PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held April 15, 2010
Commissioners Present:
James H. Cawley, Chairman
Tyrone J. Christy, Vice Chairman, Dissenting
Wayne E. Gardner
Robert F. Powelson
PPL Electric Utilities Corporation Retail Markets / Docket Number:
M-2009-2104271
OPINION AND ORDER
BY THE COMMISSION:
By Tentative Order entered at this Docket on May 15, 2009, the Commission addressed a number of actions that PPL Electric Utilities Corporation (“PPL”) should implement when its generation rate cap expired at the end of 2009. These actions were designed to minimize barriers to retail competition in PPL’s service territory pursuant to our authority under the Electricity Generation Customer Choice and Competition Act (Competition Act), 66 Pa. C.S. §§ 2801-2812. The adoption of a statewide Rate Ready billing option was addressed, which would require PPL to add that option to the implementation of Bill Ready billing. (Tentative Order, May 15, 2009, p. 13)
In our final Opinion and Order at this Docket, entered August 11, 2009, we reiterated that Rate Ready billing promotes competition and we directed PPL to lead a sub-team of the Electronic Data Exchange Working Group (“EDEWG”) to develop a process and timeline for implementation of Bill Ready and Rate Ready billing statewide. (Opinion and Order, entered August 11, 2009, p. 20) We referred other market transition issues to the Retail Markets Working Group (“RMWG”) for discussion and reporting. (Opinion and Order, entered August11, 2009, Ordering paragraph 5, p. 34) These issues included customer referral programs, provisions for billing services not covered by purchase of receivables programs, and customer shopping education efforts by Electric Distribution Companies (“EDCs”) and the Commission.
Background
“Bill Ready” means the company doing the billing receives calculated results from the non-billing party for its charges for printing on a consolidated bill. “Rate Ready” means the company doing the billing knows the rates of the other party, calculates its charges, and prints these charges on a consolidated bill. (Electronic Data Exchange Standards for Electric Deregulation in the Commonwealth of Pennsylvania Revised Plan v2.6, p. 13)
EDCs offer either Rate Ready or Bill Ready as a single billing option. One or two EDCs offer some form of both billing options. PPL and PECO Energy Company (“PECO”) are the only two EDCs offering Bill Ready billing exclusively. In our decision to adopt Rate Ready billing statewide, we did not want to preclude any EDC from continuing to offer Bill Ready billing if it was already being provided. (Opinion and Order, entered August 11, 2009, p. 20) To achieve a smooth transition for the industry, we directed EDEWG to consider the recommendations of the sub-team effort led by PPL and to file a plan for Rate Ready billing for final consideration and action.
(Order and Opinion, entered August 11, 2009, pp 20-21)
On September 8, 2009, PPL convened a sub-team of EDEWG (“Team”). EDC participation included Allegheny Power (West Penn Power), Duquesne Light Company, First Energy (Met-Ed, Penelec, and Penn Power), PECO, and PPL. Electric Generation Supplier (“EGS”) and Electronic Data Interchange (“EDI”) Service Provider[1] participation comprised ConEdison Solutions, Direct Energy, Dominion Retail, e:SO, ESG, FirstEnergy Solutions, Liberty Power, MXenergy Electric Inc., PPL Solutions LLC, SJ Industries, Exelon Energy, Systrends Inc., and UGI Energy Services.
The Team held regularly scheduled teleconference meetings three times per week and held three face-to-face meetings in September and October of 2009. During this time, some of the participating EGS representatives on the Team met separately and compiled a list of desirable Rate Ready business requirements. EDI Service Providers coordinated separate calls with their clients prior to Team meetings. (EDEWG Sub Team Report Regarding Rate Ready Billing, p. 2)
The Team distributed a draft document to EDEWG on November 2, 2010, for review and consideration. At its regularly scheduled monthly meeting held November 5, 2009, EDEWG discussed the document. The document was modified and finalized, and on November9, 2009, EDEWG filed its report (“EDEWG Report”) in compliance with the Commission’s directive. (EDEWG Meeting 11/5/2009 Minutes, approved EDEWG Meeting 12/3/2009)
Statement of Issues
The EDEWG Report, which is attached to this Opinion and Order, addresses three primary concerns related to the Commission’s directive. Firstly, the EDEWG Report states that the Commission set an overly aggressive timeline of 90 days to complete its task. (EDEWG Report, cover letter dated November 9, 2009) Secondly, the EDEWG Report indicates that the assigned task required EDEWG to focus on policy and business practices that are outside of their scope and mission. (EDEWG Report, cover letter dated November 9, 2009) Finally, the EDEWG Report questions whether the Commission’s directive to PPL also applied to other EDCs. (EDEWG Report, pp 1-2)
The EDEWG Report cites page 2 of the Commission’s Order entered August 11, 2009, stating that, while the Order’s directives “can form a template used by the other EDCs in the Commonwealth, [the Commission] was not mandating such use…” and accordingly, EDCs interpreted our Order as applying directly to PPL. (Report, pp 1-2) The EDEWG Report states that other EDC participants will decide, on a case-by-case basis, which aspects of the group’s findings to implement dependent upon system capabilities and pre-existing business practices. (EDEWG Report, p.1) Additionally, the EDEWG Report emphasizes that the Rate Ready solution requirements proposed for PPL and PECO are completely independent of one another, that other EDCs with existing Rate Ready programs do not intend to modify their programs as outlined in the EDEWG Report, as their participation on the Team was advisory and did not represent consensus. (EDEWG Report, p. 2)
The EDEWG Report refers to PPL and participating EGSs and EDI Service Providers as the “Consensus Group” with respect to the recommendations and plans outlined therein. (EDEWG Report, p. 1) The Team clarifies in the EDEWG Report that “it is not the intent of this document to serve as a final requirements document that outlines every action required to support a Rate Ready model for every EDC,” that the EDEWG Report “outlines the high level business practices and system functionality required to implement Rate Ready billing based on decisions reached by the Consensus Group.” (EDEWG Report, p. 1)
Additionally, the EDEWG Report includes an implementation timeline, as directed, along with a cost estimate for PPL and PECO. (EDEWG Report, pp 7-8) PPL estimates the cost of a fully automated Rate Ready billing system at $1.3 million and sets an implementation deadline ending the third quarter of 2010. (EDEWG Report, p. 7) The EDEWG Report notes that a shorter deadline for PPL to implement the Rate Ready plan would increase costs. (EDEWG Report, p. 7) PECO estimates a budget of $3.3million for an 18-month implementation time frame. (EDEWG Report, p. 8)
Disposition of Issues
In response to the first issue, we acknowledge that the timeline we set for EDEWG to complete its work was aggressive. PPL’s rate caps were soon to expire on December 31, 2010, and we had full confidence in the ability of EDEWG to work through the technical details with PPL to find a reasonable solution within this time frame.
EDEWG was concerned that our directive was outside of its scope and we agree, in part. We disagree that our directive to EDEWG was to decide policy issues. The intent of our directive was for EDEWG to focus on the technical parameters of PPL’s Rate Ready proposal for implementation statewide. We anticipated deciding this policy issue after review and consideration of the EDEWG Report. Policy discussions are not within the purview of EDEWG technical expertise. While policy issues clearly rose during EDEWG discussions as evidenced by comments within the EDEWG Report (EDEWG Report cover letter and p. 1), we can only surmise that Commission clarification of the issues was not sought due to the sense of urgency felt by EDEWG to comply with our 90-day deadline. We agree that the development of a statewide billing option requires input from all parties in a deliberate fashion.
In as much as the EDEWG Report does provide a consensus plan for PPL Rate Ready billing, we direct PPL to implement it and to adhere to its proposed deadline of September 30, 2010. Additionally, we shall refer to the RMWG the issue relating to the use of the EDEWG Report as a statewide business model. It is appropriate that the RMWG discuss this issue due to the fact that provisions for billing services not covered by purchase of receivables programs were referred to the RMWG and that Rate Ready billing belongs in this category. (Opinion and Order, entered August 11, 2009, Ordering paragraph 5, p. 34)
In developing its recommendation, the RMWG shall consider: (1) EGS business needs for a uniform approach to Rate Ready billing; and (2) EDC billing system capabilities to respond to this approach. We direct the RMWG to report to this Commission no later than 90 days of the entered date of this Order. We also direct that Commission Staff submit an independent recommendation to the Commission following its receipt and review of the RMWG report.
Regarding PPL’s proposed estimated budget of $1.3 million to implement the Rate Ready billing option, we shall deny cost recovery without prejudice at this time. We maintain our previous decision relating to PPL’s request to defer costs on its books for future recovery. (Opinion and Order, entered August 15, 2009, p. 33) As PPL begins to actually incur any costs and can estimate the magnitude and longevity of any costs, it may file to defer them for recovery. (Opinion and Order, entered August 15, 2009, p. 33) THEREFORE,
IT IS ORDERED:
1. That the EDEWG Report shall be adopted for implementation of Rate Ready billing exclusively by PPL Electric Utilities Corporation;
2. That PPL Electric Utilities Corporation is authorized to complete implementation of the Rate Ready billing option in the manner and timeline as described in the EDEWG Report;
3. That the issue relating to the use of the EDEWG Report as a statewide business model, be referred to the Retail Markets Working Group, which shall prepare a report to be submitted to the Commission within 90 days of the entry of this Order;
4. That Commission Staff prepare an independent recommendation to the Commission following receipt and review of the Retail Markets Working Group report referenced in Ordering Paragraph 3;
5. That a copy of the EDEWG Report and this Opinion and Order be served upon all Electric Distribution Companies, Electric Generation Suppliers, Small Business Advocate, Office of Consumer Advocate the Retail Markets Working Group, and the Electronic Data Exchange Working Group.
BY THE COMMISSION,
James J. McNulty
Secretary
(SEAL)
ORDER ADOPTED: April 15, 2010
ORDER ENTERED: April 19, 2010
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[1] EDI is the process of sending and receiving electronic business documents between companies. EDI is commonly used instead of faxing and mailing paper documents.