Press Release

PUC Finalizes Default Service Program Recommendations from Retail Market Investigation to Aid Consumers with a More Competitive Market

Published on 2/14/2013

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today finalized default service program recommendations designed to ensure that the state’s regulatory framework is one that encourages a market where consumers have continued choices for electric supply.

The Commission voted 5-0 to change the default service electricity product that consumers receive, as part the Commission’s Retail Markets Investigation (RMI), which was intended to improve the state’s retail electricity market. The Commission engaged consumers, utilities, suppliers and environmentalists in its efforts to keep Pennsylvania’s retail electric market vibrant.

“These improvements will help ensure that customers are making informed decisions about their electric supply service and will continue the process of removing unreasonable barriers to a more robust and sustainable competitive electric supply market,” said PUC Chairman Robert F. Powelson and Vice Chairman John F. Coleman Jr. in a joint statement. “Moreover, these improvements build on the intermediate measures that we previously adopted in the Retail Market Investigation (RMI) to enhance the competitive market...To that end, we view today’s action as an important step in what will be an ongoing process for an even more robust and sustainable competitive electric market in Pennsylvania.”

Commissioner Pamela A. Witmer said: “Earlier this week, the Commission publicly recognized the fact that over 2 million Pennsylvania customers are now participating in the retail electricity market. That is 2 million residential and business customers who have learned that shopping for electricity can save consumers money and provide them with innovative products, and, most importantly, without disrupting the electric services we all have come to rely on from our utility.  While achieving this milestone is significant, we will need to work with the legislature to unleash the true power of the retail market.” Commissioner Witmer also issued a statement.

Commissioner James H. Cawley said in a statement: “The Commission has been moving in this direction for some time now in order to benefit both Pennsylvania default service and shopping customers.  As more and more customers migrate to the competitive market, the Commission’s policy must move in this direction to avoid very substantial premiums that will increasingly be embedded in future long term procurements.”

The PUC action and its proposed legislative changes seek to protect and enhance the retail electric market’s long-term viability. Under the action, the utility is retained as the default service provider and all consumer protections are maintained. The consumer protections include security of customer information; reporting requirements for quality of service benchmarks and standards, as well as universal service and energy conservation; standards for changing a customer’s electricity generation supplier; marketing and sales practices for the retail residential energy market; and standards and billing practices for residential utility service.

The changes are intended to provide a regulatory framework that encourages electric generation suppliers (EGSs) to invest in Pennsylvania’s retail electric market.  These changes seek to move the Commonwealth toward a more robust competitive market, in which consumers have the choice of different competitive pricing options and a variety of innovative product offerings.

On April 28, 2011, the Commission launched its retail electricity market investigation, which was 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 Office of Competitive Markets Oversight (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. The second phase examined and addressed how to best resolve the issues raised and implement the prudent changes identified based upon information gathered during the Investigation. Today’s proposal is a result of this investigation.

The Pennsylvania Public Utility Commission balances the needs of consumers and utilities to ensure safe and reliable utility service at reasonable rates; protect the public interest; educate consumers to make independent and informed utility choices; further economic development; and foster new technologies and competitive markets in an environmentally sound manner. For recent news releases, video and audio of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov.

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Docket No. I-2011-2237952

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