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In RESA’s Non-Opposition To Settlement statement explaining its non-opposition to the settlement in Duquesne Light’s default service case in Pennsylvania, the Retail Energy Supply Association (RESA) described the SOP program as, “the last Commission approved program in place to encourage customers to shop.”

From RESA Letter:
{***} “The Retail Energy Supply Association (“RESA”) submits this letter to confirm its non opposition to the Joint Petition for Approval of Settlement (“Settlement”) filed on October 1, 2024, regarding Duquesne Light Company’s (“DLC”) tenth default service plan X (“DSP X”). 

While electing to not oppose the Settlement, RESA remains concerned about the lack of concern among many stakeholders and the Commission regarding how the structure of the current competitive retail market could be improved to better support the ability of competitive suppliers to offer more innovative and consumer-oriented products and service. Unfortunately, the Settlement does not offer any pathway for the Commission to consider the negative impacts of the continuing dominance of utility provided default service and the Commission approved messaging of the default service rate as the benchmark upon which all competitive offers should be judged while proposing to terminate the customer service standard offer program – the last Commission approved program in place to encourage customers to shop. The Settlement, however, does include an agreement by Duquesne Light to withdraw several proposals which would have expanded default service offerings that, if implemented, would have made it more difficult for competitive suppliers to develop competitive offers. Recognizing that a broader shift needs to occur beyond what may be accomplished in a default service proceeding, RESA has elected to not oppose the settlement.” {***} [Emphasis Added.]

Signatures to the settlement include the utility, Office of Consumer Advocate, and Office of Small Business Advocate.  This settlement if approved would govern Duquesne Light’s offering of electricity default service to non-shopping customers for the period June 1, 2025, through May 31, 2029.

Among other things, the unopposed stipulation would terminate the standard offer customer referral program (SOP) effective May 31, 2025. Also under the settlement, when a customer enrolls in the customer assistance program (CAP), Duquesne Light, effective June 1, 2025, will automatically drop that customer to default service if the customer is currently taking service from a retail supplier.  Currently, CAP customers are not eligible to shop for a retail supplier.  However, if a customer obtains CAP status after the point in time at which the customer enrolled with a retail supplier, the customer themself must contact the retail supplier to end retail supplier service and return to default service. Such return to default service is a prerequisite for the customer to receive CAP benefit

The settlement also prevents retail suppliers to charge termination or cancellation fees to customers who transfer to default service due to being enrolled in CAP.

As reported previously, Duquesne Light’s unopposed settlement would terminate the standard offer customer referral program (SOP), which allowed customers an opportunity to “test drive” retail choice.  Under the SOP program allowed customers to be randomly assigned to a participating SOP retail supplier with a fixed rate for 12 months that is 7% less than the applicable all-in default service rate at the time of SOP enrollment.

Under the settlement, he standard offer customer referral program at Duquesne Light would cease, while Duquesne Light would adjust its default service product mix to reduce rate volatility for certain customers, under an unopposed settlement filed in Duquesne Light’s default service proceeding at the Pennsylvania PUC.

Service for participants in the SOP program as of May 31, 2025, will continue to be governed by the existing SOP rules, until the end of such participants’ SOP term.

The unapproved settlement if approved would also modify the products used to supply medium C&I default service (customers between 25 kW and 200 kW).  For example, Duquesne Light would cease the use of non-overlapping three-month contracts, with 100% of SOS load bid every 3 months, to serve medium C&I default service.  Duquesne Light proposes to create a portfolio under which half of medium C&I non-shopping load will be served under 1-year full requirements contracts, and half would be served under 6-month full requirements contracts.

The 6-month contracts would include two separate pricing periods within the individual 6-month terms (wholesale suppliers would bid two prices, one price for the first 3 months, and another price for the second 3 months).

Supplies for Medium C&I SOS proposal would be procured every 6 months, during the same procurement which is held to obtain small customer default service (while the procurements would be held at the same time, the products for various SOS customer classes would remain distinct and separate).

For the 50% of medium C&I default service supplied under the 12-month contracts, one-half of such 12-month supplies (i.e. 25% of the needed total SOS supply) would be sought under each semi-annual procurement. For the 50% of medium C&I default service supplied under the 6-month contracts, there would be no overlap, and 100% of the supply served under 6-month contracts would be procured every 6 months.

Default service rates for medium C&I customers would still be established for fixed terms of 3 months (due to the distinct 3-month pricing embedded in the 6-month contracts).

Duquesne Light said it proposed the change in the medium C&I SOS product mix to promote “price stability”, and by procuring all medium C&I supplies in the same auctions as the small customer supplies should boost competition via increased participation by wholesale bidders, who may be reluctant to participate those current medium C&I SOS auctions which occur twice a year without being held in conjunction with the small customer SOS auctions, and which thus have a smaller amount of load available in the overall procurement (as medium C&I auctions are held quarterly for 3 month products, while small customer SOS auctions occur semi-annually).

Under the settlement, there is no change to the default service product mix or pricing terms for Residential & Lighting; Small C&I; and hourly customers.  The default service for the Residential & Lighting class, and the Small C&I (under 25 kW) class, will therefore be served under a mix of overlapping twelve-month (50% of the portfolio) and twenty-four-month (50% of the portfolio) full requirements contracts.  Default service rates for the Residential & Lighting class, and the Small C&I class, would change every six months as is, generally, the current practice, barring any interim rate adjustments allowed under the current tariff.

RESA’s Non-Opposition To Settlement  (10/02/2024)
P-2024-3048592
Petition of Duquesne Light Company for Approval of a Default Service Plan for the Period of June 1, 2025, Through May 31, 2029