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 programs and periods of service.
54.186.    Default service procurement and implementation plans.
54.187.    Default service rate design and the recovery of reasonable costs.
54.188.    Commission review of default service programs and rates.
54.189.    Default service customers.
54.190.    Universal interest applicable to over collections and under collections resulting from reconciliation of automatic adjustment clauses costs and revenues related to electric default service.

Authority

   The provisions of this Subchapter G issued and amended under the Electricity Generation Customer Choice and Competition Act, 66 Pa.C.S. §  2807, unless otherwise noted.

Source

   The provisions of this Subchapter G adopted September 14, 2007, effective September 15, 2007, 37 Pa.B. 4996, unless otherwise noted.

Cross References

   This Subchapter G cited in 52 Pa. Code §  69.1802 (relating to purpose).

§ 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. This subchapter ensures 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 procured by a DSP pursuant to a Commission-approved competitive procurement plan. The EDC or other approved entity shall fully recover all reasonable costs for acting as a default service provider of electric generation supply to all retail customers in its certificated distribution territory.

Source

   The provisions of this §  54.181 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial page (330066).

§ 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 by EDCs and EGSs be derived from alternative energy sources, as defined in the Alternative Energy Portfolio Standards Act (73 P. S. § §  1648.1—1648.8).

   Bilateral contract—The term as defined in 66 Pa.C.S. §  2803 (relating to definitions).

   Commission—The Pennsylvania Public Utility Commission.

   Competitive bid solicitation process—A fair, transparent and nondiscriminatory process by which a default service provider awards contracts for electric generation supply to qualified suppliers who submit the lowest bids.

   DSP—Default service provider—The term as defined in 66 Pa.C.S. §  2803.

   Default service—Electric generation supply service provided pursuant to a default service program to a retail electric customer not receiving service from an EGS.

   Default service implementation plan—The schedule of competitive bid solicitations and spot market energy purchases, technical requirements and related forms and agreements.

   Default service procurement plan—The electric generation supply acquisition strategy a DSP will use in satisfying its default service obligations, including the manner of compliance with the alternative energy portfolio standards requirement.

   Default service program—A filing submitted to the Commission by a DSP that identifies a procurement plan, an implementation plan, a rate design to recover all reasonable costs and other elements identified in §  54.185 (relating to default service programs and periods of service).

   Default service rate—The rate billed to a default service customer resulting from compliance with a Commission-approved default service program.

   EDC—Electric distribution company—The term has the same meaning as defined in 66 Pa.C.S. §  2803.

   EGS—Electric generation supplier—The term has the same meaning as defined in 66 Pa.C.S. §  2803.

   FERC—The Federal Energy Regulatory Commission.

   Maximum registered peak load—The highest level of demand for a particular customer, based on the PJM Interconnection, LLC, ‘‘Peak Load Contribution Standard,’’ or its equivalent, and as may be further defined by the EDC tariff in a particular service territory.

   PTC—Price-to-compare—A line item that appears on a retail customer’s monthly bill for default service. The PTC is equal to the sum of all unbundled generation and transmission related charges to a default service customer for that month of service.

   RTO—Regional transmission organization—A FERC-approved regional transmission organization.

   Retail customer or retail electric customer—These terms have the same meaning as defined in 66 Pa.C.S. §  2803.

   Spot market energy purchase—The purchase of an electric generation supply product in a FERC-approved real time or day ahead energy market.

Source

   The provisions of this §  54.182 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial pages (330067) to (330068).

Cross References

   This section cited in 52 Pa. Code §  54.123 (relating to transfer of customers to default service).

§ 54.183. Default service provider.

 (a)  The DSP shall be the incumbent EDC in each certificated service territory, except as provided for under subsection (b).

 (b)  The DSP may be changed by one of the following processes:

   (1)  An EDC may petition the Commission to be relieved of the default service obligation.

   (2)  An EGS may petition the Commission to be assigned the default service role for a particular EDC service territory.

   (3)  The Commission may propose through its own motion that an EDC be relieved of the default service obligation.

 (c)  The Commission may reassign the default service obligation for the entire service territory, or for specific customer classes, to one or more alternative DSPs when it finds it to be necessary for the accommodation, safety and convenience of the public. A finding would include an evaluation of the incumbent EDC’s operational and financial fitness to serve retail customers, and its ability to provide default service under reasonable rates and conditions. In these circumstances, the Commission will announce, through an order, a competitive process to determine the alternative DSP.

 (d)  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)  An entity that wishes to be considered for the role of the alternative DSP shall file a petition under 66 Pa.C.S. §  2807(e)(3) (relating to duties of electric distribution companies).

   (2)  Petitioners 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 petitioner can meet this standard, the incumbent EDC shall be required to continue the provision of default service.

   (4)  If one or more petitioners meets the standard provided in paragraph (2), the Commission will approve the DSP best able to fulfill the obligation in a safe, cost-effective and efficient manner, consistent with 66 Pa.C.S. § §  1103 and 1501 (relating to procedure to obtain certificates of public convenience; and character of service and facilities) and 2807(e).

   (5)  A petitioner approved to act as an alternative DSP shall comply with applicable provisions of the code, regulations and conditions imposed in approving the petition to act as an alternative DSP.

§ 54.184. Default service provider obligations.

 (a)  While an EDC collects either a competitive transition charge or an intangible transition charge or until 100% of an EDC’s customers have electric choice, whichever is longer, an EDC as 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 or whose alternative EGS has failed to deliver electric energy.

 (b)  A DSP shall comply with the code and Chapter 1 (relating to rules of administrative practice and procedure) to the extent that the obligations are not modified by this subchapter or waived under §  5.43 (relating to petitions for issuance, amendment, repeal or waiver of regulations).

 (c)  Following the expiration of an EDC’s obligation to provide electric generation supply service to retail customers at capped rates, if a customer contracts for electric generation supply service and the chosen EGS does not provide the service, or if a customer does not choose an alternative EGS, the default service provider shall provide electric generation supply service to that customer pursuant to a Commission-approved competitive procurement process that includes one or more of the following:

   (1)  Auctions.

   (2)  Requests for proposals.

   (3)  Bilateral agreements entered into at the sole discretion of the default service provider which shall be at prices that are either of the following:

     (i)   No greater than the cost of obtaining generation under comparable terms in the wholesale market, as determined by the Commission at the time of execution of the contract.

     (ii)   Consistent with a Commission-approved competition procurement process. Agreements between affiliated parties, including bilateral agreements between electric utilities and affiliated generators, shall be subject to review and approval of the Commission under 66 Pa.C.S. § §  2101—2107 (relating to relations with affiliated interests). The cost of obtaining generation from any affiliated interest may not be greater than the cost of obtaining generation under comparable terms in the wholesale market at the time of execution of the contract.

 (d)  A DSP shall continue the universal service and energy conservation program in effect in the EDC’s certificated service territory or implement, subject to Commission approval, similar programs consistent with 66 Pa.C.S. § §  2801—2815 (relating to Electricity Generation Customer Choice and Competition Act) and the amendments provided under the act of October 15, 2008 (P. L. 1592, No. 129) providing for energy efficiency and conservation programs. The Commission will determine the allocation of these responsibilities between an EDC and an alternative DSP when an EDC is relieved of its DSP obligation.

Source

   The provisions of this §  54.184 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial page (330069).

Cross References

   This section cited in 52 Pa. Code §  54.186 (relating to default service procurement and implementation plans).

§ 54.185. Default service programs and periods of service.

 (a)  A DSP shall file a default service program with the Commission’s Secretary’s Bureau no later than 12 months prior to the conclusion of the currently effective default service program or Commission-approved generation rate cap for that particular EDC service territory, unless the Commission authorizes another filing date. Thereafter, the DSP shall file its programs consistent with schedules identified by the Commission.

 (b)  The Commission will hold hearings as necessary on the proposed plan or amended plan. If the Commission fails to issue a final order on the plan or amended plan within 9 months of the date that the plan is filed, the plan or amended plan will be deemed to be approved and the default service provider may implement the plan or amended plan as filed. Costs incurred through an approved competitive procurement plan shall be deemed to be the least cost over time.

 (c)  Default service programs must comply with Commission regulations pertaining to documentary filings in Chapter 1 (relating to rules of administrative practice and procedure), except when modified by this subchapter. The DSP shall serve copies of the default service program on the Pennsylvania Office of Consumer Advocate, Pennsylvania Office of Small Business Advocate, the Commission’s Office of Trial Staff, EGSs registered in the service territory and the RTO or other entity in whose control area the DSP is operating. Copies shall be provided upon request to other EGSs and shall be available at the DSP’s public internet domain.

 (d)  The first default service program shall be for a period of 2 to 3 years, or for a period necessary to comply with subsection (e)(4), unless another period is authorized by the Commission. Subsequent program terms will be determined by the Commission.

 (e)  A default service program must include the following elements:

   (1)  A procurement plan identifying the DSP’s electric generation supply acquisition strategy for the period of service. The procurement plan should identify the means of satisfying the minimum portfolio requirements of the Alternative Energy Portfolio Standards Act (73 P. S. § §  1648.1—1648.8) for the period of service.

   (2)  An implementation plan identifying the schedules and technical requirements of competitive bid solicitations and spot market energy purchases, consistent with §  54.186 (relating to default service procurement and implementation plans).

   (3)  A rate design plan recovering all reasonable costs of default service, including a schedule of rates, rules and conditions of default service in the form of proposed revisions to its tariff.

   (4)  Documentation that the program is consistent with the legal and technical requirements pertaining to the generation, sale and transmission of electricity of the RTO or other entity in whose control area the DSP is providing service. The default service procurement plan’s period of service must align with the planning period of that RTO or other entity.

   (5)  Contingency plans to ensure the reliable provision of default service when a wholesale generation supplier fails to meet its contractual obligations.

   (6)  Copies of agreements or forms to be used in the procurement of electric generation supply for default service customers. This includes all documents used as part of the implementation plan, including supplier master agreements, request for proposal documents, credit documents and confidentiality agreements. When applicable, the default service provider shall use standardized forms and agreements that have been approved by the Commission.

   (7)  A schedule identifying generation contracts of greater than 2 years in effect between a DSP, when it is the incumbent EDC, and retail customers in that service territory. The schedule should identify the load size and end date of the contracts. The schedule shall only be provided to the Commission and will be treated as confidential.

 (f)  The Commission may, following notice and opportunity to be heard, direct that some or all DSPs file joint default service programs to acquire electric generation supply for all of their default service customers. In the absence of such a directive, some or all DSPs may jointly file default service programs or coordinate the scheduling of competitive bid solicitations to acquire electric generation for all of their default service customers. A multiservice territory procurement and implementation plan must comply with §  54.186.

 (g)  DSPs shall include requests for waivers from the provisions of this subchapter in their default service program filings. For DSPs with less than 50,000 retail customers, the Commission will grant waivers to the extent necessary to reduce the regulatory, financial or technical burden on the DSP or to the extent otherwise in the public interest.

Source

   The provisions of this §  54.185 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial pages (330069) to (330071).

Cross References

   This section cited in 52 Pa. Code §  54.182 (relating to definitions); 52 Pa. Code §  54.186 (relating to default service procurement and implementation plans); 52 Pa. Code §  54.188 (relating to commission review of default services programs and rates); and 52 Pa. Code §  69.1803 (relating to definitions).

§ 54.186. Default service procurement and implementation plans.

 (a)  A DSP shall acquire electric generation supply at the least cost to customers over time for default service customers in a manner consistent with procurement and implementation plans approved by the Commission.

 (b)  A DSP’s procurement plan must adhere to the following standards:

   (1)  The procurement plan shall be designed so that the electric power procured under §  54.184(c) (relating to default service provider obligations) includes a prudent mix of the following:

     (i)   Spot market purchases.

     (ii)   Short-term contracts.

     (iii)   Long-term purchase contracts, entered into as a result of auction, request for proposal or bilateral contract that is free of undue influence, duress or favoritism of greater than 4 years in length but not greater than 20 years. The default service provider shall have sole discretion to determine the source and fuel type. Long-term purchase contracts must be 25% or less of the DSP’s projected default service load unless the Commission, after a hearing, determines for good cause that a greater portion of load is necessary to achieve least cost procurement.

       (A)   EDCs or Commission-approved alternative suppliers may offer large customers with a peak demand of 15 megawatts or greater at one meter at a location in its service territory any negotiated rate for service at all of the customers’ locations within the service territory for any duration agreed upon by the EDC or alternative supplier and the large customer.

       (B)   The Commission may determine that a contract is required to be extended for longer than 20 years if the extension is necessary to ensure adequate and reliable service at least cost to customers over time.

   (2)  A prudent mix of contracts shall be designed to ensure:

     (i)   Adequate and reliable service.

     (ii)   The least cost to customers over time.

     (iii)   Compliance with the requirements of paragraph (1).

   (3)  DSPs with loads of 50 megawatts or less shall evaluate the cost and benefits of joining with other DSPs or affiliates in contracting for electric supply.

   (4)  Procurement plans may include solicitations and contracts whose duration extends beyond the program period.

   (5)  Electric generation supply shall be acquired by competitive bid solicitation processes, spot market energy purchases, short- and long-term contracts, auctions, bilateral contracts or a combination of them.

   (6)  The DSP’s supplier affiliate may participate in a competitive bid solicitation process used as part of the procurement plan subject to the following conditions:

     (i)   The DSP shall propose and implement protocols to ensure that its supplier affiliate does not receive an advantage in the solicitation and evaluation of competitive bids or other aspect of the implementation plan.

     (ii)   The competitive bid solicitation process shall comply with the codes of conduct promulgated by the Commission in §  54.122 (relating to code of conduct).

 (c)  A DSP’s implementation plan must adhere to the following standards:

   (1)  A competitive bid solicitation process used as part of the default service implementation plan must provide, to the extent applicable and at the appropriate time, the following information to suppliers:

     (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)   A time period during which the power will need to be supplied for each power supply product.

     (v)   Bid submission instructions and format.

     (vi)   Price-determinative bid evaluation criteria.

     (vii)   Current load data for rate schedules or maximum registered peak load groupings, including the following:

       (A)   Hourly usage data.

       (B)   Number of retail customers.

       (C)   Capacity peak load contribution figures.

       (D)   Historical monthly retention figures.

       (E)   Estimated loss factors.

       (F)   Customer size distribution.

   (2)  The default service implementation plan must include fair and nondiscriminatory bidder qualification requirements, including financial and operational qualifications, or other reasonable assurances of a supplier of electric generation services’ ability to perform.

   (3)  A competitive bid solicitation process used as part of the implementation plan will be subject to monitoring by the Commission or an independent third party evaluator selected by the DSP in consultation with the Commission. A third party evaluator shall operate at the direction of the Commission. Commission staff and a third party evaluator involved in monitoring the procurement process shall have full access to all information pertaining to the competitive procurement process, either remotely or where the process is administered. A third party evaluator retained for purposes of monitoring the competitive procurement process shall be subject to confidentiality agreements identified in §  54.185(e)(6) (relating to default service programs and periods of service).

   (4)  The DSP or third party evaluator shall review and select winning bids procured through a competitive bid solicitation process in a nondiscriminatory manner based on the price determinative bid evaluation criteria set forth consistent with paragraph (1)(vi).

   (5)  The bids submitted by a supplier in response to a competitive bid solicitation process shall be treated as confidential pursuant to the confidentiality agreement approved by the Commission under §  54.185(e)(6). The DSP, the Commission and a third party involved in the administration, review or monitoring of the bid solicitation process shall be subject to this confidentiality provision.

 (d)  The DSP may petition for modifications to the approved procurement and implementation plans when material changes in wholesale energy markets occur to ensure the acquisition of sufficient supply at the least cost to customers over time. The DSP shall monitor changes in wholesale energy markets to ensure that its procurement plan continues to reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. §  2807(e)(3.1)—(3.4) (relating to duties of electric distribution companies).

 (e)  At the time the Commission evaluates the plan and prior to its approval, in determining if the DSP’s plan obtains generation supply at the least cost, the Commission will consider the DSP’s obligation to provide adequate and reliable service to customers and that the DSP has obtained a prudent mix of contracts to obtain least cost on a long-term, short-term and spot market basis. The Commission will make specific findings which include the following:

   (1)  The DSP’s plan includes prudent steps necessary to negotiate favorable generation supply contracts through a competitive procurement process.

   (2)  The DSP’s plan includes prudent steps necessary to obtain least cost generation supply contracts on a long-term, short-term and spot market basis.

   (3)  Neither the DSP nor its affiliated interest has withheld from the market any generation supply in a manner that violates Federal law.

Source

   The provisions of this §  54.186 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial pages (330071) to (330072) and (340965).

Cross References

   This section cited in 52 Pa. Code §  54.185 (relating to default service programs and periods of service); and 52 Pa. Code §  54.188 (relating to commission review of default service programs and rates).

§ 54.187. Default service rate design and the recovery of reasonable costs.

 (a)  The Commission may modify contracts or disallow costs when after a hearing the party seeking recovery of the costs of a procurement plan is found to be at fault for either of the following:

   (1)  Not complying with the Commission-approved procurement plan.

   (2)  The commission of fraud, collusion or market manipulation with regard to these contracts.

 (b)  The costs incurred for providing default service shall be recovered on a full and current basis through a reconcilable automatic adjustment clause under 66 Pa.C.S. §  1307 (relating to sliding scale of rates; adjustments), all reasonable costs incurred under 66 Pa.C.S. §  2807(e)(3.9) (relating to duties of electric distribution companies) and a Commission-approved competitive procurement plan. The use of an automatic adjustment clause shall be subject to audit and annual review, consistent with 66 Pa.C.S. §  1307(d) and (e).

 (c)  Except for rates available consistent with §  54.190 (relating to universal interest applicable to over collections and under collections resulting from reconciliation of automatic adjustment clauses costs and revenues related to electric default service), a default service customer shall be offered a single rate option, which shall be identified as the PTC and displayed as a separate line item on a customer’s monthly bill.

 (d)  The rates charged for default service may not decline with the increase in kilowatt hours of electricity used by a default service customer in a billing period.

 (e)  The PTC shall be designed to recover all default service costs, including generation, transmission and other default service cost elements, incurred in serving the average member of a customer class. An EDC’s default service costs may not be recovered through the distribution rate. Costs currently recovered through the distribution rate, which are reallocated to the default service rate, may not be recovered through the distribution rate. The distribution rate shall be reduced to reflect costs reallocated to the default service rate.

 (f)  A DSP shall use an automatic energy adjustment clause, consistent with 66 Pa.C.S. §  1307 and Chapter 75 (relating to alternative energy portfolio standards), to recover all reasonable costs incurred through compliance with the Alternative Energy Portfolio Standards Act (73 P. S. § §  1648.1—1648.8). The use of an automatic adjustment clause shall be subject to audit and annual review, consistent with 66 Pa.C.S. §  1307(d) and (e), regarding fuel cost adjustment audits and automatic adjustment reports and proceedings.

 (g)  The default service rate schedule must include rates that correspond to demand side response and demand side management programs, as defined in section 2 of the Alternative Energy Portfolio Standards Act (73 P. S. §  1648.2), when the Commission mandates these rates pursuant to its authority under 66 Pa.C.S. Chapter 1 (relating to general provisions).

 (h)  Default service rates may not be adjusted more frequently than on a quarterly basis for all customer classes with a maximum registered peak load up to 25 kW, to ensure the recovery of costs reasonably incurred in acquiring electricity at the least cost to customers over time. DSPs may propose alternative divisions of customers by maximum registered peak load to preserve existing customer classes.

 (i)  Default service rates shall be adjusted on a quarterly basis, or more frequently, for all customer classes with a maximum registered peak load of 25 kW to 500 kW, to ensure the recovery of costs reasonably incurred in acquiring electricity at the least cost to customers over time. DSPs may propose alternative divisions of customers by maximum registered peak load to preserve existing customer classes.

 (j)  Default service rates shall be adjusted on a monthly basis, or more frequently, for all customer classes with a registered peak load of equal to or greater than 500 kW to ensure the recovery of costs reasonably incurred in acquiring electricity at the least cost to customers over time. DSPs may propose alternative divisions of customers by registered peak load to preserve existing customer classes.

 (k)  When a supplier fails to deliver electric generation supply to a DSP, the DSP shall be responsible for acquiring replacement electric generation supply consistent with its Commission-approved contingency plan. When necessary to procure electric generation supply before the implementation of a contingency plan, a DSP shall acquire supply at the least cost to customers over time and fully recover all reasonable costs associated with this activity that are not otherwise recovered through its contract terms with the default supplier. The DSP shall follow acquisition strategies that reflect the incurrence of reasonable costs, consistent with 66 Pa.C.S. §  2807, when selecting from the various options available in these energy markets.

Source

   The provisions of this §  54.187 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185; amended December 18, 2015, effective December 19, 2015, 45 Pa.B. 7161. Immediately preceding text appears at serial pages (362997) to (362999).

Cross References

   This section cited in 52 Pa. Code §  54.188 (relating to commission review of default service programs and rates); 52 Pa. Code §  54.190 (relating to universal interest applicable to over collections and under collections resulting from reconciliation of automatic adjustment clauses costs and revenues related to electric default service); and 52 Pa. Code §  75.67 (relating to alternative energy cost-recovery).

§ 54.188. Commission review of default service programs and rates.

 (a)  A DSP shall file a plan or amended plan for competitive procurement with the Commission and obtain Commission approval of the plan or amended plan considering the standards in 66 Pa.C.S. §  2807(e)(3.1), (3.2), (3.3) and (3.4) (relating to duties of electric distribution companies) before the competitive process is implemented. The Commission will hold hearings as necessary on the proposed plan or amended plan. A default service program will initially be referred to the Office of Administrative Law Judge for further proceedings as may be required.

 (b)  If the Commission fails to issue a final order on the plan or amended plan within 9 months of the date the plan or amended plan is filed, the plan or amended plan will be deemed approved and the DSP may implement the plan or amended plan as filed. Costs incurred through an approved competitive procurement plan will be deemed to be the least cost over time as required under 66 Pa.C.S. §  2807(e)(3.4)(ii).

 (c)  Upon entry of the Commission’s final order, a DSP shall acquire generation supply for the period of service in a manner consistent with the terms of the approved procurement and implementation plans and consistent with the standards identified in §  54.186 (relating to default service procurement and implementation plans).

 (d)  The Commission may initiate an investigation regarding implementation of the DSP’s default service program and, at the conclusion of the investigation, order remedies as may be lawful and appropriate. The Commission will not deny the DSP the recovery of its reasonable costs for purchases made pursuant to an approved competitive procurement process unless the DSP concealed or misled the Commission regarding its adherence to the program, or otherwise violated the provisions of this subchapter or the code. Except as provided under the Alternative Energy Portfolio Standards Act (73 P. S. § §  1648.1—1648.8), the Commission may not order a DSP to procure power from a specific generation supplier, from a specific generation fuel type or from new generation only. At the time the Commission evaluates the plan and prior to approval, the Commission will consider the default service provider’s obligation to provide adequate and reliable service to customers and that the DSP has obtained a prudent mix of contracts to obtain least cost on a long-term, short-term and spot market basis. The Commission will make specific findings which include:

   (1)  The DSP’s plan includes prudent steps necessary to negotiate favorable generation supply contracts through a competitive procurement process.

   (2)  The DSP’s plan includes prudent steps necessary to obtain least cost generation supply contracts on a long-term, short-term and spot market basis.

   (3)  Neither the DSP nor its affiliated interest has withheld from the market any generation supply in a manner that violates Federal law.

 (e)  A DSP shall adhere to the following procedures in obtaining approval of default service rates and providing notice to default service customers:

   (1)  A DSP shall provide all customers notice of the filing of a default service program in a similar manner as found in §  53.68 (relating to notice requirements).

   (2)  A DSP shall provide all customers notice of the initial default service rates and terms and conditions of service 60 days before their effective date, or 30 days after bidding has concluded, whichever is sooner, unless another time period is approved by the Commission. The DSP shall provide written notice to the named parties identified in §  54.185(b) (relating to default service programs and periods of service) containing an explanation of the methodology used to calculate the price for electric service.

   (3)  After the initial steps of a default service procurement and implementation plan are completed, the DSP shall file with the Commission tariff supplements designed to reflect, for each customer class, the rates to be charged for default service. The tariff supplements shall be accompanied by supporting documentation adequate to demonstrate adherence to the procurement plan approved by the Commission, the procurement plan results and the translation of those results into customer rates.

   (4)  A customer or party identified in §  54.185(b) may file exceptions to the initial default service tariffs within 20 days of the date the tariffs are filed with the Commission. The exceptions shall be limited to whether the DSP properly implemented the procurement plan approved by the Commission and accurately calculated the rates. The Commission will resolve filed exceptions by order. The Commission may allow the default rates to become effective pending the resolution of those exceptions.

 (f)  A DSP may not submit tariff supplements more frequently than on a quarterly basis, consistent with §  54.187(h) and (i) (relating to default service rate design and recovery of reasonable costs), to revise default service rates to ensure the recovery of costs reasonably incurred in acquiring electricity at the least cost to customers over time. The DSP shall provide written notice to the named parties identified in §  54.185(b) of the proposed rates at the time of the tariff filings. The tariff supplements shall be posted to the DSP’s web site at the time they are filed with the Commission. A customer or the parties identified in §  54.185(b) may file exceptions to the default service tariffs within 20 days of the date the tariffs are filed with the Commission. The exceptions shall be limited to whether the DSP has properly implemented the procurement plan approved by the Commission and accurately calculated the rates. The DSP shall post the revised PTC for each customer class within 1 business day of its effective date to its web site to enable customers to make an informed decision about electric generation supply options.

 (g)  If a customer chooses an alternative supplier and subsequently desires to return to the local distribution company for generation service, the local distribution company shall treat that customer exactly as it would any new applicant for energy service.

 (h)  A DSP may, in its sole discretion, offer large customers with a peak demand of 15 megawatts or greater at one meter location in its service territory any negotiated rate for service at all of the customers’ locations within the service territory for any duration agreed upon by the DSP and the customer.

   (1)  Contract rates shall be subject to Commission review to ensure all costs are borne by the parties to the contract and no one else.

   (2)  If no costs related to the rates are borne by other customers, the Commission will approve the contract within 90 days of its filing at the Commission. If the Commission does not approve the contract within the 90-day period, it shall be deemed approved.

 (i)  The DSP shall offer residential and small business customers a generation supply service rate that may not change more frequently than on a quarterly basis. Default service rates shall be reviewed by the Commission to ensure that the costs of providing service to each customer class are not subsidized by any other class.

Source

   The provisions of this §  54.188 amended August 10, 2012, effective August 11, 2012, 42 Pa.B. 5185. Immediately preceding text appears at serial pages (340966) and (346875) to (346876).

§ 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 DSP in that service territory.

 (b)  A DSP shall accept applications for default service from new retail customers when the customers comply with Commission regulations pertaining to applications for service, including those in Chapter 56 (relating to standards and billing practices for residential utility service) and accept all retail customers assigned to its default service who switch from an EGS.

 (c)  A DSP shall treat a customer who leaves an EGS 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 all Commission regulations pertaining to changing generation service providers in Chapter 57 (relating to electric service).

 (e)  A DSP may not charge a fee to a retail customer for changing its generation service provider in a manner consistent with Commission regulations.

§ 54.190. Universal interest applicable to over collections and under collections resulting from reconciliation of automatic adjustment clauses costs and revenues related to electric default service.

 (a)  General rule. This section applies to automatic adjustment clauses related to electric default service filed with the Commission by a DSP under §  54.187(b) (relating to default service rate design and the recovery of reasonable costs).

 (b)  Definitions. The following words and terms, when used in this section, have the following meaning, unless the context clearly indicates otherwise:

 Costs—The total amount of expenses, or class of expenses incurred, which is the basis of the automatic adjustment clause.

 Over collection—The amount equal to revenues received under an automatic adjustment clause which exceeds the amount of costs incurred.

 Revenue—The total proceeds received under the automatic adjustment clause.

 Under collection—The amount equal to costs incurred under an automatic adjustment clause which exceeds the amount of revenues received.

 (c)  Interest collectible on over collections and under collections. When revenues exceed costs, the over collections shall be refunded to customers with interest. When costs exceed revenues, the under collections shall be collected from customers with interest. Interest on over collections and under collections shall be computed at the prime rate of interest for commercial banking, not to exceed the legal rate of interest, in effect on the last day of the month the over collection or under collection occurs, as reported in the Wall Street Journal. Interest shall be computed monthly from the month the over collection or under collection occurs to the effective month that the over collection is refunded or the under collection is collected.

Source

   The provisions of this §  54.190 adopted December 18, 2015, effective December 19, 2015, 45 Pa.B. 7161.

Cross References

   This section cited in 52 Pa. Code §  54.187 (relating to default service rate design and the recovery of reasonable costs).



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