Duquesne Light Our Energy... Your Power

Size: px

Start display at page:

Download "Duquesne Light Our Energy... Your Power"

Vernon Townsend
6 years ago
Views:

1 Duquesne Light Our Energy... Your Power Gary A. Jack Assistant General Counsel 411 Seventh Avenue th Floor Pittsburgh, PA Tel Fax gjack~duqlight.com March 5, 2007 VIA OVERNIGHT MAIL James J. McNulty, Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building, 2nd Floor 400 North Street Harrisburg, P A Re: Policies to Mitigate Potential Electricity Price Increases Docket No. M-OOO61957 Dear Secretary McNulty: Enclosed are an original and fifteen (15) copies of Duquesne Light Company Initial Comments in the above-referenced proceeding. Enclosures Shane Rooney (via )

2 , " PENNSYLVANIA PUBLIC UTILITY COMMISSION Policies to Mitigate Potential Electricity Price Increases Docket No. M INITIAL COMMENTS OF DUQUESNE LIGHT COMPANY Pursuant to the Pennsylvania Public Utility Commission s ("Commission Tentative Order ("Order ), issued in these proceedings on February , Duquesne Light Company ("Duquesne" or the "Company ) hereby submits the following comments. BACKGROUND Duquesne has extensive experience with post-transition default service. Duquesne has successfully implemented three default service plans and currently has a fourth default service plan pending before the Commission. Duquesne s plans have supported the development of competitive retail markets and its service territory has one of the highest levels of retail shopping in the United States. (See attachment A for U.S. retail shopping statistics.) Many industry observers point to Texas as having the most advanced retail markets in the country. According to a recent Texas commission report on the state of competition 56% of electricity sold in the competitive market in Texas is supplied by providers other than the traditional affiliated REP. "! By comparison, Duquesne has 54% of its total system load being I Report to the 80th Texas Legislature, Scope of Competition in Electric Markets, PUCT, January 2007, at 51.

3 ). supplied by alternative electric generation suppliers ("EGSs Duquesne also has a higher level of retail shopping than all of the utilities in New York. As retail markets continue to develop, Duquesne also has provided residential and small commercial and industrial ("C&I") customers stable rates that are below the regulated rates in effect prior to its restructuring. Relative to the regulated generation rate caps approved in Duquesne s restructuring case in May of 1998, residential and small C&I customers in Duquesne s service area are expected to realize about $950 million in savings (nominal dollars) over the period, if the Commission approves Duquesne s most recent default service plan. In addition, to the extent that customers have realized and will continue to realize even greater savings by shopping for electricity, the total savings resulting from Duquesne s restructuring are even larger. COMMENTS Duquesne Supports EDC Specific Education Plans and Believes an AccompanviDi! State-Wide Comparison may be Counterproductive In order to obtain such high levels of customer shopping occurring today in the Duquesne service territory, Duquesne has been very active for at least seven years in a consumer education process as the Commission is proposing herein. Duquesne is unique in this state as it has gone through three previous POLR proceedings and is embarking on its fourth POLR plan. Its rate caps expired in Duquesne has been educating its citizens since at least 2000 about customer choice, expiration of rate caps, and wise use of energy. Given the progress of Duquesne Light's transition, new communications 2 Most New York utilities rely on a " portfolio" supply approach that the proposed rules are purporting to emulate. (ANFRO at 21.

4 , " regarding rate cap expirations may cause confusion in the marketplace for our customers. Duquesne s customers have not experienced large fluctuation in prices - in fact average residential rates are lower today than 15 years ago. This is very different than the other utilities in the state and their customers where shopping is not occurring and large increases in prices are expected beginning in The customers of those utilities will need education on customer shopping and their upcoming expiration of rate caps. So when the Commission states in its order the Commission recognizes that ratepayers may be more receptive to consumer education campaigns at a time closer to the expiration of rate caps, when Duquesne s rate caps expired five years ago, it is clear to Duquesne that this proposed consumer education is not intended for Duquesne customers, but is one for the other major utilities whose rate caps are to expire in the future. (Order at p. 5) With this experience as a backdrop, Duquesne recommends tailoring any education programs to meet the needs of the individual utility' s customer base and market circumstances. (Order at p. 5, 6). Service territories where rate caps are to expire should utilize a broad-based communication plan. A plan should make sure that the vulnerable sectors of customers (such as senior citizens, low-income households and moderate income, working households) are addressed in messages, but overall the plan should be broadly based to touch all customers. Low-Income Customers The PUC mentions in its Tentative Order the expansion of low-income programs. It cites some of the efforts of Duquesne in this regard, such as its recent expansion of LIURP. (Page 17 of Order). Importantly, in Duquesne s recent rate case, low income

5 customers were held harmless from the increases to make sure that this vulnerable sector did not experience increases in rates. But, addressing this important sector is best done by individual utility cases, not in an overall communication plan envisioning addressing global issues such as choice and expiration of rate caps. Council for Utility Choice The Council for Utility Choice has value and, Duquesne believes, can provide insight and assistance. However, the group needs reconstituted to reflect an electric constituency, rather than gas matters, if it is to be utilized. But once that occurs, it could provide an advisory role to utilities found to need a communication plan for choice and rate cap expiration. CONCLUSION Duquesne has extensive and successful experience with post transition default service plans. It has maintained stable rates for small customers and yet has one of the highest percentages of retail shopping load in the country. In fact, it has well over 95% of all the residential shopping, 81 % of all the commercial shopping and 90% of all the industrial shopping in the entire state. Well over half of Duquesne s total load is shopping with alternative energy suppliers. In spite of this, Duquesne s total rates are lower today than they were 15 years ago for customers and Duquesne provides a reasonable level of price certainty. Duquesne s experience is truly a success story. Duquesne supports customer education that is tailored to its customer base and their specific needs. It is critical for customers to understand upcoming changes and to plan for them. But Duquesne s territory is different than the other territories in Pennsylvania. For Duquesne s territory, customers have been actively shopping for

6 years. Over half of the entire load in Duquesne s territory is shopping with alternative energy suppliers. Duquesne s rate caps expired five years ago. A massive communications outreach program has already been rolled out and largely completed in Duquesne' territory. Duquesne is now undergoing its fourth POLR plan review. Based on all these distinctions, Duquesne does not believe that participating in a state-wide communication plan focused on matters Duquesne addressed 5-7 years ago is productive or a wise use of its ratepayers money. In fact, it is counter productive as could be confusing to our citizens in the service territory. Obviously communication of other necessary information -- such as the true cost of electricity, pricing, tools and information to allow customers to take advantage of energy efficiency and conservation measures and alternative opportunities for electricity supply -- is occurring on a regular basis in order to support such high shopping statistics in Duquesne s territory. Duquesne appreciates this opportunity to participate and comment. Dated this 5th day of March Respectfully submitted Duquesne Light Company ~~L Fred Eichenmiller, Director Rates and Regulatory Affairs

7 Attachment A S. Retail Access Shopping Statistics Total CU$t~m~rL()ad Rank Utility State Miaration Rate Notes AEP Texas North Company 73% AEP Texas Central Company 70% Texas-New Mexico Power 62% TXU 56% DuQuesne Liaht Co. 54% Potomac Electric Power Co. 53% Rochester Gas & Electric 51% Centerpoint 51% NSTAR 49% Fitchburg Gas & Electric 49% Consolidated Edison 45% Illinois Power 44% Potomac Electric Power Co. 44% Central Maine Power Co. 43% Massachusetts Electric Co. 41% Western Massachusetts Electric Co. 40% Niagara Mohawk Power Corp. 40% Orange and Rockland Utilities 38% Commonwealth Edison 36% Delmarva Power & Light 36% AmerenCILCO 36% Baltimore Gas & Electric 36% Bangor Hydro Electric Co. 36% Maine Public Service Co. 35% New York State Electric & Gas 34% Central Hudson Gas & Electric 31% AmerenCIPS 30% Allegheny (Potomac Edison, Monongahela) 30% Delmarva Power & Light 28% PSEG 22% Dayton Power & Light 22% Atlantic City Electric 22% Ohio Edison 21% JCP&L 20% Narragansett Electric Co. 15% Toledo Edison 13% Cleveland Electric Illuminating 12% Rockland Electric 11% Detroit Edison Pennsylvania Power Co. Consumers Energy Cincinnati Gas & Electric PECD Energy Co. Met Ed Penelec Columbus Southern Power Co. Pennsylvania Power & Light MidAmerican Energy Company Ohio Power Company Allegheny Power (West Penn Power) Notes: Some differences exist in how jurisdictions define customer groups and in how they measure customer shopping. at Duquesne figures based on Company billed kwh as of January DCA reports 47% shopping for all customers in Duquesne s service area based on non-coincident peak load as of January The DCA' figure is comparable to those reported for other Pennsylvania utilities. Source: State websites.

411 Seventh Avenue. Pittsburgh, PA 15219

411 Seventh Avenue. Pittsburgh, PA 15219 2571 (» Duquesne Light Our Energy...Your Power Gary A. Jack Assistant General Counsel 411 Seventh Avenue Pittsburgh, PA 15219 Tel 412-393-1541 Fax 412-393-1418 gjack@duqlight.com e^ m COPY April VIA OVERNIGHT