Customers offer feedback to PECO’s proposed default service program

Remember the date — June 9, 2020. This is the first time when a public input hearing about PECO’s default service program (DSP) had any public participation.

Notices were sent out by the Pennsylvania Public Utility Commission (PA PUC), by the Office of Consumer Advocate (OCA) — and also a grassroots group called the Earth Quaker Action Team (EQAT), who even produced a 54 minute video explainer — What’s in PECO’s DSP?, asking for much more local solar in the default electricity mix than the proposed half a percent, complete with a plan for a default service committed to a justice-centered transition to solar. 

What’s the issue? 

There’s no denying we’re in the midst of a global climate crisis. And that we need to electrify all fossil fuel applications whilst we use renewable sources to generate our electricity. According to a recent poll, 68% of respondents said Pennsylvania should be prioritizing the availability of renewable energy. So, people get it. 

over 70% of residential customers in Southeast PA — that’s PECO service territory — have remained with PECO as their default electricity service provider

Many people are doing this in their own homes and businesses — investing private funds in weatherizing, insulating, replacing appliances with efficient and electric options, even rooftop solar. 

And yes, we have the freedom of choice in our state with deregulated electric utilities, meaning we can shop for other suppliers. Most commercial and industrial customers have selected third party electricity suppliers. However, over 70% of residential customers in Southeast PA — that’s PECO service territory — have remained with PECO as their default electricity service provider. The amount of solar energy in the mix these customers receive? Half a percent. The utility proposes to remain at this mix for the next 5 years, mainly replacing coal-generated electricity with gas-generated electricity, making not much difference in our greenhouse gas emissions or health. 

The DSP V hearing 

At the June 9th hearing were the usual suspects — an administrative law judge, lawyers representing PECO, representatives from the Office of Consumer Advocate (OCA) and Office of Small Business Advocate (OSBA), lawyers representing the Coalition For Affordable Utility Services And Energy Efficiency In Pennsylvania (CAUSE-PA), and lawyers representing environmental groups — Clean Air Council, Sierra Club of PA, and the PA Solar Energy Industry Association (PSEIA).

here to hear from the public

PECO lawyers explained the 3 proposed changes from their current default service…  

  • New 10 year solar contracts, with half of the solar credits from within PECO service territory. 
  • Voluntary time of use rate structure for residential and small commercial customers for peak, off peak, and super off peak hours, with discounts for off peak and higher rates for peak — all relative to the default rate. 
  • Low income customers enrolled in PECO’s customer assistance program (CAP) can shop for alternative suppliers. There would be education to protect these customers from teaser rates. 

Each team introduced themselves. The team from the Office of Consumer Advocate and the Office of Small Business Advocate emphasized that they’re here to hear from the public. The attorney representing the CAUSE-PA expressed their interest —

  • that low income customer groups are protected from deceptive marking; 
  • that rates structures are equitable; 
  • that climate change and a transition to clean energy is part of the planning; 
  • that low income customers must not bear the cost of the transition to clean energy. 

The attorneys representing environmental groups wanted to ensure that PECO’s default program adequately incorporates clean energy, noting that without doing so, we can’t reach our climate goals. They too asked that PECO didn’t burden low income ratepayers with the cost of the transition to clean energy.

Public officials, the Public, and even a retired Judge

Who spoke? Offering testimony were 8 public officials.

Three were PA State Representatives — Rep Carolyn Comitta of the 156th; Rep Steve McCarter of the 154th and Rep Chris Rabb of the 200th.

Two were Mayors — Philip Dague, Mayor of Downingtown; Dianne Herrin, Mayor of West Chester Borough.

Others were Josh Maxwell, Commissioner for Chester County; Martin Miller, President of Board of Commissioners of West Norriton; and Mark Pinsley, Lehigh County Government.

Two public officials who had signed up to speak weren’t on the call when called upon by Judge Vero — Mark Barbee, Mayor of Bridgeport and Mark Squilla, Philadelphia Council member. 

About 79 PECO customers had signed up to speak. Only 28 of them got the opportunity to do so while the 4 hour hearing dragged on to 6-and-a-half hours.

Some leaders that spoke were Linnea Bond and Gregory Holt of EQAT; Rabbi Julie Greenberg, Russell Hicks, Nora Elmarzouky and Angela Brown-Vann of POWER Interfaith, Ron Celentano of PA Solar Energy Industry Association (PSEIA) plus a speech pathologist, a physician, a data analyst, a research scientist, a park ranger, a high school teacher, a school psychologist, 3 members of local Environmental Advisory Committees (EACs), one retired Judge, and one solar developer. 

What follows is a summation of all these testimonies, in mostly the words of each person speaking. You may recognize your own! 

The issues

Climate crisis 

“The climate crisis looms large, behind COVID-19, the recession, even police accountability. “PECO’s DSP V does not contribute towards mitigating the climate crisis. instead maintaining status quo until 2025. 

Greenhouse gas emissions 

“PECO’s DSP V is counter to the state goal of reducing greenhouse gases, air pollution and increasing local green jobs. “A reminder that 70% of greenhouse gases come from the energy sector; 27% come from electricity production. 

Public health 

“We need to reduce short-lived climate pollutants like methane (from gas extraction, transportation and combustion) and black carbon (from diesel emissions) in order to improve health conditions substantially. “The current electricity mix, in a transition from coal to gas power generation, means more fracked gas, more methane, making it more injurious to people and wildlife.  “Fracked gas is deeply problematic. “Instead, PECO should consider adding a substantial share of utility-scale renewables plus battery storage, and  serve their shareholders’ interest by taking a longer range view, one which recognizes that good corporate citizenship will increasingly be required in order to maintain a license to do business in Pennsylvania and other states.

Climate justice

“Climate change is real. “So is racial and social injustice. Fossil fuel production injures African Americans the most, who are 12% of Pennsylvania’s population, and 44% of Philadelphia’s population. Continuing the status quo means “people will literally die, especially in economically distressed areas and affected by the pandemic. We know “fatality rates of African Americans are significantly higher, with more hospitalizations. Our “embrace of fossil fuels has resulted in greater injuries and longer lasting to our African American constituents. “Low income customers, mostly black and brown families, are who use the default electricity provided by PECO. “The current COVID-19 pandemic affects these same customers’ ability to pay for services while they struggle to maintain their health. “Transitioning the default electricity to 100% clean electricity that’s also affordable is not only an energy plan, but also a social justice plan. One PECO customer & Exelon shareholder asked that “PECO’s proposal be modified to speak for the people not here today, the black and brown people affected by pollution who are not being heard today. 

It’s hard to think as small as PECO is thinking

Future generations

We all need to be able to “tell our grandchildren we were part of the solution, and we all want clearer skies. 

Limiting solar to 0.5% for the next 5 years is totally out of step. It is economically irresponsible

Business as usual

There was mention of the “4 years educating PECO executives to collaborate. “They talk the talk, but have not listened. There has not been any significant progress toward clean energy. “It’s hard to think as small as PECO is thinking, when other countries and cities are moving towards 100% clean energy. “When PECO continues to propose business as usual to the PUC, they’re simply distracting the public. “The current plan locks PECO customers into dirty energy for next 5 years. “In the long term, staying with PECO’s proposed DSP will cost more. Staying at 0.5% renewable energy would leave PECO with a big lift in 5 years, when they would need to go from 0.5% to 10% renewable energy by 2030. There was some chiding… “Limiting solar to 0.5% for the next 5 years is totally out of step. It is economically irresponsible. PA is sadly lagging behind the country, even though PA committed to the Paris Accord.”

Some solutions

PA Constitution

“PA is only one of 2 states with environmental protection in our constitution”, per Article 1, Section 27, guaranteeing each resident the right to clean air and clean water. We should heed this. 

50% of PECO territory committed to 100% renewable energy

Public support for clean energy

  • 68 percent of people polled said Pennsylvania should be prioritizing the availability of renewable energy” per a Franklin & Marshall poll last year.
  • We learned that there are “over 30 communities in Southeast PA, including Philadelphia, that have pledged to transition to 100% renewable energy. If we account for this population, it would be 50% of PECO territory committed to 100% renewable energy. There is not only interest, there is pent up demand for a default service with much more renewable generation in the mix.” They reassured PECO that “private industry and others would make it cost effective”, offering the example of “4.5 cents per kWh for the City Of Philadelphia”’s Adams Solar project; that “solar developers are just waiting in the wings” so they can supply this demand. The mood was that we could reduce the cost of electricity for all rate payers. 
  • “The Chester Climate Action Platform is being developed by brightest minds; all eager to embrace clean renewable energy. 

70% of residential customers have stayed with PECO’s default service

Green Electricity

PECO lawyers asked…Why can’t people simply shop for green electricity? Yes, we have freedom of choice, and can select an electricity supplier other than PECO. 70% of commercial customers, and even more industrial customers have switched to third party suppliers. However, 70% of residential customers have stayed with PECO’s default service

follow the City of Philadelphia’s example with long term commitments” to renewable energy, such as the development of solar farms

Many of them have been “tempted by teaser rates from third party suppliers, and got burnt. The default program must protect these ratepayers, while giving them a healthier product. Also, “green electricity” consists mostly of renewable energy credits (RECs) that don’t support new renewable energy projects. We all need to, especially PECO, “follow the City of Philadelphia’s example with long term commitments” to renewable energy, such as the development of solar farms. Large projects like this “offer least cost over time, without even considering cost of the climate crisis”. “We do not believe RECs are driving demand”. 

Clean energy goals

There have been many clean energy goals by local municipalities in Southeast PA. “Reaching these goals requires more than elected officials”. Now “we need PECO to help with the essential transition to renewable energy”, and craft a default program that moves us all towards renewable energy. This is long past time, and “shouldn’t be about what is most cost effective in short term”. “As PECO buys renewable energy, it will help others on the PJM grid do the same”. “PECO has lot of power to help or harm society’s goal of decarbonization. “Their numerous initiatives are not sufficient. 

“It would be beneficial for PECO, economically and socially, to commit to 100% clean energy, which should be everyone’s goal. 

We need PECO. To reach stated goals by Chester County, and several cities, townships and boroughs, we need PECO. As a corollary, “if PECO does not increase proportion of clean energy, it would be harmful to our clean energy goals.  In so choosing we are also choosing to protect the health of people in our state. “This is not just about electrons, but about the full well being of all citizens within our borders. We must embrace green energy, renewable energy, as much as possible. And do so by simultaneously “creating good family-sustaining jobs. 

“we cannot look at staged progression any longer. We need to move forward with everything now”

Energy Efficiency 

PECO lawyers asked… Why did the City of Philadelphia focus on energy efficiency instead of renewable energy? “Energy efficiency can cut energy consumption by 30%, and it is part of the climate solution. “Implementing energy efficiency first would reduce amount solar needed by the same 30%. “The state-mandated Act 129 energy efficiency program is helpful, but not sufficient for goals of 100% renewable energy. Energy efficiency is the initial focus when analyzing energy usage,since  it’s the low hanging fruit. However, “we cannot look at staged progression any longer. We need to move forward with everything now”, basically, a rapid transition to clean renewable energy. 

“City of Los Angeles has more rooftop solar than the entire state of PA

Clean renewable energy at utility scale 

PECO must “reconsider their proposed DSP. It “must include clean energy, specifically solar. “Make the default service renewable”, including for public electric vehicle charging. Renewable energy, especially at utility scale, is currently most affordable form of energy. New wind and solar farms at utility scale “could lower net cost to consumers. 

Jobs

“Currently, 5,000 Chester County residents work in clean energy; of which 3,500 work in energy efficiency. We need more good jobs, good jobs that can’t be outsourced. The President of the PA Solar Energy Industry Association (PSEIA) reminded the audience that the “City of Los Angeles has more rooftop solar than the entire state of PA. “That the growth of solar jobs in PA is 3%. Compare this to 7.5% in Maryland, 10% in New York, 11.7% in Ohio. This is all in the April 2020 report by E2 — Clean Jobs America 2020. They were quizzed by the PECO lawyers about referencing a report from a non-profit, instead of a government; About making their own chart from raw data; About using research from a Carnegie Mellon PhD thesis that referred to societal value of solar; and Whether they had the right background to understand this study.

The utility

One voice observed “seeing a company trying to discredit its own citizens and customers.” This “should be a joyous occasion”, to discuss the “wonderful innovation by PECO”. Instead the company wants to do the minimum, and trying to “get credit for some public relations around the region.”  Some of the utility’s programs discussed at this hearing are listed below. 

PECO / Exelon, the company — We learned that PECO does want to be a partner, claiming to be the world’s most innovative company. One customer offered to continue to make PECO number 1, but asked that they expedite the transition to renewable energy, involve labor and others and work towards cost savings for everyone. One person referred to the PECO website  and from it, quoted “we’re driving innovation, providing advanced energy services for our customers today and tomorrow. Every day, we are delivering on our promise of safe, reliable, affordable and clean energy.” They questioned methane, reminding us that natural gas is not clean energy. 

PECO’s Green Power Team — PECO wanted to highlight their distributed generation team (dubbed Green Power Team) busily approving rooftop solar at a 400% increase. Customers reported hearing that “other customers have had difficulty with interconnection approval. And that “this is a side point to the DSP discussion. There was a discussion about the Philadelphia Energy Authority’s (PEA) Solarize Philly campaign. And also PEA’s training program for solar construction, Bright Solar Futures, that PECO partially funded. “PECO’s DSP should include bigger commitment to solar”, that PECO “resist[s] doing this while speaking about supporting solar”. 

PECO’s Solar Collaborative — PECO wanted to highlight their work with the solar collaborative. Some people thought it a “great beginning”, but that there was “no follow-thru” from that collaborative. Some “found it shocking that the proposed DSP so low and not local”.

PECO’s support of SB 596 — PECO asked if we knew about their involvement in transportation electrification. Yes, customers know of this. “But we’re hear to talk about the default service for most residents”. 

An improved default service 

Is the proposed DSP adequate? 

The attorney for the environmental groups asked this. One response was that this was analogous to “consuming 50 burgers and then going for a walk”. Basically, not good enough. Some said they were “very very concerned that it’s not adequate”. When asked if there should be more clean energy in the DSP… “Yes, definitely. As community solar on vacant lots, rooftops, and churches. 

Should low income customers bear the burden to transition to renewable energy?

This was asked by the attorney representing CAUSE-PA. No one wanted this. Instead, the answer was… “the shareholders of Exelon should. That’s the responsible party here”. “We can’t pit “affordable energy” against clean energy; that’s a false dichotomy between the two communities. 

“We’re demanding energy service for the bulk of your customers. “We’re here not to talk about individual solutions to climate change”,

20 by 2025

This is about electricity procurement for the vast majority of residents. This is where PECO needs to move boldly towards local solar procurement, and ensure that at least 20% of their procurement is from renewable sources by 2025. We’re “calling on PECO to be strategic leaders, “for the kind of energy we need. “The proposed DSP is meager, and not even local. 

What people want

What people want is “energy service”. “We aren’t calling for philanthropy. “We’re demanding energy service for the bulk of your customers. “We’re here not to talk about individual solutions to climate change”, such as distributed generation. “We urge the PUC fulfil their mandate to regulate PECO. Not only solar, but also microgrids and invest in equitable work force in a substantial manner. 

PECO is out of step, PECO is failing us

One person tasked with developing an energy transition plan for their borough was aware that they won’t get there without careful planning. That they can envision transitioning to 100% renewable electricity for government and businesses, but that “they need PECO’s help with the DSP to move the residential side to renewables”. With the proposed DSP, “they essentially can’t do anything for this sector for the next 4 years”. 

for solar developers to be part of the bidding process, the projects need long term contract

What other utilities are doing

“Utilities across the country are working towards 32% solar, 44% wind. “PECO is out of step, PECO is failing us. “Prudence dictates balance, short term thinking is im-prudent. “Local solar is prudent. “Payback time (for utility scale solar) is 3 years. 

Long term contracts

One person advised PECO to “focus on long term contracts” for electricity procurements. Why? For solar developers to be part of the bidding process, the projects need long term contracts. The long term contracts PECO proposes are for out of state contracts, but nothing local to their territory. Another person pointed out that “99% of power procured by PECO is from 1 and 2 year contracts”. They asked that PECO’s DSP include long term contracts, which would “level the playing field for utility scale solar. That “PepCo in DC is considering similar options”. Later, we learned that the expert witness for the environmental stakeholders, Karl Rabago, also asked for long term contacts in their written testimony.

Money smart 

Another person reminded us that the “default service isn’t just about least cost, but also about price volatility”. “The tiny share of solar that PECO currently procures doesn’t represent a prudent mix for reliability or cost, since solar less expensive than gas. “They noted that solar prices are more stable and reliable; that coal, oil & gas have seen substantial market fluctuations; that solar is the least cost solution, especially during peak demand. “Advocate for prudence and reliability. 

One person studying forecast trends suggested “PECO raise the prominence of solar, and increase investments in this sector. By doing so, they could “align action with their stated mission of public interest”. The PECO attorney seemed aghast that PECO shareholders should pay for the 20% solar

If PECO cannot interpret customer demands, we need to ask the PUC to help them see the light

Default electricity for our times

We all have to rely to electricity. Most of this comes from the grid. So the grid has to be a major partner in generating frugally clean renewable energy. We encourage PECO to rethink submitted plans. 70% of residential customers use DSP, while PECO serves up only 0.5% solar. 

We need local solar way beyond half a percent and decisively toward 100% renewable energy.

Work on our Relationship

“We need a productive partnership with PECO and the PUC. “We need PECO to share our clean energy goals, goals that can be best and most swiftly achieved at the utility level. “We can’t continue to work at odds with each other. “If PECO cannot interpret customer demands, we need to ask the PUC to help them see the light. “We need them to not only hear people’s views this day, but to then act responsibly. “We have many barriers in PA, need to achieve partnership with PECO and PUC, can’t get there without them. 

PECO would be able to promote grid electricity rather than distributed generation. “It’s the smartest thing a utility can do for their own success

“PECO’s proposed DSP is not a neutral plan. “It represents PECO’s choice about our region, about who benefits economically, about who will be damaged and who will pay the cost. “And it  falls disproportionately on black & brown people. 

“A utility’s role is not incidental.” It shouldn’t be our default that most vulnerable should bear cost while shareholders reap profit; that’s backwards. “The default plan should be to help the people. “The default should be a plan that builds on local jobs around solar energy.

We need Exelon to pledge to 100% renewable energy. 

“PECO is a public utility; they have a monopoly. “It is our utility. “We are that public. “We need PECO to step up to serve us. “And the PUC can require this of PECO. “We need energy at the true least cost for our communities.” “We need a commitment to jobs.”

“We need local solar way beyond half a percent and decisively toward 100% renewable energy.”

“This is the long term vision we can get behind, not short term profits.”

“If PECO won’t act voluntarily, PUC should require them to do so.”

Turn a crisis into an opportunity

“Electrification of vehicles and heating systems is key. “PECO would be able to promote grid electricity rather than distributed generation. “It’s the smartest thing a utility can do for their own success. “Take DSP V as an opportunity, instead of rolling along with the bare minimum. “We need Exelon to pledge to 100% renewable energy. 

A former administrative judge called in simply to state… “people have already said my feelings about this.”  

the AEPS mandate is merely the minimum amount of renewable generation. PECO is free to exceed that standard while we wait for the state mandates to catch up.

And the closing statement was a call to PECO, reminding them that “This is your job, to provide energy.” “That this is just a DSP plan, just do it. “That we are willing to work with you on this; it shouldn’t be a matter of agony.  “That the CAISO [California Independent System Operator, equivalent to our PJM] was at 30% renewable energy today, and that nearby New Jersey was a 4% solar 4 years ago. What are we waiting for? 

Legislation or PUC mandate? 

Image credit: peco.com, note lack of reference to renewable sources

PECO lawyers tried to distract from the public’s call for more clean energy by claiming that legislation is needed for PECO to increase the amount of clean energy in the DSP. Although legislation to require PECO to increase its clean energy would be welcome, it is absolutely untrue that PECO cannot act until such legislation is passed.

There was a discussion about HB 1195 introduced by Reps Comitta & McCarter that would mandate more electricity from renewable sources. We can do so by mandating that our electric utilities increase the amount of electricity they generate from renewable sources, via Pennsylvania’s Alternative Energy Portfolio Standards (AEPS). The AEPS is a mandate from the state requiring electric utilities to supply a percentage of their electricity from alternative sources, renewable sources such as solar, wind, geothermal and hydropower. Currently, we require our utilities to generate only 8% of our electricity from renewables. Only 8% by 2021. 

This bill, HB 1195, would raise the renewable energy targets in our AEPS from 8% to 30% by 2030. Note that the AEPS mandate is merely the minimum amount of renewable generation. PECO is free to exceed that standard while we wait for the state mandates to catch up.

There were also references to HB 1314 introduced by Rep Bullock that would allow PECO to get into the electricity generation business (they’re now only in the electricity distribution business) by authorizing a variant of Community Solar for low income customers. Though there was mention of Community Solar, there seemed to be different understandings of what this could mean, including some new vocabulary such as “energy democracy,” and “community ownership & control”. 

The most comprehensive bill mentioned was HB 1425 introduced by Rep Rabb, that would transition the state to 100% renewable energy by 2050. 

“These are all good bills, and complementary to other bills. “What we need to do is to change the landscape of electricity generation. “It’s nice to support legislation, but if it can’t pass, we need to support other options, like convincing the PUC and our utility what their customers need and demand today. 

What’s next? 

A week later, testimony from expert witnesses was submitted; notably from 

  • Steven Estomin of Exeter Associates, for the PA Office of Consumer Advocate (OCA);
  • Barbara Alexander of Barbara Alexander Consulting, for the PA Office of Consumer Advocate (OCA);
  • Brian Kalcic of Excel Consulting, for the PA Office of Small Business Advocate (OSBA);
  • Travis Kavulla of NRG Energy, for the Electric Supplier Coalition (ESC), representing these 7 electric generation suppliers (EGS) — NRG Energy, Direct Energy Services, Interstate Gas Supply (IGS Energy), Vistra Energy, Shipley Choice, ENGIE Resources, WGL Energy Services; 
  • Philip Bertocci of Community Legal Services, for Tenant Union Representative Network (TURN) & Action Alliance of Senior Citizens of Greater Philadelphia; 
  • Harry Geller of Pennsylvania Utility Law Project (PULP), for Coalition for Affordable Utility Services & Energy Efficiency in PA ( CAUSE-PA) and 
  • Karl Rabago of Rabago Energy, for the environmental stakeholders.

Karl Rabago’s testimony comprehensively analyzes the proposed DSP and identifies its deficiencies and discriminatory barriers to renewable energy. 

image credit: Wikipedia

Philip Bertocci did a good job questioning the utility’s proposal to re-allow low income customers enrolled in the customer assistance program (CAP) to shop for alternative suppliers; showing that there would be no price protection for this segment of customers.

Travis Kavulla proposed “(i) taking steps to transition PECO out of the default service role; (ii) adopting PECO’s proposed time of use rate in tandem with implementing the ability of suppliers to issue consolidated bills to customers and requiring PECO to make several modifications to this product; (iii) rejecting PECO’s proposal to solicit new ten-year contracts for solar alternative energy credits; (iv) rejecting PECO’s proposal for the recovery of network integration transmission service costs; (v) making changes to PECO’s proposed rate design for default service so that it contains all of the cost components incurred to provide default service; (vi) rather than simply continuing the existing Standard Offer Program (“SOP”), seizing an opportunity to implement improvements that might encourage greater participation by suppliers and consumers; and (vii) avoiding structuring PECO’s proposed plan for shopping by low- income customers in a way that is unduly restrictive and contains elements that would create new challenges for suppliers in their interactions with consumers.”

In late July, all the experts in the case will be cross examined. Following this, there will likely be a ruling by the PUC sometime this September or October. 

Stay tuned! We’ll be adding comments to this post as we hear of developments.

References


Lat updated: June 26, 2020

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s