the default service provider's full load requirements, the default service provider shall repeat the competitive procurement process. The default service provider may petition for necessary changes to the previously approved competitive procurement process to ensure the acquisition of sufficient supply. When necessary to procure electric generation supply before the completion of another competitive procurement process, a default service provider shall acquire supply at prevailing market prices and shall fully recover reasonable costs associated with this activity. In this circumstance, the prevailing market price shall be the price of electricity in the RTO or ISO's administered energy markets in whose control area that service is being provided. The default service provider shall follow acquisition strategies that reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies), when selecting from the various options available in these energy markets.
(h) The bids submitted by a supplier under the competitive procurement process shall be treated as confidential through the expiration date identified in the confidentiality agreement approved by the Commission under § 54.185(k). The default service provider, the Commission, and any third party involved in the administration, review or monitoring of the procurement process, shall be subject to this confidentiality provision.
§ 54.187. Default service rates and the recovery of reasonable costs.
(a) The costs incurred for providing default service shall be recovered through the following mechanisms or charges:
(1) The generation supply charge is a nonreconcilable charge that includes all reasonable costs associated with the acquisition of generation supply, exclusive of the costs of generation supply recovered through paragraph (3), to meet default service demand. The associated costs with this charge include:
(i) The prevailing market price of energy.
(ii) The prevailing market price of RTO or ISO capacity or any similar obligation.
(iii) FERC-approved ancillary services and transmission charges.
(iv) Required RTO or ISO charges.
(v) Applicable taxes.
(vi) Other reasonable, identifiable generation supply acquisition costs.
(2) The customer charge is a nonreconcilable, fixed charge, set on a per customer class basis, that includes all identifiable, reasonable costs associated with providing default service to an average member of that class, exclusive of generation supply costs and costs recovered through paragraph (3). The associated costs with this charge include:
(i) Default service related costs for customer billing, collections, customer service, meter reading and uncollectible debt.
(ii) A reasonable return or risk component for the default service provider.
(iii) Applicable taxes.
(iv) Other reasonable and identifiable administrative or regulatory expenses.
(3) A default service provider shall use an automatic energy adjustment clause, consistent with 66 Pa.C.S. § 1307 (relating to sliding scale of rates; adjustments) to recover reasonable costs incurred through compliance with the Alternative Energy Portfolio Standards Act (73 P. S. §§ 1647.1--1647.7).
(4) The costs recovered through the preceding charges and mechanisms may not be recovered by an EDC acting as a default service provider through its Commission approved distribution rates.
(b) A default service plan must include a fixed rate option for all residential customers.
(c) A default service implementation plan must include a fixed rate option for nonresidential default service customers whose load test indicates a registered peak demand of 500 or less kilowatts.
(d) The default service provider shall include an hourly rate in its implementation plan for all default service customers whose load test indicates a registered peak demand of greater than 500 kilowatts. The default service provider may propose a fixed rate for these customers in its default service implementation plan.
(e) The rate for hourly priced service shall include:
(1) The RTO's or ISO's LMP or the equivalent pricing mechanism.
(2) The prevailing market price of RTO or ISO capacity or any similar obligation.
(3) FERC-approved ancillary services and transmission charges.
(4) Required RTO or ISO charges.
(5) Applicable taxes.
(6) Other FERC-approved or reasonable, identifiable RTO or ISO charges and costs directly related to the hourly priced service.
(7) Other reasonable and identifiable administrative or regulatory expenses.
(f) The default service implementation plan must include rates that correspond to demand side response and demand side management programs available to retail customers in that EDC service territory.
(g) The default service implementation plan may include mechanisms that allow default service providers to adjust their prices during the term of service to recover reasonable, incremental costs of significant changes in the number of default service customers or reasonable, incremental costs of other events that would materially prejudice the reliable provision of default service and the full recovery of reasonable costs.
(h) The default service provider's projected and actual incurred costs for providing service may not be subject to Commission review and reconciliation except in extraordinary circumstances, or as provided in subsection (a)(3).
(i) When a generation supplier fails to deliver generation supply to a default service provider, the default service provider shall be responsible for acquiring replacement generation supply consistent with its Commission- approved replacement procurement process. When necessary to procure electric generation supply before the completion of the replacement procurement process, a default service provider shall acquire supply at prevailing market prices and shall fully recover reasonable costs associated with this activity. In this circumstance, the prevailing market price will be the price of electricity in the RTO or ISO's administered energy markets in whose control area the default service is being provided. The default service provider shall follow acquisition strategies that reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies), when selecting from the various options available in these energy markets.
§ 54.188. Commission review of default service implementation plans.
(a) A default service implementation plan shall initially be referred to the Office of Administrative Law Judge for further proceedings as may be required.
(b) The Commission will issue an order within 6 months of a plan's filing with the Commission on whether the default service implementation plan demonstrates compliance with this subchapter and 66 Pa.C.S. §§ 2801--2812 (relating to Electricity Generation Customer Choice and Competition Act). The Commission may order modification of the terms of the proposed plan to ensure that a default service plan is compliant.
(c) The Commission will evaluate the default service implementation plan to ensure that it includes a fair, transparent and nondiscriminatory competitive procurement process for all potential suppliers provided under § 54.186 (relating to default service supply procurement).
(d) Upon entry of the Commission's final order, the default service provider shall acquire generation supply for the term of service in a manner consistent with the terms of the approved competitive procurement process provided under § 54.186, and report the bids submitted by EGSs in writing to the Commission.
(e) The Commission will certify the results of a competitive procurement process in their entirety or reject them due to noncompliance with the approved procurement process. If the Commission rejects the results due to noncompliance, the default service provider shall repeat the approved competitive procurement process. When necessary to procure electric generation supply before the completion of the subsequent competitive procurement process, a default service provider shall acquire supply at prevailing market prices and shall fully recover reasonable costs associated with this activity. In this circumstance, the prevailing market price will be the price of electricity in the RTO or ISO's administered energy markets in whose control area that service is being provided. The default service provider shall follow acquisition strategies that reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. § 2807(e)(3) (relating to duties of electric distribution companies), when selecting from the various options available in these energy markets.
(f) Upon completion of the competitive procurement process, the default service provider shall provide written notice to default service customers and the named parties identified in § 54.185(b) (relating to default service implementation plans and terms of service) of the Commission-certified default service prices and terms and conditions of service no later than 60 days before their effective date, unless another time period is approved by the Commission. The default service provider shall also provide written notice to the named parties identified in § 54.185(b) containing an explanation of the methodology used to calculate the price for electric service.
(g) A default service provider may petition for a waiver of any part of this subchapter, in a manner consistent with § 5.43 (relating to petitions for issuance, amendment or waiver of regulations). The Commission may grant waivers of this subchapter to ensure the reliable provision of default service and to enforce and carry out the provisions of 66 Pa.C.S. §§ 2801--2812 and other applicable laws.
§ 54.189. Default service customers.
(a) At the conclusion of an EDC's Commission-approved generation rate cap, retail customers who are not receiving generation service from an EGS shall be assigned to the Commission-approved default service implementation plan.
(b) A default service provider shall accept applications for default service from new retail customers and retail customers who switch from an EGS, if the customers comply with all Commission regulations pertaining to applications for service.
(c) A default service provider shall treat a customer who leaves an EGS and applies for default service as it would a new applicant for default service.
(d) A default service customer may choose to receive its generation service from an EGS at any time, if the customer complies with Commission-regulations pertaining to changing generation service providers.
(e) A default service provider may not charge a fee to a retail customer that changes its generation service provider in a manner consistent with Commission regulations.
CHAPTER 57. ELECTRIC SERVICE
Subchapter M. STANDARDS FOR CHANGING A CUSTOMER'S ELECTRIC GENERATION SUPPLIER § 57.178. [Provider of last resort] Default service provider.
This subchapter does not apply when the customer's service is discontinued by the EGS and subsequently provided by the [provider of last resort] default service provider because no other EGS is willing to provide service to the customer.
______
1 The term ''provider of last resort'' appears in the customer choice and electric service context of the Commission's regulations at 52 Pa. Code §§ 54. 4(b), 54.5(b)(3), 54.5(c)(9), 54.5(h), 54.6, 54.31, 54.32(h), 54.41(b) and 57.178. Annex A includes revisions of these sections to provide for consistent terminology.
2 Citizen's current POLR plan will expire on December 31, 2004. UGI's current POLR plan is effective through December 31, 2005. Pike County's current POLR plan is effective through December 31, 2005. Duquesne's recently approved POLR plan expires on December 31, 2007. Wellsboro's current POLR plan does not have a definitive expiration date and the Commission will require that Wellsboro file a default service plan for a term of service commencing on January 1 of the year following the year of effective date of these proposed regulations. The remaining generation rate caps include Allegheny Power, December 31, 2008; PPL Electric Utilities Corp., December 31, 2009; PECO Energy Company, December 31, 2010; Metropolitan Edison Company, December 31, 2010; Pennsylvania Electric Company, December 31, 2010.
3 The Commission is aware that the initial terms of service for default service plans filed under this regulation may need to be longer, given our directive that plans be aligned with the RTO's planning year. For example, PJM Interconnection's planning year commences on June 1. As the Commission approved rate caps all expire on December 31, the initial service plans for those EDCs in PJM's control area will need to have terms of at least 17 months.
4 52 Pa. Code § 54.121 et seq.
5 Standards for Changing A Customer's Electricity Generation Suppler. 52 Pa. Code § 57.171 et seq.
[Pa.B. Doc. No. 05-359. Filed for public inspection February 25, 2005, 9:00 a.m.]
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