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The Boroughs of Carlisle, Hatboro, Lansdowne, Media, Narberth, State College, and Swarthmore filed a Petition For Declaratory Order with the Pennsylvania Public Utilities Commission (PUC) to hold that the opt-out nature of the aggregation will not constitute “slamming” and will not violate Public Utility Code Section 2807(d)(1).

The Boroughs contemplated opt-out programs would include residential customers and small businesses.

The petition will appear in the Pennsylvania Bulletin on July 6, initiating a 30-day comment period.

In its petition the Boroughs claim they have “explicit power” to implement opt-out municipal aggregations under the state’s Borough Code.

“Pennsylvania courts have held that both the Boroughs and the Commission bear responsibility under the ERA [Environmental Rights Amendment] to exercise their authority under their respective legal mandates to ensure that Pennsylvania’s citizens have a right to enjoy clean air, clean water, and preservation of environmental values.” 

The Boroughs asked that the PUC find that Boroughs “adopting” a municipal aggregation, as well as the Boroughs’ “CCA Administrator”, do not need to be licensed as an electric generation supplier (EGS). 

The Boroughs argue that the CCA Administrator does not “act as a broker or marketer in any traditional sense,” while stating that the CCA Administrator, “provides advice to the Boroughs in connection with their right of approval over EGS power purchases.”

“The Boroughs request clarification under Public Utility Code Section 2809(a) that an administrator hired by a Borough to advise it and act as its agent in connection with its CCA Program, will not be deemed to be acting as a broker or a marketer and is not required to be licensed as an EGS.” 

“The Public Utility Code embodies the principle that municipalities such as the Boroughs are public bodies that serve as effective protectors of customer interests unless they provide services outside their municipal limits,” the Boroughs said

“Moreover, the Boroughs have a constitutional duty under the Pennsylvania Environmental Rights Amendment (‘ERA’) to act to reduce climate risk on behalf of their residents and the citizens of the Commonwealth that is mirrored by a duty of the Commission to support such action,” the Boroughs said, citing several state supreme court decisions alleged to support the Boroughs’ authority to take climate action, such as their renewables-focused opt-out aggregations.”

“Energy generation suppliers (‘EGSs’) often offer customers unfavorable contract terms, and customers have little or no ability to negotiate those terms. The Boroughs aim to increase retail supply competition by aggregating enough load to achieve bargaining power. The boroughs expect to be able to negotiate favorable contract terms on behalf of their residents, and CCAs throughout the nation have reduced and, in many locales, eliminated unscrupulous EGS practices through effective competition. Consumer education and deeply motivating community interest and engagement are also a key part of the Boroughs’ approach.”

The Boroughs cite the PUC’s approval of an opt-out retail aggregation plan at Pike County Light & Power in 2006, in which the PUC said that the opt-out program, “under this Commission’s oversight and according to the terms and conditions of the Request For Proposals attached hereto, does not constitute slamming or violate the prohibitions of the statute.” [emphasis added]

“Retail competition has proven not to be the benefit for residential and small business customers that was hoped at its inception and has not produced competitive prices for renewable energy.”

Thereby the Boroughs are simply “seeking to carry out their Constitutional mandate under the ERA by providing their residents with low, stable prices for renewable energy coupled with effective protection from unscrupulous commercial behavior.”

“The Boroughs respectfully request Commission review of the Borough Program in the light of the Commission’s Constitutional obligation to preserve the Boroughs’ ability to carry out their Constitutional duties.” 

“A borough may, either singly or jointly, manufacture or purchase electricity for the use of its inhabitants …”

“The purchase of power for use of a Borough’s inhabitants necessarily requires access to a means of distributing power, but this language in Borough Code does not require that a borough establish a municipal utility or own the means of distribution … In other words, a contract for an EDC to provide transmission, distribution, billing, and related services at its regular rates (essentially what it does for any EGS) would not be subject to Commission approval. This is not a direction that the Boroughs have pursued, but it demonstrates that there is no need to narrowly construe the powers granted in the Borough Code.” 

Secretary Letter  (06/20/2024)

P-2024-3049623 (Opened 06/20/2024)
Petition of the Boroughs of Carlisle, Hatboro, Lansdowne, Media, Narbeth, State College, and Swarthmore for a Declaratory Order regarding the Implementation of Community Choice Aggregation