Retail Energy Supply Ass'n v. Pa. Pub. Util. Comm'n

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Retail Energy Supply Association, :
Petitioner :
:
v. : No. 230 C.D. 2017
: Argued: December 6, 2017
Pennsylvania Public Utility :
Commission, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
OPINION BY
JUDGE COHN JUBELIRER FILED: May 2, 2018
Deregulation of the electricity market under the Electricity Generation
Customer Choice and Competition Act1 (Choice Act), has permitted all residential
customers of electric distribution companies2 (EDC) in the Commonwealth to
1
66 Pa. C.S. §§ 2801-2815. The Choice Act deregulated the generation of electricity.
Section 2806(a) of the Choice Act, 66 Pa. C.S. § 2806(a). The Choice Act provides that “all
customers of electric distribution companies in this Commonwealth shall have the opportunity to
purchase electricity from their choice of electric generation suppliers. The ultimate choice of the
electric generation supplier is to rest with the consumer.” Id.
2
Section 2803 of the Choice Act defines “electric distribution company” as follows:
The public utility providing facilities for the jurisdictional transmission and
distribution of electricity to retail customers, except building or facility
owners/operators that manage the internal distribution system serving such building
choose their electricity generation supplier3 (EGS) and have that electricity
distributed to them by the EDC in their area. Residential customers can contract
with any licensed EGS, which may charge less than, or more than, the price-to-
compare (PTC) or default price, which is the price the EDC charges residential
customers, who choose not to shop, in order to supply them with electricity.
However, for low-income customers, the Choice Act mandates that they have access
to affordable electricity, including through low-income assistance programs. One
such program is the Customer Assistance Program (CAP). The CAP allows low-
income customers to pay a percentage of their bills, with the unpaid portion
subsidized through a universal service charge that non-CAP customers pay. Over
time, it became apparent that approximately half of the CAP customers of PPL
Electric Utilities Corporation (PPL), who, like non-CAP customers, have had the
or facility and that supply electric power and other related electric power services
to occupants of the building or facility.
66 Pa. C.S. § 2803.
3
Section 2803 of the Choice Act defines “electric generation supplier” as follows:
A person or corporation, including municipal corporations which choose to provide
service outside their municipal limits except to the extent provided prior to the
effective date of this chapter, brokers and marketers, aggregators or any other
entities, that sells to end-use customers electricity or related services utilizing the
jurisdictional transmission or distribution facilities of an electric distribution
company or that purchases, brokers, arranges or markets electricity or related
services for sale to end-use customers utilizing the jurisdictional transmission and
distribution facilities of an electric distribution company. The term excludes
building or facility owner/operators that manage the internal distribution system
serving such building or facility and that supply electric power and other related
power services to occupants of the building or facility. The term excludes electric
cooperative corporations except as provided in 15 Pa.C.S. Ch. 74 (relating to
generation choice for customers of electric cooperatives).
Id.
2
unrestricted right to shop for their electricity supplier, were paying more than the
PTC. As a result, non-CAP customers were paying more to subsidize the cost of
supplying CAP customers with electricity, while CAP customers, whose subsidies
are limited, were more quickly exhausting their subsidies. Those CAP customers
who exhausted their subsidies were removed from the CAP and had to pay the
entirety of their electricity bill. In order to address these issues, PPL, along with
several other interested stakeholders, Pennsylvania Public Utility Commission’s
(PUC) Bureau of Investigation and Enforcement (I&E), the Office of Consumer
Advocate (OCA), and the Coalition for Affordable Utility Services and Energy
Efficiency in Pennsylvania (CAUSE-PA), ultimately proposed that the right of CAP
customers to shop for their EGS be restricted, limiting CAP customers to EGSs
participating in the CAP-Standard Offer Program (CAP-SOP). The CAP-SOP
requires an EGS participating in the CAP-SOP to agree to serve customers at a 7-
percent discount off the PTC at the time of enrollment, with the price remaining
fixed for 12 months. The CAP-SOP prohibits an EGS from charging an early
cancellation or termination fee. Following an evidentiary hearing, PUC adopted
PPL’s proposed CAP-SOP in an October 27, 2016 Opinion and Order. Retail
Energy Supply Association4 (RESA) petitions for review of PUC’s October 27, 2016
Opinion and Order, as well as PUC’s January 26, 2017 Opinion and Order denying
RESA’s petition for rescission/amendment.5
4
RESA avers that it was founded in 1990 and “is a broad and diverse group of more than
twenty retail energy suppliers dedicated to promoting efficient, sustainable and customer-
orientated competitive retail energy markets.” (RESA Br. at 6 n.1.)
5
RESA petitioned for reconsideration; however, its petition was not timely filed.
Nevertheless, PUC exercised its discretion pursuant to Section 1.2 of its regulations, 52 Pa. Code
§ 1.2, so as to consider RESA’s petition for reconsideration as one for rescission or amendment,
which, PUC noted, may be filed at any time. (PUC Opinion (Op.) and Order at 2 n.1, Jan. 26,
3
At the center of this appeal is whether PUC has the authority to adopt PPL’s
CAP-SOP and, if so, whether substantial evidence supports PUC’s reasons for
adopting it. In a previous case, Coalition for Affordable Utility Services and Energy
Efficiency in Pennsylvania v. Pennsylvania Public Utility Commission (CAUSE-
PA), 120 A.3d 1087, 1103, 1107 (Pa. Cmwlth. 2015) (en banc), allocatur denied,
136 A.3d 982 (Pa. 2016), we held that PUC may “‘bend’ competition under the
Choice Act” so as “to give way to other important concerns” such as “ensuring that
universal service plans are adequately funded and cost-effective.” In this case, we
continue our examination of the extent to which PUC can “bend competition” by
approving PPL’s CAP-SOP.
I. Background
The Choice Act requires, “at a minimum,” that the Commonwealth “continue
the protections, policies and services that now assist customers who are low-income
to afford electric service.” Section 2802(10) of the Choice Act, 66 Pa. C.S. §
2802(10). In furtherance of this policy, the Choice Act requires an EDC, such as
PPL, to submit triennially for PUC approval a Universal Service and Energy
Conservation Plan (USECP). Section 2804(15) of the Choice Act, 66 Pa. C.S. §
2804(15); 52 Pa. Code § 54.74(a)(1). “Universal service and energy conservation”
(USEC) is defined as the “[p]olicies, protections and services that help low-income
customers to maintain electric service.” Section 2803 of the Choice Act, 66 Pa. C.S.
§ 2803. The term USEC includes CAPs, id., which are programs designed to help
“low-income, payment troubled customers.” 52 Pa. Code § 69.264. Specifically, a
CAP is an “alternative collection method” whereby “CAP participants agree to make
2017.) However, in PUC’s order denying relief, it inadvertently referred to the petition as one for
reconsideration. (Id. at 32.)
4
regular monthly payments that may be for an amount that is less than the current bill
in exchange for continued provision of electric utility services.” 52 Pa. Code §
54.72.
Under PPL’s current CAP program, known as the “OnTrack Program,” CAP
residential customers can be enrolled in one of three payment plans. The majority
of CAP customers are enrolled in the percent of bill plan, which uses a mathematical
formula to determine the amount the CAP customer is expected to pay each month
for the next 18 months regardless of the CAP customer’s usage or the cost of energy
(CAP bill). The difference between the CAP customer’s CAP bill and the total bill
that a non-CAP customer would have been required to pay based on usage and price
per kilowatt-hour (kWh) is known as a CAP credit or CAP shortfall. Each CAP
customer is allowed only a certain amount of credit over an 18-month period: for
electric heat customers, the maximum CAP credit is $3,328, and for non-electric
customers, the maximum CAP credit is $1,310. “CAP credits are reduced each
month on a dollar for dollar basis.” (Reproduced Record (R.R.) at 231a.) Thus, if a
customer’s bill without the CAP is $250, but his CAP bill is $200, the CAP customer
is responsible for paying only $200. Id. The $50 difference or shortfall is deducted
from the CAP customer’s available maximum CAP credits. If a CAP customer
exhausts all of his CAP credits before the expiration of the 18-month period, he no
longer receives a CAP bill based on the ability to pay; rather he must pay his entire
bill, regardless of its affordability. Non-CAP residential customers pay for the CAP
credits through the Universal Service Rider, which PPL builds into its rates.
Since 2010, both CAP customers, and non-CAP customers, have had the
ability to shop for an EGS. CAP customers were “allowed to enter into any contract
with any licensed EGS and pay any price for service regardless of whether that price
5
[wa]s higher or lower than PPL’s price to compare” or default service price, that is,
the price a CAP customer would have paid had he not shopped.6 (Id. at 234a.)
In 2014, following PPL’s filing of its 2014-2016 USECP, PUC concluded that
CAP shopping was beyond the scope of the USECP proceeding and directed PPL to
address CAP shopping as part of its next Default Service Program and Procurement
Plan (DSP).7 PPL petitioned PUC for the approval of its fourth DSP (DSP IV
Program) from June 1, 2017, through May 31, 2021. PPL noted in its DSP Petition
(Petition) that at its most recent base rate proceeding, PUC had approved a settlement
agreement under which “the parties agreed to hold a collaborative on CAP
shopping.” (Id. at 102a, 120a.) Prior to the filing of the Petition, several
collaborative meetings were held with interested stakeholders during which PPL
provided data concerning its CAP customers who shopped for an EGS.
Specifically, PPL’s data showed as follows.8 In 2013 and 2014, and up to
October 31, 2015, the average monthly percentage of CAP customers who were
shopping for an EGS was 46 percent in 2013, 51 percent in 2014, and 52 percent for
10 months of 2015. During that same time period, the percentage of CAP customers
6
Section 54.182 of Title 52 of the Pennsylvania Code defines “default service” as the
“[e]lectric generation supply service provided pursuant to a default service program to a retail
electric customer not receiving service from an EGS.” 52 Pa. Code § 54.182. The default service
rate is “[t]he rate billed to a default service customer resulting from compliance with a
Commission-approved default service program,” while the PTC is “[a] line item that appears on a
retail customer’s monthly bill for default service.” Id.7
A default service provider is required to submit a DSP to PUC 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).” 52
Pa. Code § 54.182.
8
PPL witness Michael S. Wukitsch, a Customer Relations Specialist in PPL’s Customer
Service Department, testified before PUC regarding PPL’s statistics and data for CAP shopping.
His direct testimony, which was submitted through written statements, is found at pages 114a-
127a of the Reproduced Record.
6
who selected an EGS with a price above the PTC was 67 percent, 50 percent, and
46 percent respectively. Over a 34-month period, January 2013 through October
2015, an average of 49 percent of CAP customers were shopping, and 55 percent of
those shopping were paying above the PTC. PPL conducted an analysis by month
from January 1, 2012, through October 30, 2015, and discovered that on average
9,626 shopping CAP customers were paying above the PTC. During this time, the
average PTC was $0.08475 per kWh. However, for those CAP customers paying
above the PTC, the average price was $0.11048. Considering that the average CAP
customer who paid above the PTC used 1,197 kWh of electricity, PPL calculated
that had these CAP customers not shopped and paid the PTC, they would have paid
$31 less a month. This meant that each month, on average, CAP customers who
paid above the PTC paid $298,406 (9,626 x $31) more than had they paid the PTC.
Extrapolated over 12 months, the estimated impact on CAP customers paying above
the PTC was $3,580,872.9
PPL also analyzed CAP customers who paid at or below the PTC from
January 1, 2012, through October 30, 2015. PPL discovered that on average 7,750
CAP customers were paying at or below the PTC. During this time, the average
PTC was $0.08475, while these CAP customers paid an average of $0.07772.
Considering that the average CAP customer who paid at or below the PTC used
1,294 kWh, PPL calculated that these customers saved $9 a month by shopping
instead of paying the PTC. This meant that each month, on average, CAP customers
9
During the proceeding before PUC, PPL provided additional data for December 2015
through February 2016. This data showed that during this time period, 88 percent to 93 percent of
CAP customers were paying above the PTC. These percentages were attributed to the fact that on
December 1, 2015, PPL’s PTC dropped $0.01575 per kWh.
7
who paid at or below the PTC saved $69,750, which, when extrapolated over 12
months, resulted in estimated savings of $837,000.
Considering these two groups together, the net financial impact was $228,656
or, extrapolated over 12 months, $2,743,872. Based on this data, PPL concluded
that two harms were occurring as a result of CAP shopping: first, CAP customers
who paid above the PTC were exceeding their CAP credits at a faster pace, which
put them at risk of being removed from the CAP,10 and, second, non-CAP customers,
who subsidize the CAP customers, were bearing the increased CAP costs.
Based on the ongoing harms, PPL believed that some limits on CAP shopping
should be developed.11 However, while PPL considered various CAP shopping
proposals that had been offered during the collaborative, PPL initially
recommended, for a variety of reasons, that PUC “promptly initiate a statewide
collaborative open to all interested stakeholders and/or initiate a new rulemaking
proceeding to address these CAP shopping issues on a uniform, statewide basis.”
(Id. at 112a.) As a temporary measure, PPL proposed that CAP customers be
encouraged to participate in PPL’s Standard Offer Referral Program (the traditional
SOP). The traditional SOP is available to all residential customers, including those
enrolled in PPL’s CAP.12 The traditional SOP allows customers to receive electricity
10
Between January 2012 and October 2015, an average of two percent of CAP customers,
both shopping and non-shopping, were removed from PPL’s CAP for exceeding their CAP credits.
11
James M. Rouland, PPL’s Supervisor of Energy Procurement, Settlement and
Scheduling, testified via written statements about limits that might be placed on CAP shopping.
His direct testimony is found at pages 105a-113a of the Reproduced Record.
12
When a customer calls PPL, for example, when initiating electric service, the PPL call
center representative will ask the customer if he is interested in hearing about opportunities for
potential savings on his electric generation bill. If so, the customer is transferred to a PPL
Solutions representative who will offer the customer an opportunity to enroll in an EGS product
that provides a customer with a 12-month fixed price at a 7 percent discount off the then-current
PTC. If the customer chooses to enroll, the customer can choose to receive service from a
8
from an EGS at a seven percent discount from the then-effective PTC for one year
and does not permit an EGS to charge a termination or cancellation fee. Until a
uniform, statewide solution could be developed, PPL proposed that any customer
who either inquired about the CAP or other low-income programs or is enrolled in
the CAP be advised about the availability of the traditional SOP, including its terms
and conditions.
Other parties interested in PPL’s DSP IV Program submitted their own
proposals on how to mitigate the harm resulting from CAP shopping. OCA
proposed, inter alia, that PPL implement a program rule enforced by PUC whereby
EGSs who seek to serve CAP customers, if at all, must do so at a rate equal to or
below the PTC or, in the alternative, since PPL bills and collects for EGSs, PPL
could notify an EGS and the customer when a price is charged that is higher than the
PTC.13 CAUSE-PA proposed, inter alia, that PPL create structures prohibiting CAP
customers from contracting with EGSs for a price that would be higher than the PTC
at any time or for early cancellation or termination fees.14 RESA submitted rebuttal
testimony opposing the proposals of both OCA and CAUSE-PA. RESA opposed
restrictions on the type of offers an EGS might provide to CAP customers simply
because of their enrollment in the CAP. RESA asserted that it was inappropriate to
particular EGS or, if the customer does not choose a specific EGS, one is randomly assigned to
the customer. An EGS pays a fixed fee of $28 per referred customer. A customer enrolled in the
SOP with an EGS may terminate his contract early – for example, when the PTC drops below what
was a seven percent discounted rate – and re-enroll in the SOP with a new rate, now at seven
percent below the new PTC.
13
OCA’s proposal was offered through the testimony of Barbara R. Alexander, a Consumer
Affairs Consultant for OCA, whose direct testimony, via written statements, is found at pages
181a-196a of the Reproduced Record.
14
CAUSE-PA’s proposal was offered through the testimony of Harry Geller, an attorney
who maintains an office at the Pennsylvania Utility Law Project, whose direct testimony, via
written statements, is found at pages 218a-256a of the Reproduced Record.
9
rely solely on the PTC in determining what constitutes an appropriate price because
a CAP customer might choose a certain EGS product because of price certainty or
because of “value-added products.”15 (Id. at 323a.)
In rebuttal testimony, PPL produced data showing that since the inception of
the SOP, on January 1, 2010, to November 30, 2015, “the PTC has typically been
higher than the SOP 7% discount rate, and the PTC has decreased by more than 7%
from the prior PTC on only four occasions.”16 (Id. at 314a.)
In rebuttal testimony, CAUSE-PA expressed concerns with PPL’s proposal to
encourage CAP customers to use the traditional SOP, in that, while a CAP customer
would receive an initial seven-percent discount off the PTC at the time of enrollment
with the price fixed for 12 months, there was no guarantee that this price would stay
below the PTC for the duration of the contract.17 This is because the PTC can change
on June 1 and December 1. Thus, CAP customers needed to be insulated from the
effects of fluctuations in the PTC.
In sur-rebuttal testimony, CAUSE-PA proposed that PPL use a modified
version of the traditional SOP, the CAP-SOP, as the only vehicle that a CAP
customer could use to select an EGS.18 An EGS participating in the CAP-SOP would
have to agree to serve CAP customers at a seven-percent discount off the PTC at the
time of enrollment and, if the PTC dropped more than seven percent at any time
15
RESA never explained what constitutes value-added products, but on appeal describes
such products as including “loyalty discounts, reward points and gift cards.” (RESA Reply Brief
(Br.) at 15.)
16
PPL provided rebuttal testimony from Wukitsch, whose rebuttal testimony, via written
statements, is found at pages 308a-315a of the Reproduced Record.
17
CAUSE-PA provided rebuttal testimony from Geller, whose rebuttal testimony, via
written statements, is found at pages 326a-335a of the Reproduced Record.
18
CAUSE-PA’s proposal was offered through the sur-rebuttal testimony of Geller, whose
sur-rebuttal testimony, via written statements, is found at pages 373a-394a of the Reproduced
Record.
10
during the CAP customer’s enrollment, to either re-enroll the CAP customer as a
new CAP-SOP enrollee with a seven-percent discount off the then-applicable PTC
or return the CAP customer to default service. The CAP customer would be able to
leave the CAP-SOP contract at any time without a termination or cancellation fee.
At the end of the 12-month CAP-SOP contract, an EGS would be required to either
re-enroll the CAP customer in a new CAP-SOP contract that is a seven-percent
discount off the then-applicable PTC or, if the EGS decides to stop serving CAP
customers, the CAP customer would be returned to default service. A CAP customer
would not be permitted to enroll in an offer that does not comply with the CAP-SOP.
RESA opposed CAUSE-PA’s proposed CAP-SOP.19 RESA argued that if an
EGS is required by the CAP-SOP “to offer a discount to a future unknown price,”
because every six months the PTC can change, an added risk of providing service to
CAP-SOP customers exists.20 (Id. at 409a.) RESA noted that the traditional SOP
for non-CAP customers has a fixed 12-month price, but that price must be a seven-
percent discount off the PTC at the time of enrollment, and not for the entire length
of the contract; an EGS is not obligated to drop the price if the PTC drops. (Id. at
408a.) Given this, RESA believed that “few, if any, EGSs, will choose to participate
in the [CAP-]SOP.” (Id. at 409a.) In addition, CAUSE-PA’s CAP-SOP would
effectively eliminate a CAP customer’s ability to shop for competitive electricity
19
RESA’s opposition to CAUSE-PA’s CAP-SOP was offered through the rejoinder
testimony of Matthew White, General Counsel of Legislative and Regulatory Affairs for Interstate
Gas Supply, Inc., whose rejoinder testimony, via written statements, is found at pages 406a-410a
of the Reproduced Record.
20
In prior rebuttal testimony, White stated that there were any number of reasons why a
CAP customer might elect one EGS over another, such as price certainty or other value-added
products and services, and, thus, using only the PTC for what constitutes an appropriate price was
inappropriate. (R.R. at 323a.)
11
supply because CAP customers would be limited “to electing just one product
available in the market.” (Id. at 410a.) However, since no EGS would be willing to
serve CAP customers on that product, CAUSE-PA’s CAP-SOP “would have the
practical effect of eliminating shopping for all CAP customers.” (Id.)
PPL found CAUSE-PA’s proposal to be a “significant improvement” over its
original proposal.21 (Id. at 400a.) PPL, however, suggested some modifications to
CAUSE-PA’s proposal. CAUSE-PA’s proposal, PPL noted, essentially required an
EGS to guarantee that a CAP customer would receive the seven-percent discount off
the PTC for the entire 12-month contract. This would be problematic because the
PTC changes every six months, and, thus, an EGS would have “to agree to an
entirely unknown rate for a 12-month period.” (Id. at 401a.) Thus, PPL proposed
that an EGS participating in the CAP-SOP agree to serve customers at a seven-
percent discount off the PTC at the time of enrollment, with the price remaining
fixed for 12 months. Following PPL’s modifications to the CAP-SOP, PPL offered
its CAP-SOP as the Joint Litigation Position of CAUSE-PA, OCA, and I&E. Thus,
these parties abandoned their original CAP shopping proposals. PPL’s proposed
CAP-SOP was, in pertinent part, as follows:
4. The Joining Parties agree that, until a uniform, statewide
solution to CAP shopping can be developed, PPL Electric shall
implement a CAP Standard Offer Program (“CAP–SOP”), effective
June 1, 2017, with the following features designed to help mitigate the
impacts that CAP shopping can have on CAP credits, risk of early
removal from the OnTrack program, and the CAP costs that are paid
for by other Residential customers through the Universal Service Rider:
(a) The CAP-SOP is the only vehicle that a CAP customer may use
to shop and receive supply from an EGS.
21
PPL’s proposal was offered through the rejoinder testimony of Rouland, whose rejoinder
testimony, via written statements, is found at pages 397a-405a of the Reproduced Record.
12
(b) Any CAP customer shopping request that does not get processed
through the CAP-SOP will be denied.
(c) EGSs participating in the CAP-SOP must agree to serve
customers at a 7% discount off the PTC at the time of
enrollment. This price shall remain fixed for the 12-month
CAP-SOP contract unless terminated earlier by the customer.
(d) CAP customers may terminate the CAP-SOP contract at any
time and without any termination or cancellation fees or other
penalties.
(e) A CAP customer who terminates a CAP-SOP contract or whose
CAP-SOP contract reaches the end of its term can re-enroll in
the CAP-SOP.
(f) At the conclusion of a 12-month CAP-SOP contract, the CAP
customer will be returned to the CAP-SOP pool and be re-
enrolled in a new CAP-SOP contract, unless the CAP customer
requests to be returned to default service or is no longer a CAP
customer.
(g) EGSs must enroll separate from the standard SOP to be a
participating supplier in the CAP-SOP. EGSs would be free to
voluntarily elect to participate in none, one or the other, or both
the traditional SOP and the proposed CAP-SOP. Enrollment
will be for a three-month period, and shall conform to the
enrollment process for the standard SOP. EGS may opt in to
participate in the CAP-SOP on a quarterly basis, and are free to
leave the CAP-SOP on a quarterly basis.
5. For the purpose of transitioning CAP customers who are
shopping as of the CAP-SOP June 1, 2017 effective date:
(a) All CAP customer shopping fixed-term contracts in effect as of
the effective date of the CAP-SOP will remain in place until the
contract term expires and/or is terminated.
(b) Once the existing CAP customer shopping contract expires or is
terminated, the CAP customer will have the option to enroll in
the CAP-SOP or return to default service, but in any event will
only be permitted to shop through the CAP-SOP.
13
(c) PPL Electric will revise its CAP recertification scripts/process
so that all existing CAP shopping customers receiving
generation supply on a month-to-month basis after June 1, 2017
will be required at the time of CAP recertification to enroll in
the CAP-SOP or return to default service, but in any event will
only be permitted to shop through the CAP-SOP.
(R.R. at 418a-20a.)
Following the close of all evidence,22 the administrative law judge (ALJ)
issued her Initial Decision, which, inter alia, recommended adoption of PPL’s CAP-
SOP with one modification. (PUC Opinion (Op.) and Order at 4, Oct. 27, 2016.)
RESA filed Exceptions to the ALJ’s Initial Decision, arguing that the
proponents of restricting CAP shopping had not satisfied their burden of proof, the
ALJ failed to properly analyze the alternatives to restricting the right to shop
presented in the record, and the ALJ erroneously relied on the data that was presented
as sufficient to justify restricting shopping. RESA also argued that even if the
proponents had met their burden of proof, PPL’s CAP-SOP would not succeed
because no EGSs would be willing to participate.
PUC, in its Opinion and Order, denied RESA’s Exceptions to PPL’s CAP-
SOP.23 (Id. at 67.) PUC concluded that the parties supporting PPL’s CAP-SOP met
their burden of proof. (Id. at 40, 53.) PUC wrote, in pertinent part, as follows:
We find that the Joint Parties have met their burden of proof that
the CAP-SOP proposal has merit and that [PUC] should adopt this
proposal on an interim basis. We do not come to this conclusion lightly,
as [PUC] has been steadfast in its support of the competitive electric
generation market in Pennsylvania. However, based upon the
substantial and unrefuted evidence presented by PPL in this
22
All parties waived cross-examination of the witnesses. (PUC Op. and Order at 4, Oct.
27, 2016.)
23
PUC declined to adopt the ALJ’s modification, which is not at issue on appeal.
14
proceeding, it is incumbent upon [PUC] to address this matter in a
reasonable and prudent fashion to balance the competing objectives
within the [Choice] Act. It is vitally important that the existing CAP
programs be administered in a financially responsible fashion
consistent with our obligations under the [Choice] Act to foster
competitive electric markets.
We conclude that our decision to approve the CAP-SOP is
consistent with the Commonwealth Court’s decision in CAUSE-PA. In
that case, the Court held that we have the authority under Section
2804(9) of the [Choice] Act, for the purpose of ensuring that universal
service plans are adequately funded and cost-effective, to approve CAP
rules that would limit the terms of an offer from an EGS which a
customer could accept and remain eligible for CAP benefits. CAUSE-
PA [120 A.3d] at 1103. . . . In this case, the Parties presented substantial
evidence in support of the proposed CAP-SOP, as well as evidence
regarding why other alternatives would not be reasonable. The data
provided by PPL in this proceeding demonstrated the economic harm
experienced as the result of unrestricted CAP customer shopping
decisions. The identified economic harm affects the ability of CAP
customers to remain on CAP, as higher costs result in quicker erosion
of the CAP customers’ limited allocation of CAP credits and also
affects non-CAP customers by increasing the subsidy they incur to
support the universal service objectives within the [Choice] Act. We
find that this unrefuted evidence is sufficient to permit [PUC] to impose
CAP rules that may partially restrict or limit the ability of these
customers to shop for electricity. In essence, we agree with the ALJ
that mitigation is required to balance the interests between shopping
and non-shopping customers. The CAP-SOP proposal of the Joint
Parties, however, does not eliminate the ability of these customers to
participate in the competitive marketplace. To the contrary, these
customers will retain the ability to shop by participation in a form of
the SOP, which provides a 7% discount off the PTC price in effect at
the time of enrollment, which has been determined to be very successful
in Pennsylvania since its inception.
Next, in consideration of RESA’s position that there are several
reasonable alternatives available in lieu of the proposed CAP-SOP
option, we are in agreement with the ALJ that it is not feasible to require
the Joint Parties to identify all possible alternatives. Rather, we find
that several alternatives were, in fact, considered by the Parties, but that
they ultimately determined that the Joint Litigation Position was the
most reasonable such alternative. We conclude that none of the
15
alternatives suggested by RESA are acceptable alternatives. We further
agree with the ALJ that RESA’s recommendation to impose no
restrictions on CAP shopping and to only encourage CAP customers to
use the SOP if they do shop is simply insufficient. We conclude that
this recommendation fails to protect CAP shoppers from the negative
effects of paying more than the PTC and maximizes the burden on other
Residential customers who fund the CAP program and, as such, is not
a viable alternative.
....
Therefore, we shall adopt the Joint Litigation Position[.]
(Id. at 53-56 (emphasis added) (footnote omitted).)
Next, PUC rejected RESA’s argument that if PPL’s CAP-SOP was adopted,
EGSs would not participate. (Id. at 56, 66.) Considering that there is extensive EGS
participation in the traditional SOP, PUC found RESA’s argument to be
“speculative” with “no basis whatsoever in the record.” (Id. at 66.) PUC noted that
PPL’s CAP-SOP included a provision that the parties would have the ability to
petition PUC to reopen the CAP-SOP in the event that there was no EGS
participation and/or changes in retail market conditions that justified reopening the
CAP-SOP. (Id.) Based on the foregoing, PUC adopted PPL’s CAP-SOP. (Id. at
69-71.)
RESA then petitioned for rescission/amendment of PUC’s October 27, 2016
Opinion and Order. RESA argued that PUC erred as a matter of law by not
conducting a legal analysis of whether the alternatives to PPL’s CAP-SOP, such as
PPL’s initial proposal to encourage its CAP customers to use PPL’s traditional SOP,
were reasonable. PPL’s CAP-SOP, RESA argued, amounts to governmental
slamming. PUC also erred in failing to properly weigh the evidence in the record
showing that PPL’s CAP-SOP would eliminate EGS participation in the CAP.
Finally, RESA argued that if PUC decided to restrict shopping via PPL’s CAP-SOP,
16
PUC should remand the matter to the ALJ so that a full record could be developed
on other reasonable alternatives that may exist.
PUC declined to reconsider its October 27, 2016 Opinion and Order,
concluding that RESA had not raised any new or novel arguments nor any that PUC
had not already considered and rejected. (PUC Op. and Order at 17-19, Jan, 26,
2017.)
II. Discussion24
A. PUC’s Authority to Restrict CAP Customers Right to Shop
1. Contentions of the Parties
RESA argues that the clear and unambiguous language of the Choice Act
requires that all customers of EDCs have the opportunity to purchase electricity from
their choice of EGSs, but PPL’s CAP-SOP does not allow CAP customers to have
direct access to the competitive market or give them the opportunity to purchase
electricity from their choice of EGSs. Indeed, PPL’s CAP-SOP does not involve
any shopping at all. Moreover, CAP customers cannot choose their EGS. Rather,
CAP customers can only receive services from those EGSs who decide to participate
in PPL’s CAP-SOP. Even then, CAP customers do not select the EGS which serves
them but are placed in a pool and assigned a participating EGS.
RESA adds that PUC exceeded its authority under the Choice Act by
mandating the price terms for CAP customers. For an EGS, “the only avenue
available . . . to serve PPL’s CAP participants is to pay a $28 per customer referral
fee and serve customers for 12 months at a mandatory 7% discount off the PTC at
the time of enrollment, with no early cancellation fees.” (RESA Brief (Br.) at 27.)
24
We have reorganized RESA’s issues on appeal for purposes of this opinion.
17
The Choice Act is clear, as is this Court’s decision in CAUSE-PA, that PUC lacks
the statutory authority to regulate EGS prices. While acknowledging that CAUSE-
PA may permit a rate ceiling, RESA argues that PPL’s CAP-SOP goes beyond a rate
ceiling. A rate ceiling would allow an EGS some flexibility to offer products within
a price range and provide “value added products and services.” (Id. at 31.) Here,
however, rather than being a rate ceiling, PPL’s CAP-SOP, because it permits a
participating EGS to offer only a single price at seven-percent off the PTC, is “the
ceiling, walls and floor.” (Id.)
RESA also argues that PUC’s approval of PPL’s CAP-SOP exceeds PUC’s
authority under the Choice Act in that the CAP-SOP forces CAP customers “who
have affirmatively exercised their right to select an EGS to return to the EDC for
default service.” (Id. at 22-23.) Since CAP customers would be forced to return to
default service without their consent, this constitutes “governmental slamming,”
which EGSs themselves are prohibited from doing.25 (Id. at 23-24.).
PUC responds that under the Choice Act and this Court’s decision in CAUSE-
PA, PUC has the authority – indeed, the duty – to regulate EGSs serving CAP
customers. This Court, in CAUSE-PA, PUC contends, said that PUC has the
obligation to ensure that rates are just and reasonable, and that under certain
circumstances, unbridled competition must give way to other important concerns,
such as ensuring that the CAP is administered in a cost-effective manner for both
CAP and non-CAP customers so that low-income customers may continue to have
25
“‘Slamming’ is an unauthorized change to a customer’s supply service.” Pa. Pub. Util.
Comm’n, Bureau of Investigation & Enf’t v. Energy Servs. Provider, Inc., Docket No. M-2013-
2325122, 2014 WL 2644840, *2 n.3 (PUC). Section 57.177 of Title 52 of the Pennsylvania Code
permits PUC, inter alia, to assess fines and initiate proceedings to revoke the license of an EGS
that demonstrates a pattern of having changed a customer’s EGS without his consent. 52 Pa. Code
§ 57.177.
18
access to electric service. Therefore, PUC concludes, it has the authority to bend
competition by imposing price limits on EGSs serving CAP customers. The
Intervenors26 add that PPL’s CAP-SOP does not set EGS prices because the
participation of an EGS in the CAP-SOP is entirely voluntary. PPL separately
argues that the CAP-SOP does not set the rate that EGSs must charge but merely
sets a price ceiling.
While PUC does not specifically respond to RESA’s contentions about
governmental slamming, CAUSE-PA, OCA, and PPL argue that RESA
mischaracterizes the record. PPL’s CAP-SOP allows for CAP customers to finish
their existing contracts with an EGS, and, once that contract has expired, the CAP
customer can either return to default service, shop through the CAP-SOP, or contract
with an EGS on mutually-agreed-to terms outside of the CAP-SOP, including with
the EGS that had been previously supplying the customer.
In reply, on the issue of price, RESA argues that a rate ceiling contemplates a
maximum that an EGS can charge, but what PUC permits here through PPL’s CAP-
SOP is the one and only price. While the Intervenors argue that an EGS’s
participation in the CAP-SOP is voluntary, this argument ignores the fact that the
only options for an EGS that wishes to serve CAP customers is to offer this one and
only price – a 7 percent discount from the PTC coupled with a $28 referral fee – or
to not serve CAP customers at all.
On the issue of governmental slamming, RESA replies that when CAP
“customers are presented with no opportunity to do anything other than what PUC
has decided they may do and are forced to make a selection against their will and
26
CAUSE-PA, OCA, and PPL, as Intervenors, have all submitted briefs in support of
affirming PUC’s Orders. We do not recount the arguments of the Intervenors where they are
repetitive of those of PUC.
19
without their consent,” this is slamming. (RESA Reply Br. at 16.) “[C]ontract
expiration” is no defense to slamming. (Id.) PPL’s CAP-SOP deprives CAP
customers of the default position, pursuant to 52 Pa. Code § 54.10, to remain with
their existing EGS, even after the contract expires, unless the customer elects a
different option.
2. Scope and Standard of Review
On a petition to review a decision of PUC, our standard of review is limited
to determining whether substantial evidence supports the necessary findings of fact,
whether PUC erred as a matter of law, and whether constitutional rights were
violated. CAUSE-PA, 120 A.3d at 1094. We defer to PUC’s interpretation of the
Public Utility Code27 and its own regulations unless PUC’s interpretations are clearly
erroneous. Id. at 1095. We may not substitute our judgment for that of PUC “when
substantial evidence supports the PUC’s decision on a matter within the
commission’s expertise.” Id. (internal quotation marks and citation omitted).
“Judicial deference is even more necessary when the statutory scheme is technically
complex.” Id. (internal quotation marks and citation omitted). On issues of law,
“our standard of review is de novo and our scope of review is plenary.” Id.
3. Our Decision in CAUSE-PA
We begin with a review of our decision in CAUSE-PA. There, PECO Energy
Company (PECO), an EDC, submitted for approval to PUC its CAP Shopping Plan.
Id. at 1091. Under PECO’s CAP Shopping Plan, an EGS that wished to participate
in the CAP had to agree to charge a rate for electricity supply to CAP customers that
27
The Choice Act is part of the Public Utility Code, 66 Pa. C.S. §§ 101-3316.
20
was at or below PECO’s PTC but permitted an EGS to impose cancellation or
termination fees. Id. OCA recommended that an EGS be prohibited from imposing
cancellation or termination fees. Id. PUC concluded that it did not have the authority
under the Choice Act to impose a limit on the shopping price for CAP customers at
or below the PTC or to prohibit an EGS from charging early termination or switching
fees. Id. at 1091-92. Petitioners appealed to this Court, arguing that PUC erred in
its conclusion, and we agreed. We first looked to the language of the Choice Act,
noting that “the rule requiring express legislative delegation is tempered by the
recognition that an administrative agency is invested with the implied authority
necessary to the effectuation of its express mandates.” Id. at 1100 (citation omitted).
We pointed out “that the overarching goal of the Choice Act is competition through
deregulation of the energy supply industry, leading to reduced electricity costs for
consumers[;]” however, this “scheme does not demand absolute and unbridled
competition.” Id. at 1101. Rather, at times, PUC may “‘bend’ competition under
the Choice Act” so as “to give way to other important concerns” such as “ensuring
that universal service plans are adequately funded and cost-effective.” Id. at 1103.
Of particular significance, we saw in PUC’s approval of PECO’s SOP for non-
CAP customers, although not at issue on appeal, an example of PUC bending
competition under the Choice Act. Id. at 1090, 1093, 1103. PECO’s SOP required
an EGS to “agree to supply electricity to referred PECO customers at a fixed rate of
at least 7% below PECO’s PTC at the time of customer enrollment for a term of 12
months.” Id. at 1090 (footnote omitted). A PECO customer in the SOP could cancel
at any time without being charged a fee and could then select either an alternative
EGS or return to PECO’s default service PTC. Id. at 1090 & n.4, 1096. Because
PUC rejected the price ceiling component of PECO’s proposed CAP, PUC “directed
21
PECO to allow interested CAP customers to avail themselves of the [SOP].” Id. at
1093. Although PUC went “to great lengths” to explain the differences between the
PECO SOP and the PECO CAP so as to justify its authority to approve the former
but not the latter, we found the distinctions between the two programs to be “not
material to the legal question of whether the PUC has statutory authority to
implement, or approve, an EGS price ceiling under any circumstance.” Id. at 1103.
Indeed, if, as PUC argued, it “lack[ed] the authority to place a cap on the rate an
EGS may charge a [non-CAP] customer, it seem[ed] to us that such lack of authority
would extend to the CAP as well as to the [SOP].” Id. (emphasis added).
Therefore, following the reasoning of both PUC and this Court in PP & L Industrial
Customer Alliance v. Pennsylvania Public Utility Commission, 780 A.2d 773 (Pa.
Cmwlth. 2001) (en banc), we concluded that PUC has the authority under the Choice
Act to impose or approve “CAP rules that would limit the terms of any offer from
an EGS that a customer could accept and remain eligible for CAP benefits[,]”
including approving an EGS price ceiling and prohibiting early cancellation fees.
CAUSE-PA, 120 A.3d at 1103-04. We went on to state the following:
So long as it “provides substantial reasons why there is no reasonable
alternative so competition needs to bend” to ensure adequately-funded,
cost-effective, and affordable programs to assist customers who are of
low-income to afford electric service . . . the PUC may impose CAP
rules that would limit the terms of any offer from an EGS that a
customer could accept and remain eligible for CAP benefits – e.g., an
EGS rate ceiling, a prohibition against early termination/cancellation
fees, etc.
Id. at 1104 (quoting PP & L, 780 A.2d at 782).
Nevertheless, while we concluded that PUC has the authority to impose CAP
rules, such as a price ceiling, there was substantial evidence in that record to support
22
PUC’s conclusion that there was not a substantial reason “to justify limiting
competition by imposing a price ceiling on EGSs.” Id. at 1107.28 Similarly,
Petitioners did not persuade PUC that customer education programs, as a reasonable
alternative to price regulation, were inadequate. Id. at 1107. However, we reached
a different conclusion with respect to cancellation and termination fees. We held
that PUC should have approved a rule prohibiting an EGS from charging a CAP
customer cancellation and termination fees because it was undisputed that a
prohibition on such fees would provide “an added layer of protection to CAP
participants consistent with the affordability goals of the Choice Act[,]” and because
PUC’s decision to reject this prohibition out of concern for the impact it would have
on competition and choice was not supported by substantial evidence. Id. at 1108.
4. PPL Has the Authority to Approve the CAP-SOP
While RESA argues that the Choice Act requires that CAP customers be
given “[d]irect access to the competitive market” and, thus, “[t]he opportunity to
purchase electricity from their choice of EGSs,” (RESA Br. at 19-20), we held in
CAUSE-PA that the Choice Act permits PUC to effectively limit competition and
choice for low-income customers, provided there are no reasonable alternatives to
restricting competition, so that other important policy concerns of the General
Assembly, such as access, affordability, and cost-effectiveness, may be served.
CAUSE-PA, 102 A.3d at 1104, 1106; see 66 Pa. C.S. § 2802(9) (“Electric service is
essential to the health and well-being of residents, to public safety and to orderly
economic development, and electric service should be available to all customers on
reasonable terms and conditions”), (10) (“The Commonwealth must, at a minimum,
28
We discuss this portion of our decision in CAUSE-PA in more detail in the section
addressing RESA’s substantial evidence challenge.
23
continue the protections, policies and services that now assist customers who are
low-income to afford electric service”), (17) (“There are certain public purpose
costs, including programs for low-income assistance . . . which have been
implemented and supported by public utilities’ bundled rates. The public purpose is
to be promoted by continuing universal service and energy conservation policies,
protections and services, and full recovery of such costs is to be permitted through a
nonbypassable rate mechanism”); 66 Pa. C.S. § 2804(9) (“Programs under this
paragraph shall be subject to the administrative oversight of the commission which
will ensure that the programs are operated in a cost-effective manner”). As the
General Assembly recognized in Section 2802 of the Choice Act, if CAP customers
were given direct access to the competitive market, they would be priced out of the
market because they cannot afford to pay the entirety of their bills. Further, PUC
could find that PPL’s prior CAP, which did allow for greater competition in that a
CAP customer was permitted to enter into any contract with any licensed EGS and
pay any price for service regardless of whether the price was higher or lower than
PPL’s PTC, was causing harm to both CAP and non-CAP customers in terms of
access, affordability, and cost-effectiveness. Substantial evidence in the record
supports PUC’s finding, as we discuss more fully below in the section addressing
RESA’s substantial evidence challenge, that PPL’s prior CAP, without any shopping
restrictions, resulted in about half of shopping CAP customers paying above the PTC
who then exhausted their CAP credits more rapidly, while non-CAP customers had
to pay higher rates since they subsidize the cost of electricity for CAP customers.
PUC’s approval of PPL’s CAP-SOP is designed to alleviate harms to access,
affordability, and cost-effectiveness resulting from unrestricted CAP shopping. We
recognize that there is a “tension” between competing policy concerns promoting
24
competition and choice, and protecting access, affordability, and cost-effectiveness;
however, PUC’s approval of the CAP-SOP seeks to strike a balance between these
concerns under the authority the General Assembly gave it through the Choice Act.29
CAUSE-PA, 120 A.3d at 1101.
PUC’s approval of the price term of PPL’s CAP-SOP at a 7 percent discount
off the PTC at the time of enrollment for a fixed period of 12 months serves these
other important policy concerns of the General Assembly, and the price term does
not exceed PUC’s authority under the Choice Act. It is evident that PPL’s CAP-
SOP is modeled after PPL’s traditional SOP. There is not a marked difference
between the two programs. The traditional SOP and CAP-SOP share the following
features: both offer a fixed 12-month price based on a 7 percent discount off the
PTC in effect at the time the customer enrolls; both the traditional SOP and CAP-
SOP prohibit an EGS from charging a cancellation or early termination fee; both the
traditional SOP and CAP-SOP permit the customer to re-enroll in the program,
including when the PTC drops below the discounted rate or when the customer
cancels his contract and seeks to re-enroll at a new rate discounted 7 percent below
the then new PTC; and both allow an EGS to participate on a quarterly basis and to
leave on a quarterly basis. Moreover, the CAP-SOP here, modeled after PPL’s
traditional SOP, shares many of the same features of the SOP in CAUSE-PA, which
29
RESA’s advocacy in favor of unregulated competition so that CAP customers can choose
an EGS for reasons “[b]eyond lower pricing” arguably undercuts the Choice Act’s concern for
accessible, affordable, and cost-effective electrical service for all Pennsylvanians. (RESA Reply
Br. at 15.) RESA would have CAP customers “leverage the power of the competitive market” so
that they might obtain “loyalty discounts, reward points and gift cards offered through some EGS
programs.” (Id.) However, that leverage of power comes at a cost to non-CAP customers who
would be paying even more in subsidies, were there no shopping restrictions, so that CAP
customers might earn more reward points to use at a retailer or restaurant. The use of the CAP in
this manner would appear to be inconsistent with the Choice Act.
25
we said PUC has the authority to approve. CAUSE-PA, 120 A.3d at 1103. Thus,
PUC’s approval of the price rate contained in PPL’s CAP-SOP, consistent with our
holding in CAUSE-PA, does not exceed PUC’s authority under the Choice Act.
We disagree with RESA’s claim that PPL’s CAP-SOP goes beyond the rate
ceiling we said was permissible for PUC to approve in CAUSE-PA because this one
and only price is “the ceiling, walls and floor.” (RESA Br. at 31.) PPL’s CAP-SOP
sets a rate ceiling, which, as we stated in CAUSE-PA, is permissible. Further, the
participation of both an EGS and a CAP customer in the CAP-SOP is voluntary.
Thus, a CAP customer is free to drop out of the CAP-SOP and arrange for electric
supply outside of the CAP-SOP with an EGS, which may be at a rate higher or
lower than seven-percent off the PTC. Moreover, if a CAP customer is able to obtain
a better offer than the one in the CAP-SOP, the CAP customer is not prevented from
doing so, but the CAP customer would then have to pay the entirety of his bill. The
record shows that the CAP participation rate of confirmed low-income customers is
24 percent. (R.R. at 225a.) Thus, some low-income customers do choose to shop.
RESA also argues that PPL’s CAP-SOP will change a CAP customer’s
electricity supplier without his consent, which constitutes “slamming.” (RESA Br.
at 23-24.) However, the CAP-SOP provides that CAP customers operating under an
existing contract on June 1, 2017, can finish their contract with an EGS. Once the
contract expires, or is terminated by the CAP customer, the CAP customer will have
the choice to either return to default service, shop through the CAP-SOP while
maintaining CAP benefits, or leave the CAP and shop for an EGS outside of the
26
CAP-SOP. PPL’s CAP-SOP does not force a CAP customer to return to default
service. Rather, the choice remains with the CAP customer.30
RESA also argues that PPL’s CAP-SOP violates 52 Pa. Code § 54.10,31
because it “deprives [a CAP customer] of the ‘default’ scenario, under which
30
The Choice Act contains a prohibition against slamming in Section 2807(d)(1) of the
Choice Act, 66 Pa. C.S. § 2807(d)(1), which also provides for PUC to establish regulations to
ensure that a customer’s electricity supplier is not changed by an EDC without the customer’s
consent. There is no provision in the CAP-SOP that exempts PPL from complying with Section
2807(d)(1) and applicable regulations.
31
Section 54.10 provides as follows:
An EGS shall provide the following notices to customers prior to the expiration of
a fixed term contract or prior to a change in contract terms:
(1) An initial notice shall be provided to each affected customer 45 to 60 days prior
to the expiration date of the fixed term contract or the effective date of the
proposed change in terms. For customers who have elected to receive electronic
communications from the EGS, the notice shall be transmitted in the manner
chosen by the customer. The initial notice must include:
(i) A general description of the proposed change in terms of service.
(ii) The date a change shall be effective or when the fixed term contract is
to expire.
(iii) An explanation of why a change in contract terms is necessary.
(iv) A statement indicating when a follow-up options notice shall be issued
with details regarding the proposed change.
(v) A statement explaining that the options notice must discuss the
customer’s options to the proposed change in terms of service or expiring
fixed term contract.
(vi) A statement indicating whether the existing fixed term contract has a
cancellation fee, and an explanation of the fee amount and how to avoid the
fee, if possible, including notice of the date when the customer can choose
a different product from the customer’s existing EGS, choose an alternative
EGS or return to default service.
(2) An options notice shall be provided, by first class mail, to each affected
customer at least 30 days prior to the expiration date of the fixed term contract
27
or the effective date of the proposed change in terms. The options notice must
include:
(i) A statement advising the customer of the specific changes being proposed
by the EGS and informing the customer of how to exercise the customer’s
options, including the customer’s ability to accept the proposed changes, to
choose another product offering from the customer’s existing EGS, to select
another EGS or to return to default service.
(ii) Information regarding new pricing or renewal pricing including the price to
be charged, per kilowatt-hour, for the first billing cycle of generation service:
(A) If a customer fails to respond to the options notice and is converted to a
month-to-month contract, the EGS shall provide a disclosure statement
under § 54.5 (relating to disclosure statement for residential and small
business customers).
(I) Notice of a subsequent change in pricing shall be provided to the
customer at least 30 days prior to the new price being charged.
(II) For customers who have elected to receive electronic
communications from the EGS, notice of the change in pricing shall
be transmitted in the manner chosen by the customer. For all other
customers, notice shall be provided by first class mail.
(B) If a customer fails to respond to the options notice and is entered into a
new fixed term contract, the EGS shall provide the fixed, per kilowatt-hour
price to be charged and term length of the contract.
(iii) The telephone numbers and Internet addresses, as applicable, for the Office
of Consumer Advocate, the Commission and PaPowerSwitch.com.
(iv) Language clearly visible on the front of the envelope used to provide the
options notice stating that it contains important information regarding the
expiration or changes in terms of the customer’s electric supply contract.
(3) When a customer fails to respond to either notice, the following apply:
(i) A fixed term contract shall be converted to one of the following:
(A) A month-to-month contract, either at the same terms and
conditions or at revised terms and conditions, as long as the contract
does not contain cancellation fees.
(B) Another fixed term contract, as long as the new contract includes
a customer-initiated cancellation provision that allows the customer
to cancel at any time, for any reason, and does not contain
cancellation fees.
(ii) The converted contracts shall remain in place until the customer chooses
one of the following options:
28
shopping customers stay with their EGS until the customer affirmatively selects
another option.” (RESA Reply Br. at 17 (emphasis in original).) RESA’s position
is that under this regulation the EGS must provide two notices to the customer prior
to the expiration of a fixed-term contract, explaining the terms of a new contract,
how to accept those changes, choose a different product, select another EGS, or
return to default service. If the customer fails to respond to those notices, the EGS
can convert the expiring contract into either another fixed-term contract, or a month-
to-month contract, with that EGS, on the same or different terms and conditions
(which may be less favorable to the customer). This new contract remains in place
until the customer takes affirmative action to elect a different option. However, it
appears the CAP-SOP requires the CAP customer to make a decision and does not
permit the non-choice to control the new contract with an EGS. For month-to-month
contracts, a CAP customer must make a choice when it is time for CAP
recertification, to enroll in the CAP-SOP, return to default service, or make a
contract outside of the CAP. (R.R. at 420a, ¶ 5(a)-(c).) Thus, we see no proof that
the CAP-SOP changes a CAP customer’s electricity supplier without his consent or
in violation of regulation.
B. Substantial Evidence Challenge
1. Contentions of the Parties
RESA argues that PUC failed to satisfy its initial burden of showing
substantial reasons why there are no reasonable alternatives to restricting shopping.
(A) Select another product offering from the existing EGS.
(B) Enroll with another EGS.
(C) Return to the default service provider.
52 Pa. Code § 54.10.
29
PUC failed to meet this burden because the data did not demonstrate harm to PPL’s
USECP as a result of CAP shopping and reasonable alternatives to restricting
shopping were available.
On the issue of harm, RESA argues, the data did not show that CAP shopping
has eroded the funding, cost-effectiveness, and affordability of PPL’s USECP.
While PUC focused on CAP shoppers who at some point were billed a price higher
than the PTC, the data also showed that about half of all CAP shoppers were billed
at or below the PTC. Notwithstanding this, PUC ordered these customers who were
experiencing a savings to return to default service, resulting in them paying higher
bills. The data also did not show, as PUC claimed, that as a result of CAP shopping,
CAP customers were eroding their CAP credits faster. Between January 2, 2012,
and October 30, 2015, an average of two percent of CAP participants, both shoppers
and non-shoppers, were removed from the CAP because they exceeded their CAP
credits. This figure is consistent with the 1.8 percent rate for the period between
January 2009 and December 2011, which includes one year prior to when CAP
customers could shop. Ultimately, RESA claims, the data PPL provided suffers
from the fact that it focuses on a single point in time and does not reflect the
conditions CAP shoppers experienced over their entire shopping experience.
On the issue of reasonable alternatives, RESA contends that PPL’s initial
proposal, to inform CAP or potential CAP customers about PPL’s traditional SOP,
is a reasonable alternative to restricting their right to shop that mitigates the harms
that are allegedly occurring. In addition, RESA continues, PUC did not properly
analyze whether there were no reasonable alternatives to restricting shopping. It is
not enough for the proponents supporting PPL’s CAP-SOP to coalesce around an
approach that restricts the right to shop as a means of showing that there is no
30
reasonable alternative. Also, RESA argues, there was no comprehensive review and
assessment of PPL’s entire USECP. As a result, “alternatives to restricting shopping
that could have been effectuated within the design of the USECP were not
developed.” (RESA Br. at 52.)
Finally, RESA claims that even if PUC met its initial burden, there was
substantial evidence in the record showing that the CAP-SOP would not succeed
because it included elements that would discourage EGSs from participating in the
CAP-SOP.
PUC responds that it met its burden. PUC argues that RESA misstates the
burden of proof. In CAUSE-PA, PUC argues, this Court said that PUC has to provide
“substantial reasons why the restriction on competition is necessary (i.e., there are
no reasonable alternatives).” (PUC Br. at 22 (emphasis in original) (quoting
CAUSE-PA, 120 A.3d at 1106).) This language is simply a restatement of the
substantial evidence standard for agency adjudications. Thus, under CAUSE-PA,
PUC’s determination imposing price restrictions on EGSs serving CAP customers
should be upheld if it is supported by substantial evidence. PUC met that standard.
The evidence of record showed the harms both CAP and non-CAP customers were
suffering from unrestricted customer shopping. As to the existence of reasonable
alternatives, PUC contends that CAUSE-PA did not impose an additional burden on
the party proposing a price restriction to prove there is no alternative course of
conduct or, stated differently, if there is a single reasonable alternative, then the
imposition of a shopping restriction is unlawful. Again, all that is required is that
PUC’s evaluation of various alternatives be supported by substantial evidence. The
parties considered other alternatives, but the proponents of PPL’s CAP-SOP
concluded that PPL’s CAP-SOP was the most reasonable alternative. RESA’s
31
proposal to impose no restrictions and encourage CAP customers to use the
traditional SOP, PUC concluded, did not protect CAP and non-CAP customers from
the negative effects associated with CAP customers paying more than the PTC.
CAUSE-PA adds that, as to the proof of harm, the evidence showed that from
January 2012 through February 2015, 34,780 customers were removed from the
CAP because they had exceeded their credits, and of this number, 27,600 or 79
percent, were shopping with an EGS during some portion of the prior 18 months. In
any case, if the costs of CAP customers increased, someone had to bear those costs.
While RESA claims that this harm “‘is focused on a single point in time,’” that time
period consisted of a 46-month time period and showed a net harm of $228,656 per
month. (CAUSE-PA Br. at 47 (quoting RESA Br. at 48).) RESA did not submit
any evidence contradicting this proof of harm. As for RESA’s claim that PPL’s
CAP-SOP is bound to fail because EGSs will not participate, PUC correctly
concluded that such a claim is speculative. Just 7 of RESA’s 21 members operate
in the Commonwealth, and even RESA’s own witness could only speculate as to the
reasons why an EGS might participate in a SOP.
In reply, RESA argues that reasonable alternatives to restricting shopping that
PUC did not even consider were to increase or eliminate the CAP credit maximum
or to identify solutions within the program design of the USECP. As for non-CAP
customers subsidizing the cost for CAP customers, this is merely a public purpose
cost, which the General Assembly contemplated in the Choice Act, and the General
Assembly’s concern that the USECP be appropriately funded and operated in a cost-
effective manner has nothing to do with the amount of subsidy that non-CAP
customers pay. Indeed, the $2.7 million non-CAP customers paid to subsidize the
cost of the CAP amounts to 75 cents a customer.
32
RESA further disagrees with the assertion of PPL and the Intervenors that
CAUSE-PA imposed merely a substantial evidence requirement as opposed to
requiring that there be no reasonable alternative.
2. Substantial Evidence Supports the Determinations32
In CAUSE-PA, we said that “the proponents of the rule restrictions . . . ha[ve]
the burden of proof and ultimately the burden to persuade the PUC to enact the
proposed restrictions on competition.” CAUSE-PA, 120 A.3d at 1106-07 (citing 66
Pa. C.S. § 332(a).) We concluded, as previously discussed, that substantial evidence
supported PUC’s decision to reject the proposed PECO price ceiling, but that PUC’s
decision to reject the prohibition on early cancellation and termination fees was not
supported by substantial evidence. Id. at 1107-08. On the issue of the proposed
price ceiling, we noted that “it is not our role to reweigh the evidence below or to
substitute our judgment for that of the PUC, particularly on matters within the PUC’s
area of expertise.” Id. at 1107. In short, we said, “PUC was not persuaded that
Petitioners’ evidence provided a substantial reason to justify limiting competition by
imposing a price ceiling on EGSs as part of the PECO CAP Shopping Plan.” Id. On
the issue of the prohibition on early cancellation and termination fees, we said that
“PUC recognized that such fees may impede the ability of CAP customers to escape
from unaffordable variable rate contracts, particularly during periods of price
spikes.” Id. at 1107-08. Thus, there appeared to be no dispute that prohibiting early
cancellation and termination fees “would provide an added layer of protection to
CAP participants.” Id. at 1108. Moreover, there was no evidence showing that
32
Initially, to the extent RESA reiterates in its substantial evidence challenge that PPL’s
CAP-SOP should have been considered in the context of PPL’s USECP, that contention, as we
discuss more fully in Section C.2, is waived.
33
prohibiting early cancellation and termination fees “would be anti-competitive and
limit the choices available to CAP participants.” Id. at 1107. While PUC had
rejected the proposal on prohibiting cancellation and early termination fees on the
ground that consumer education would suffice, we said that “[s]tatutorily-mandated
disclosures and prohibiting early cancellation/termination fees . . . are not mutually
exclusive, especially where there is a lack of evidence that the latter would adversely
affect the competitive marketplace for CAP participants.” Id. at 1108.33
Therefore, what CAUSE-PA requires, in order for a rule restriction to survive
our review, is that there be substantial evidence in the record showing a substantial
reason why a restriction on competition is necessary, that is to say, there are no
reasonable alternatives to restricting competition. Stated simply, the CAP-SOP, as
it constitutes a restriction on competition, must be necessary. A restriction on
competition is necessary when, one, there is a harm associated with competition and,
two, there is no reasonable alternative to the rule that restricts competition. Id. at
1103-04. PPL, CAUSE-PA, OCA, and I&E, as the proponents of PPL’s CAP-SOP,
bore the burden of proof on both these showings, and, again, we review PUC’s
determination on whether the proponents met their burden of proof under our
substantial evidence standard.34
On the issue of harm, the evidence presented showed that between January
2012 and October 31, 2015, on average, nearly 10,000 CAP customers each month
33
One can say from the determination on the issue of early cancellation and termination
fees that competition did not need to bend because such fees did not affect competition at all.
34
Substantial evidence is “such relevant evidence as a reasonable mind might accept as
adequate to support a conclusion.” Emporium Water Co. v. Pa. Pub. Util. Comm’n, 955 A.2d 456,
463 (Pa. Cmwlth. 2008) (citation omitted). Our review focuses “on whether there is rational
support in the record, when reviewed as a whole, for the agency action.” Id. (citation omitted). In
order to reverse, we “must conclude that the findings of the agency are totally without support in
the record.” Id. (citation omitted).
34
were paying above the PTC. (R.R. at 122a, 248a-49a.) These customers, together,
were paying each month, on average, $298,406 more than had they simply paid the
PTC. (R.R. at 123a, 147a.) Even when these overpaying CAP customers were
considered together with those CAP customers who were paying below the PTC, the
CAP was still more costly than the PTC, in the amount of $228,656 each month, or
more than $2.7 million a year. (R.R. at 125a, 154a-55a.) This evidence was
“unrefuted.” (PUC Op. and Order at 53, Oct. 27, 2016 (emphasis added).) This
data did not focus “on a single point in time[;]” rather this data spanned 46 months.
(RESA Br. at 48.) Thus, we disagree with RESA’s claim that this data, showing that
about half of CAP shoppers each month were paying above the PTC, is “not
reflective of the conditions experienced by CAP shoppers over their entire shopping
experience.” (Id.) There is substantial evidence to support PUC’s finding this data
demonstrated a pattern of a significant number of CAP customers overpaying for
electricity.
Moreover, as a natural corollary to overpayment, there was substantial
evidence that these CAP customers eroded their CAP credits more quickly. The data
showed that between January 2012 through February 2016, 34,780 CAP customers
were removed from the CAP, and of this number, 27,600 shopped with an EGS at
some point. (R.R. at 264a.) Since CAP customers only pay a portion of their bill,
non-CAP customers had to pay greater subsidies than had CAP customers simply
paid the PTC. See CAUSE-PA, 120 A.3d at 1103 (noting that the Choice Act
“expressly requires the PUC to administer [low-income programs such as the CAP]
in a manner that is cost-effective for both the CAP participants and the non-CAP
participants”). In short, substantial evidence supports PUC’s determination that
35
unrestricted shopping for CAP customers was resulting in harm both to CAP and
non-CAP customers.
Based on PUC’s determination that harm was occurring as a result of
unrestricted competition, some restriction on competition was permitted. During the
proceedings, the parties submitted their own proposals on how to mitigate the harm
resulting from CAP shopping. With the exception of PPL’s initial proposal, all of
the other proposals involved some restriction on competition. For example, both
OCA and CAUSE-PA initially proposed a price ceiling, albeit at a rate higher than
what PUC ultimately adopted. Only PPL proposed, at least initially, that CAP
customers simply be encouraged to participate in PPL’s traditional SOP. However,
the ALJ and PUC concluded that this alternative is not reasonable, which is
supported by the fact that the traditional SOP has been available to CAP customers
and it has not mitigated the harms associated with unrestricted shopping. (R.R. at
157a, 188a, 190a.)
There is no evidence that the alternative RESA proposes now, which was not
raised before PUC, to raise or eliminate the maximum CAP credits is reasonable or
would mitigate the harm to non-CAP customers. Because RESA did not raise this
before PUC, PUC did not have an opportunity to consider it and there is no record
to support its reasonableness. There is an argument that this alternative may have
the effect of exacerbating the harm to non-CAP customers. A CAP customer only
pays a portion of his bill and, thus, having a CAP credit arguably creates an incentive
for a CAP customer to seek the lowest price for electricity so as not to exhaust his
CAP credits.
Given the foregoing, we conclude that PUC did not err in finding that
proponents of the CAP-SOP proved, on this record, that there were no reasonable
36
alternatives to restricting competition. It is clear that after months of discovery and
several rounds of testimony, the experts and industry leaders involved in this
proceeding could conceive of only a single alternative to restricting competition, and
this restriction was not a reasonable one. In short, substantial evidence supports
PUC’s determination on the lack of reasonable alternatives to restricting
competition. Cf. CAUSE-PA, 120 A.3d at 1107 (noting that petitioners failed to
convince PUC that customer education programs were not a reasonable alternative
to price regulation).
Finally, there is substantial evidence in the record to support PUC’s
conclusion that EGSs will participate in PPL’s CAP-SOP, and RESA’s contention
to the contrary was speculative. The evidence in the record showed that there is
extensive EGS participation in the traditional SOP, which is the model for PPL’s
CAP-SOP, and that RESA represents only a portion of those EGSs who participate
in PPL’s traditional SOP. (PUC Op. and Order at 59-61, 66, Oct. 27, 2016.)
Moreover, even RESA’s own witness, White, could not “speculate on the reasons
each EGS participates in a SOP.” (R.R. at 415a.)
C. Alleged Due Process Violation
1. Contentions of the Parties
RESA argues that its right to procedural due process was violated because the
ultimate restrictions PUC adopted were not offered into the record until the rejoinder
phase of the proceeding, which was after three rounds of written testimony and
nearly five months of discovery. While RESA acknowledges that cross-examination
was available on PPL’s rejoinder proposal, RESA argues that this is not the same as
having a full and fair opportunity to consider a new proposal, seek discovery, and
37
present responsive evidence. Once PPL decided to support the CAP-SOP CAUSE-
PA proposed, with modifications, PUC should have undertaken a full review of
PPL’s USECP in order to afford RESA due process, as well as to comply with what
this Court said in CAUSE-PA.
PUC responds that, assuming RESA has a protected property interest, RESA
was afforded due process. While the CAP-SOP that was ultimately approved was
introduced during the rejoinder phase of the proceeding, RESA had the opportunity
to engage in cross-examination, along with other procedural actions, but it declined
to do so. “It would be unrealistic, impossible and inefficient to require all proposals
ultimately adopted to be introduced in the earliest stages of a proceeding.” (PUC
Br. at 32.)
CAUSE-PA adds that RESA was put on notice, from the inception of this
proceeding, that the issue of unrestricted CAP shopping was going to be litigated.
Thereafter, at every stage of the proceeding – direct, rebuttal, sur-rebuttal, and
rejoinder – the issue of reasonable and appropriate CAP shopping restrictions was
discussed through the proposals the parties and Intervenors offered. RESA had the
opportunity to respond to these proposals directly or it could have cross-examined
the witnesses about these proposals. Since RESA did not object to any of the
evidence that was admitted, and since it waived cross-examination, RESA “cannot
readily complain about due process.” (CAUSE-PA Br. at 37-38.).
2. Waiver
Issues raised for the first time on appeal are waived, including most
constitutional rights, such as the right to due process. Pa. Bankers Ass’n v. Pa. Dep’t
of Banking, 962 A.2d 609, 621-22 (Pa. 2008); see Hudock v. Pa. Dep’t of Pub.
38
Welfare, 808 A.2d 310, 313 n.4 (Pa. Cmwlth. 2002) (“When a party fails to raise an
issue, even one of a constitutional dimension, in an agency proceeding, the issue is
waived and cannot be considered for the first time in a judicial appeal”).
RESA never argued before PUC that it had been deprived of due process
because the CAP-SOP that PUC ultimately approved was not proposed until PPL’s
rejoinder testimony was waived. Even when RESA petitioned for
rescission/amendment of the October 27, 2016 Order, and argued that the details of
PPL’s CAP-SOP were not placed into the record until PPL’s rejoinder, it did so in
the context of requesting that the matter be remanded to the ALJ so that a full record
might be developed on other reasonable alternatives, and not on the basis that RESA
had been deprived of its constitutional right to due process. Moreover, RESA does
not cite to the record in its brief showing where it raised this issue before PUC, as
required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate
Procedure, Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record
does not reveal that this issue was raised before PUC. Therefore, we conclude that
this issue is waived.35
Likewise, RESA’s complaint that the issue of the CAP should have been
reviewed in the context of the USECP is also waived.36 In 2014, following PPL’s
filing of its USECP, PUC concluded that CAP shopping was beyond the scope of
the USECP proceeding and directed PPL to address its CAP as part of its next DSP.
(R.R. at 102a, 119a.) RESA did not timely object to the issue of having CAP
35
Even if the issue was not waived, assuming RESA has a protected property interest at
stake, we would conclude that RESA was not deprived of due process.
36
RESA does not cite to the record in its brief showing where it raised this issue before
PUC, as required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate Procedure,
Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record does not reveal that this
issue was raised before PUC.
39
shopping addressed in that context. Instead, RESA addressed the issue of CAP
shopping on the merits. See Commonwealth v. U.S. Mineral Prods. Co., 927 A.2d
717, 734 n.11 (Pa. Cmwlth. 2007) (citation omitted) (noting that “one must object
to errors, improprieties or irregularities at the earliest possible stage of the
adjudicatory process to afford the jurist hearing the case the first occasion to remedy
the wrong and possibly avoid an unnecessary appeal”), aff’d, 956 A.2d 967, 978 (Pa.
2008).
D. Alleged Regulatory Taking
1. Contentions of the Parties
RESA argues that approval of PPL’s CAP-SOP constitutes a regulatory taking
because it interferes with an EGS’s reasonable investment-backed expectations by
denying it the economically viable use of its existing contract rights and potential
future customers.
PUC responds that an EGS’s participation in PPL’s CAP-SOP is entirely
voluntary and, therefore, there is no taking.
CAUSE-PA adds that PPL’s CAP-SOP does not constitute a regulatory taking
because it does not foreclose all productive economic activity of any EGS in the
Commonwealth. The CAP-SOP does not implicate any of the relationships that an
EGS has with a non-CAP customer within PPL’s service territory.
2. Waiver
Again, as with RESA’s claims about being deprived of due process, its claim
that PPL’s CAP-SOP constitutes a regulatory taking is waived because RESA did
40
not raise this issue before PUC.37 See Tri-State Transfer Co., Inc. v. Dep’t of Envtl.
Prot. Tinicum Twp., 722 A.2d 1129, 1132 (Pa. Cmwlth. 1999) (concluding that
appellant’s claim that voiding of its solid waste permit constituted a regulatory
taking was not raised before the Environmental Hearing Board and, therefore, the
issue was waived).38
37
RESA does not cite to the record in its brief showing where it raised this issue before
PUC, as required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate Procedure,
Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record does not reveal that this
issue was raised before PUC.
38
Even if we were to review this issue, we would conclude that PPL’s CAP-SOP does not
constitute a taking because an EGS’s participation in the CAP-SOP, which affects a small
percentage of PPL’s 1.4 million customers, is voluntary. N. Area Pers. Care Home Adm’rs. Ass’n
v. Dep’t of Pub. Welfare, 899 A.2d 1182, 1191 (Pa. Cmwlth. 2006) (holding that because petitioner
voluntarily participates in Medicare Program and is under no compulsion to provide services to
Medicare residents, increased costs associated with new regulations promulgated by the
Department of Public Welfare, which petitioner claimed it would be unable to recoup from
Medicare, did not constitute a regulatory taking), aff’d per curiam, 919 A.2d 187 (Pa. 2007).
41
III. Conclusion
For the reasons set forth above, we hold as follows: PUC has the authority
under the Choice Act to implement PPL’s CAP-SOP and substantial evidence
supports PUC’s determination to implement PPL’s CAP-SOP; PPL’s CAP-SOP
does not result in governmental slamming; and RESA’s contentions that its due
process rights were violated, that the issue of the CAP should have been reviewed
in the context of the USECP, and that the CAP-SOP constitutes a regulatory taking
are all waived. Therefore, we affirm the Opinions and Orders of PUC.
_____________________________________
RENÉE COHN JUBELIRER, Judge
Judge Fizzano Cannon did not participate in the decision in this case.
42
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Retail Energy Supply Association, :
Petitioner :
:
v. : No. 230 C.D. 2017
:
Pennsylvania Public Utility :
Commission, :
Respondent :
ORDER
NOW, May 2, 2018, the Opinions and Orders of the Pennsylvania Public
Utility Commission, entered October 27, 2016, and January 26, 2017, are hereby
AFFIRMED.
_____________________________________
RENÉE COHN JUBELIRER, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
Retail Energy Supply Association, :
Petitioner :
: No. 230 C.D. 2017
v. :
: Argued: December 6, 2017
Pennsylvania Public Utility :
Commission, :
Respondent :
BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge
HONORABLE RENÉE COHN JUBELIRER, Judge
HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE MICHAEL H. WOJCIK, Judge
CONCURRING OPINION
BY JUDGE McCULLOUGH FILED: May 2, 2018
I concur with the analysis and result reached by the Majority because it
appears that the Public Utility Commission (PUC) has implemented a rule consistent
with my recommendation in my dissent to Coalition for Affordable Utility Services
and Energy Efficiency in Pennsylvania v. Pennsylvania Public Utility Commission,
120 A.3d 1087, 1109 (Pa. Cmwlth. 2015) (McCullough, J., dissenting), appeal
denied, 136 A.3d 983 (Pa. 2016).
In Coalition, I agreed with the Court’s remand of the case for PUC
approval of a rule that would protect Customer Assistance Program (CAP)
participants from early contract cancellation and termination fees that electric
generation suppliers (EGSs) might otherwise impose. 120 A.3d 1109. However, I
also noted that I would instruct the PUC on remand to approve a rule that would
impose a price ceiling on the EGSs that participate in PECO Energy Company’s
(PECO’s) CAP shopping program, since the omission of such a protection for CAP
customers would leave them vulnerable to possible bait and switch tactics by EGSs
that the elimination of cancellation fees would not remedy. On that basis, I noted I
would have remanded the case with the additional instruction that the PUC hold a
hearing to determine whether universal service plans are properly funded and cost
effective under section 2804(9) of the Electricity Generation Customer Choice and
Competition Act (Choice Act), 66 Pa.C.S. §2804(9).
Here, the PUC did consider that question and determined that the
original CAP program was not for the reasons set forth by the Majority. See slip op.
at 3, 7-8. Consequently, the PUC adopted the noted CAP-Standard Offer Program
(CAP-SOP), which imposes price ceilings and thereby ensures that it is properly
funded and cost effective in accordance with section 2804(9). With regard to
whether the CAP-SOP program properly affords the necessary competition as
contemplated by the Choice Act, I join the Majority’s holding that it does.
________________________________
PATRICIA A. McCULLOUGH, Judge
PAM - 2