The Public Utility Commission Thursday released a summary document for its Investigation of Pennsylvania’s Retail Electricity Market designed to initiate the final phase of discussion prior to issuing a proposal for the end state of default service in the state.

The Commission voted 4-1 to make the “RMI (Retail Market Investigation) End State Proposal” available for comment and further discussions between staff from the PUC’s Office of Competitive Market Oversight and RMI stakeholders.

Staff will then develop a Tentative Order for consideration by the Commission at its Nov. 8, 2012, public meeting.  Chairman Robert F. Powelson issued a statement and video comments are available on the Commission’s website.

“The discussion document issued today reaffirms that the underlying default structure in Pennsylvania needs to be changed in order to reap the full benefits of competition,” said Chairman Robert F. Powelson.  “Intermediate changes are under way or on the horizon through the implementation of consumer education, customer referral and retail opt-in initiatives.  Our end state proposal is geared toward ensuring that Pennsylvania’s consumers will continue to receive the benefits of the competitive retail electricity market while providing the regulatory certainty the marketplace needs in order to continue growing.”

Commissioner James H. Cawley issued a dissenting statement. “It does not appear that merely changing the underlying supply portfolio will have a significant impact on encouraging most customers to shop for lower cost supply alternatives that are readily available on the Commission’s website and actively marketed daily by numerous suppliers,” said Commissioner Cawley.  “It is only by removing the barriers related to the current default service market structure that the full benefits of competitive markets can be delivered to consumers.”

Topics addressed in the discussion document include:Default service providers; Default service product; Timing of transition; Consumer protections; Low-income customers; Consolidated billing; Accelerated switching; Metering services; Energy efficiency and conservation plans; Long-term contracts; Consumer education; and Regulatory costs/assessments.

In putting forth its end state proposal, the Commission envisions electric distribution companies remaining in the default service role unless the PUC approves an alternative Default Service Provider.  If adopted in its current form, the transition would be planned to occur on June 1, 2015, following the expiration of EDC default service plans that are currently pending review/ approval by the Commission.

The Commission assured consumers that, as part of any changes to the current market structure, all consumer protections will be maintained, and that the Commission will work with EGSs and other key stakeholders to ensure consumers are kept apprised of ongoing changes.

On April 28, 2011, the Commission launched the RMI, which is being conducted in two phases.  The first phase was designed to assess the status of the current retail market and explore what changes need to be made to allow customers to fully realize the benefits of competition.

On July 28, 2011, the Commission directed the OCMO to hold technical conferences to address intermediate and long-term issues pertaining to the competitive retail electricity market and provide specific proposals for changes to the existing retail market and default service model. This second phase has examined and addressed how to best resolve the issues raised and implement the prudent changes identified based upon information gathered during the Investigation.

A copy of the Electric Retail Market Investigation End State Proposal is available online.

10/1/2012