UGI Utilities, Inc.—Electric Division Plan for Seamless Moves and Instant Connects [46 Pa.B. 2935]
[Saturday, June 4, 2016]Public Meeting held
May 19, 2016Commissioners Present: Gladys M. Brown, Chairperson; Andrew G. Place, Vice Chairperson; John F. Coleman, Jr.; Robert F. Powelson
UGI Utilities, Inc.—Electric Division Plan for Seamless Moves and Instant Connects; M-2014-2401126 Final Order Before the Pennsylvania Public Utility Commission (Commission) is a recommendation from the Commission's Office of Competitive Market Oversight (OCMO) approving, with modifications, the plan of UGI Utilities, Inc.—Electric Division (UGI) for implementing seamless moves and instant connects in its service territory. A seamless move is the ability of a customer's choice of supplier to move with the customer to a new address within a single service territory without interruption. Instant connect is the ability of supply service to start on ''day one'' of new utility service, without the customer first having to go on default service.
Background
By order entered on April 29, 2011, the Commission launched its Investigation of Pennsylvania's Retail Electricity Market (Electric RMI), directing OCMO to develop recommendations for improvements to ensure that a properly functioning and workable competitive retail elec-tricity market exists in Pennsylvania.1 On February 15, 2013, the Commission entered its Electric RMI Final Order (RMI Final Order).2 As part of the RMI Final Order, the Commission instructed electric distribution companies (EDCs) to submit, by the end of 2013, plans for the implementation of seamless moves and instant connects in their service territories by June 1, 2015.
Pursuant to the Commission's RMI Final Order, UGI submitted, at the above-noted docket, a compliance filing on December 20, 2013, which detailed its plan to implement seamless moves and instant connects in its service territory by June 1, 2015. Subsequent events caused the Commission to modify the implementation timelines for these new market enhancements. Specifically, on April 3, 2014, the Commission promulgated new regulations directing the EDCs to develop three-business day supplier switching timeframes.3 Implementation of the three-business day switch went into effect on December 14, 2014. The Commission acknowledged that the implementation of three-business day supplier switching required significant effort by the EDCs and that the timely development of three-business day switching was a priority over instant connects and seamless moves. As such, by means of an August 13, 2014 Secretarial Letter, the Commission permitted the EDCs to delay the development of instant connects and seamless moves if an EDC determined that developing these processes could hinder or delay the development of three-business day supplier switching.4 In response, UGI, consistent with the directive in the Secretarial Letter, informally notified OCMO by email, on August 18, 2014, that it was postponing the implementation of seamless moves and instant connects.
On March 20, 2015, the Commission issued a Secretarial Letter directing EDCs, including UGI, to file revised plans to implement seamless moves and instant connects by July 1, 2016.5 EDCs, in their plans, were directed to demonstrate how they will achieve seamless moves and instant connects and their timeframes for implementation to meet a July 1, 2016 implementation deadline. Each plan was also to include an estimate of the costs to design, test, implement and maintain seamless moves and instant connects, and proposals for the recovery of those costs. This Secretarial Letter also provided a 30-day comment period for responses to the filed plans. The Commission then committed to review the plans and comments to determine appropriate further actions with regard to the filed plans.
On April 20, 2015, UGI filed, at the above-noted docket, a revised plan to implement seamless moves and instant connects by July 1, 2016. The Office of Consumer Advocate (OCA), on May 28, 2015, submitted comments regarding UGI's revised plan.
UGI's Plan
UGI's plan includes eligibility requirements, procedures, timelines, cost estimates and cost recovery proposals.
Seamless Moves
For seamless moves, UGI proposes to allow eligible shopping customers to retain their current electric generation supplier (EGS) when moving within UGI's service territory provided that the customer meets each of the following criteria:
• Customer is identified as a UGI Choice customer.
• Customer is currently enrolled with an EGS at his/her old location and moving within the UGI service territory.
• Customers establishing a new account/location must be in the same rate class as the previous account/location. The following chart lists the eligible UGI customer rate schedules:
Customer
GroupRate Description Residential R Residential Service RTU Residential—Time of Use C&I CWH Controlled Off-Peak Water Heating GS-1 General Service—Demand less than 5 kilowatts (kW) and consumption less than 15,000 kilowatt-hours (kWh) GS-5 General Service—Volunteer Fire Company, Non-Profit Senior Center, Non-Profit Rescue Squad and Non-Profit Ambulance Service UGI provides a flowchart outlining its proposed process for seamless moves. See Attachment A.
Instant Connects
For instant connects, UGI proposes to allow eligible shopping customers to obtain service from a chosen EGS when moving into UGI's service territory provided that the customer signs up for Choice and is in one of the following eligible UGI customer rate schedules:
Customer
GroupRate Description Residential R Residential Service RTU Residential—Time of Use C&I CWH Controlled Off-Peak Water Heating GS-1 General Service—Demand less than 5 kilowatts (kW) and consumption less than 15,000 kilowatt-hours (kWh) GS-5 General Service—Volunteer Fire Company, Non-Profit Senior Center, Non-Profit Rescue Squad and Non-Profit Ambulance Service UGI provides a flowchart outlining its proposed process for instant connects. See Attachment B.
Cost and Cost Recovery
UGI estimates that the cost for changes to its legacy Customer Information System (CIS) to accommodate seamless moves and instant connects is approximately $85,000. UGI notes that it is in the process of replacing its legacy CIS and, therefore, there will likely be additional incremental costs to configure the new CIS to accommodate seamless move and instant connect functionalities. UGI states that it reserves the right to petition for full cost recovery at a later date or to propose recovery of costs in a future base rate proceeding.
Timeline
UGI estimates that it will take approximately 26 weeks to implement system changes to facilitate seamless moves and instant connects. UGI provides the following chart which represents its high-level project schedule:
Month 16-Jan 16-Feb 16-Mar 16-Apr 16-May 16-Jun Design Development Testing Training
Comments
OCA is in general agreement with the Commission's proposals related to instant connects and seamless moves. While it finds these processes to be reasonable, OCA asserts that certain issues should be addressed. OCA Comments at 2-3. OCA submits that every EGS customer who contacts the EDC to arrange a move should be informed of the seamless move process so that the customer is aware that they will retain the EGS at their new location unless the EGS determines that it will not continue to provide service at the new location. OCA further submits that EGSs should be required to send a confirmation letter to a customer informing the customer that the EGS will or will not continue service at the new location. OCA acknowledges that this may increase costs for EGSs, but believes that customers should be aware of how their service will be provided as their circumstances change. OCA Comments at 3-4.
Regarding EDC cost recovery, OCA submits that these costs should be recovered from the EGSs that benefit through maintaining the customer relationship and by establishing a contractual relationship at the time service is established. To the extent these costs are recovered from ratepayers, OCA submits that the costs should be recovered in a base rate case and that the Commission must carefully review these costs in such proceedings to ensure that they are just and reasonable. OCA Comments at 5-6.
Resolution
Upon review of UGI's plan and the associated comments, this Commission remains convinced that seamless moves and instant connects are important enhancements to the competitive electric marketplace. These two items are, from a customer's perspective, ordinary and expected capabilities that have been hindered by current EDC account handling processes and information systems. A customer should not have to obtain new supplier service simply because they moved locations within an EDC's service territory. It is reasonable for customers to expect that their supplier choice and contract be simply ''ported'' to their new location. Likewise, customers should be able to start new service with a supplier without first going onto default service. The current system inappropriately elevates default service to a favored, primary service role. Instant connects will help end this undesirable practice.
We find most of the elements of UGI's revised plan for implementing seamless moves and instant connects reasonable and in conformity with our expectations.
In the proceedings regarding the revised plans filed by Duquesne, FirstEnergy, PECO and PPL, comments were filed by FirstEnergy Solutions (FES) regarding concerns about how customer relocation could result in significant changes to the character of the service being used and thus possibly impacting existing contracts.6 While FES did not file those same comments in this proceeding, we would like to maintain directives that are as consistent as possible across all EDC service territories. As noted in our Order regarding Duquesne's revised plan, we do not think the way to address FES's concern is to allow EGSs to unilaterally terminate contracts simply because a customer relocates.7 Instead, as outlined in the Duquesne Order, we will carefully restrict the customer eligibility requirements for seamless moves. While we find UGI's proposed eligibility requirements in this regard to address some of the concern, we believe they are lacking certain specific limitations. As UGI proposes, seamless moves will be restricted to residential and small commercial/industrial customers that maintain the same rate class at the new service location. Further, as we approved in the Duquesne Order,8 we direct UGI to require that the customer maintains the same supplier billing rate, billing option and tax exemption percentage. Additionally, as was approved in the Duquesne Order, we direct UGI to include a three-day gap/overlap limit in their eligibility requirements.9
With the additional requirements outlined herein, UGI's revised plan is sufficient to prevent customers from materially changing their contracts with EGSs simply by moving to a new location. We reiterate that these safeguards include limiting seamless moves to residential and small business accounts; requiring that the rate class remains unchanged; that the customer maintains the same supplier billing rate, billing option and tax exemption percentage; and that any gaps or overlap of service will be limited to three days. We are convinced that these robust safeguards will prevent a customer from significantly changing the characteristics of their service with an EGS as a result of a move to a new location.
In addition to the above safeguards, a supplier is always able to submit a drop request if they do not wish to serve the customer at a new location. We emphasize that any EGS which processes a customer drop in a seamless move environment should be doing so per the terms and conditions of their existing agreement with the customer. Ideally, this should be addressed under the cancellation provisions of the disclosure or contract the EGS has with the customer. Existing supply agreements should not be adversely impacted by implementation of seamless moves with all of the foregoing protections in place.
To the extent that an EGS desires to expressly recognize the possibility of seamless moves in future contracts, they are free to do so. In addition, EGSs may pursue modification of existing contracts, with customer agreement. Regardless of the foregoing, it is the desire of the customer to retain the current supply terms and conditions that should control, subject to the EGS's ability to drop that customer consistent with the terms of the existing contract as mutually agreed to by both parties.
In response to customer notice issues raised by OCA, we will adopt the same measures as we did in the Duquesne Order and not require EGSs to send a confirmation letter to the customer stating that it will/will not continue to serve the customer at the new address.10 EGSs are free to send such a notice to their customers, but requiring such a notice is unnecessary. We prefer the approach adopted in the Duquesne Order, where the EDC will inform the customer that his or her EGS supply service will seamlessly move to the new location (assuming eligibility requirements are met).11 The customer does not have to authorize or take any additional actions for this to happen. We direct UGI to include this in its plan.
UGI notes that it will take approximately 26 weeks to implement seamless move and instant connect functionalities in its service territory. We recognize that with this Order, Commission action on UGI's plan has put it in a position in which it would not be able to implement seamless moves and instant connects by the July 1, 2016 implementation deadline. Twenty-six weeks following the entry date of this Order would be mid-November of 2016. Therefore, we direct UGI to implement seamless moves and instant connects no later than November 30, 2016.
However, this Commission recognizes that UGI is in the process of updating its legacy CIS. We also recognize that this Commission provided UGI with a temporary waiver of the requirement in 52 Pa. Code § 57.174 for multiple off-cycle, three-business day switching of metered accounts for the period from December 15, 2014, through September 15, 2015.12 We directed UGI to implement its proposed manual off-cycle switching process by September 15, 2015, and we also granted a temporary waiver of the requirements of 52 Pa. Code §§ 56.2, 56.11 and 57.174 from the date UGI implements its manual off-cycle switching process through September 15, 2017.13 While we believe it possible to implement seamless moves and instant connects during the period in which UGI performs manual off-cycle switching, timely development of full three-business day switching continues to be a high priority. Therefore, UGI may petition this Commission to delay implementation of seamless moves and instant connects if such implementation will significantly hinder UGI's ability to fully implement the requirements of 52 Pa. Code §§ 56.2, 56.11 and 57.174 by the September 15, 2017 deadline and/or if UGI believes there is a substantial benefit and also cost savings associated with coordinating seamless moves/instant connect implementation with the CIS upgrade.
Regarding cost recovery, we disagree with OCA's primary position that costs should be borne by the EGSs. While EGSs will obtain some benefit from these processes, customers will also benefit. The seamless move and instant connect functionality will not only benefit current shopping customers, it will be available for all eligible customers. These enhancements are permanent improvements that, to a large extent, are simply correcting an unacceptable status quo due to existing limitations in utility customer information systems. For these reasons, we agree with OCA's secondary position that these costs be included in base rates. The scrutiny of a base rate proceeding is the appropriate mechanism to ensure that utilities will recover only prudent and reasonably-incurred costs. As OCA points out, this is consistent with recent Commission decisions on the costs associated with accelerated switching. It is also consistent with our decision in the Duquesne Order.14
Conclusion
The Commission approves UGI's plan filed on April 20, 2015, as modified by this Order, for implementing seamless moves and instant connects in its service territory. We direct UGI to implement seamless moves and instant connects in its service territory no later than November 30, 2016.
Therefore,
It Is Ordered That:
1. UGI Utilities, Inc.—Electric Division's plan filed with the Commission on April 20, 2015, to implement seamless moves and instant connects in its service territory is approved as modified by this Order.
2. Within 10 days of the entry date of this Final Order, UGI Utilities, Inc.—Electric Division shall file a compliance plan with the Commission that incorporates the modifications directed by this Final Order and also any clarifications requested in this Final Order.
3. UGI Utilities, Inc.—Electric Division shall file with the Commission for its review and approval revised tariff supplements consistent with the terms of this Order at least 30 days prior to the availability of seamless move and instant connect functions within its service territory.
4. This Final Order be served on all jurisdictional Electric Distribution Companies, the Bureau of Investigation and Enforcement, the Office of Consumer Advocate, the Office of Small Business Advocate and the parties who filed comments at Docket No. M-2014-2401126.
5. The Secretary shall deposit a notice of this Final Order with the Legislative Reference Bureau for publication in the Pennsylvania Bulletin.
6. A copy of this Order be posted on the Commission's website at the Office of Competitive Market Oversight's web page at http://www.puc.pa.gov/utility_industry/electricity/electric_competitive_market_oversight.aspx.
7. The Office of Competitive Market Oversight shall electronically serve a copy of this Final Order on all persons on the contact list for the Committee Handling Activities for Retail Growth in Electricity.
ROSEMARY CHIAVETTA,
Secretary
[Pa.B. Doc. No. 16-972. Filed for public inspection June 3, 2016, 9:00 a.m.] _______
1 See Investigation of Pennsylvania's Retail Electricity Market Order, Docket No. I-2011-2237952 (Order entered Apr. 29, 2011).
2 See Investigation of Pennsylvania's Retail Electricity Market: End State of Default Service Final Order, Docket No. I-2011-2237952 (Order entered Feb. 15, 2013).
3 See Rulemaking to Amend the Provisions of 52 Pa. Code, Chapter 57 Regulations Regarding Standards for Changing a Customer's Electricity Generation Supplier Final-Omitted Rulemaking Order, Docket L-2014-2409383 (Order Entered Apr. 3, 2014).
4 See EDC plan filings for Seamless Moves and Instant Connects Secretarial Letter, Docket No. M-2014-2401127 (Served Aug. 13, 2014).
5 See EDC plan filings for Seamless Moves and Instant Connects Secretarial Letter, Docket No. M-2014-2401127 (Served Mar. 20, 2015).
6 See Duquesne Light Company's Revised Plan Regarding Implementation of Seamless Moves and Instant Connects, Docket No. M-2014-2401127 (Filed Apr. 20, 2015) (hereinafter Duquesne Order); Seamless Moves/Instant Connects Revised Implementation Plan for Metropolitan Edison Company, Pennsylvania Electric Company, Pennsylvania Power Company and West Penn Power Company, Docket Nos. M-2014-2401130, M-2014-2401155, M-2014-2401151 and M-2014-2401148 (Filed Apr. 20, 2015); PECO Energy Company's Revised Plan for Accomplishing Seamless Moves and Instant Connects, Docket No. M-2014-2401085 (Filed Apr. 20, 2015); Pike County Light & Power Company's Plan to Implement Seamless Moves and Instant Connects, Docket No. M-2014-2401119 (Filed Apr. 20, 2015); PPL Electric Utilities Corporation Compliance Filing Plan for Implementing Seamless Moves and Instant Connects for Metered Accounts, Docket No. M-2014-2401103 (Filed Apr. 20, 2015); UGI Utilities, Inc.—Electric Division Revised Plan for Implementing Seamless Moves and Instant Connects, Docket No. M-2014-2401126 (Filed Apr. 20, 2015).
7 See Duquesne Order at page 10.
8 Id.
9 Id. at page 12.
10 Id. at pages 11-12.
11 Id. at page 5.
12 See Petition of UGI Utilities, Inc.—Electric Division to Defer Implementation of Portions of Revised Standards For Changing a Customer's Electric Generation Supplier at 52 Pa. Code §§ 57.174 and 57.180 and to Implement an Alternative Method to Address Certain Variable Rate Disputes Order, Docket No. P-2014-2449397 (Order entered May 7, 2015).
13 See Duquesne Order at page 5.
14 Id. at page 12.
