PENNSYLVANIAPUBLIC UTILITY COMMISSION

Harrisburg, PA 17105-3265

Public Meeting held April 15, 2010

Commissioners Present:

James H. Cawley, ChairmanTyrone J. Christy, Vice Chairman, DissentingWayne E. Gardner

Robert F. Powelson

PPL Electric Utilities Corporation Retail Markets Docket Number:M-2009-2104271

OPINION AND ORDER

BY THE COMMISSION:

By Tentative Order entered at this Docket on May 15, 2009, the Commission

addressed a number of actions that PPL Electric Utilities Corporation (“PPL”) should implement

when its generation rate cap expired at the end of 2009. These actions were designed to

minimize barriers to retail competition in PPL’s service territory pursuant to our authority under

the Electricity Generation Customer Choice and Competition Act (Competition Act), 66 Pa. C.S.

§§ 2801-2812. The adoption of a statewide Rate Ready billing option was addressed, which

would require PPL to add that option to the implementation of Bill Ready billing. (Tentative

Order, May 15, 2009, p. 13)

In our final Opinion and Order at this Docket, entered August 11, 2009, we

reiterated that Rate Ready billing promotes competition and we directed PPL to lead a sub-team

of the Electronic Data Exchange Working Group (“EDEWG”) to develop a process and timeline

for implementation of Bill Ready and Rate Ready billing statewide. (Opinion and Order, entered

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August 11, 2009, p. 20) We referred other market transition issues to the Retail Markets

Working Group (“RMWG”) for discussion and reporting. (Opinion and Order, entered

August 11, 2009, Ordering paragraph 5, p. 34) These issues included customer referral

programs, provisions for billing services not covered by purchase of receivables programs, and

customer shopping education efforts by Electric Distribution Companies (“EDCs”) and the

Commission.

Background

“Bill Ready” means the company doing the billing receives calculated results

from the non-billing party for its charges for printing on a consolidated bill. “Rate Ready”

means the company doing the billing knows the rates of the other party, calculates its charges,

and prints these charges on a consolidated bill. (Electronic Data Exchange Standards for Electric

Deregulation in the Commonwealth of Pennsylvania Revised Plan v2.6, p. 13)

EDCs offer either Rate Ready or Bill Ready as a single billing option. One or two

EDCs offer some form of both billing options. PPL and PECO Energy Company (“PECO”) are

the only two EDCs offering Bill Ready billing exclusively. In our decision to adopt Rate Ready

billing statewide, we did not want to preclude any EDC from continuing to offer Bill Ready

billing if it was already being provided. (Opinion and Order, entered August 11, 2009, p. 20) To

achieve a smooth transition for the industry, we directed EDEWG to consider the

recommendations of the sub-team effort led by PPL and to file a plan for Rate Ready billing for

final consideration and action.

(Order and Opinion, entered August 11, 2009, pp 20-21)

On September 8, 2009, PPL convened a sub-team of EDEWG (“Team”). EDC

participation included Allegheny Power (West Penn Power), Duquesne Light Company, First

Energy (Met-Ed, Penelec, and Penn Power), PECO, and PPL. Electric Generation Supplier

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(“EGS”) and Electronic Data Interchange (“EDI”) Service Provider1 participation comprised

ConEdison Solutions, Direct Energy, Dominion Retail, e:SO, ESG, FirstEnergy Solutions,

Liberty Power, MXenergy Electric Inc., PPL Solutions LLC, SJ Industries, Exelon Energy,

Systrends Inc., and UGI Energy Services.

The Team held regularly scheduled teleconference meetings three times per week

and held three face-to-face meetings in September and October of 2009. During this time, some

of the participating EGS representatives on the Team met separately and compiled a list of

desirable Rate Ready business requirements. EDI Service Providers coordinated separate calls

with their clients prior to Team meetings. (EDEWG Sub Team Report Regarding Rate Ready

Billing, p. 2)

The Team distributed a draft document to EDEWG on November 2, 2010, for

review and consideration. At its regularly scheduled monthly meeting held November 5, 2009,

EDEWG discussed the document. The document was modified and finalized, and on

November 9, 2009, EDEWG filed its report (“EDEWG Report”) in compliance with the

Commission’s directive. (EDEWG Meeting 11/5/2009 Minutes, approved EDEWG Meeting

12/3/2009)

Statement of Issues

The EDEWG Report, which is attached to this Opinion and Order, addresses three

primary concerns related to the Commission’s directive. Firstly, the EDEWG Report states that

the Commission set an overly aggressive timeline of 90 days to complete its task. (EDEWG

Report, cover letter dated November 9, 2009) Secondly, the EDEWG Report indicates that the

assigned task required EDEWG to focus on policy and business practices that are outside of their

scope and mission. (EDEWG Report, cover letter dated November 9, 2009) Finally, the

1 EDI is the process of sending and receiving electronic business documents between companies. EDI is commonly used instead of faxing and mailing paper documents.

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EDEWG Report questions whether the Commission’s directive to PPL also applied to other

EDCs. (EDEWG Report, pp 1-2)

The EDEWG Report cites page 2 of the Commission’s Order entered August 11,

2009, stating that, while the Order’s directives “can form a template used by the other EDCs in

the Commonwealth, [the Commission] was not mandating such use…” and accordingly, EDCs

interpreted our Order as applying directly to PPL. (Report, pp 1-2) The EDEWG Report states

that other EDC participants will decide, on a case-by-case basis, which aspects of the group’s

findings to implement dependent upon system capabilities and pre-existing business practices.

(EDEWG Report, p.1) Additionally, the EDEWG Report emphasizes that the Rate Ready

solution requirements proposed for PPL and PECO are completely independent of one another,

that other EDCs with existing Rate Ready programs do not intend to modify their programs as

outlined in the EDEWG Report, as their participation on the Team was advisory and did not

represent consensus. (EDEWG Report, p. 2)

The EDEWG Report refers to PPL and participating EGSs and EDI Service

Providers as the “Consensus Group” with respect to the recommendations and plans outlined

therein. (EDEWG Report, p. 1) The Team clarifies in the EDEWG Report that “it is not the

intent of this document to serve as a final requirements document that outlines every action

required to support a Rate Ready model for every EDC,” that the EDEWG Report “outlines the

high level business practices and system functionality required to implement Rate Ready billing

based on decisions reached by the Consensus Group.” (EDEWG Report, p. 1)

Additionally, the EDEWG Report includes an implementation timeline, as

directed, along with a cost estimate for PPL and PECO. (EDEWG Report, pp 7-8) PPL

estimates the cost of a fully automated Rate Ready billing system at $1.3 million and sets an

implementation deadline ending the third quarter of 2010. (EDEWG Report, p. 7) The EDEWG

Report notes that a shorter deadline for PPL to implement the Rate Ready plan would increase

costs. (EDEWG Report, p. 7) PECO estimates a budget of $3.3 million for an 18-month

implementation time frame. (EDEWG Report, p. 8)

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Disposition of Issues

In response to the first issue, we acknowledge that the timeline we set for

EDEWG to complete its work was aggressive. PPL’s rate caps were soon to expire on

December 31, 2010, and we had full confidence in the ability of EDEWG to work through the

technical details with PPL to find a reasonable solution within this time frame.

EDEWG was concerned that our directive was outside of its scope and we agree,

in part. We disagree that our directive to EDEWG was to decide policy issues. The intent of our

directive was for EDEWG to focus on the technical parameters of PPL’s Rate Ready proposal

for implementation statewide. We anticipated deciding this policy issue after review and

consideration of the EDEWG Report. Policy discussions are not within the purview of EDEWG

technical expertise. While policy issues clearly rose during EDEWG discussions as evidenced

by comments within the EDEWG Report (EDEWG Report cover letter and p. 1), we can only

surmise that Commission clarification of the issues was not sought due to the sense of urgency

felt by EDEWG to comply with our 90-day deadline. We agree that the development of a

statewide billing option requires input from all parties in a deliberate fashion.

In as much as the EDEWG Report does provide a consensus plan for PPL Rate

Ready billing, we direct PPL to implement it and to adhere to its proposed deadline of September

30, 2010. Additionally, we shall refer to the RMWG the issue relating to the use of the EDEWG

Report as a statewide business model. It is appropriate that the RMWG discuss this issue due to

the fact that provisions for billing services not covered by purchase of receivables programs were

referred to the RMWG and that Rate Ready billing belongs in this category. (Opinion and Order,

entered August 11, 2009, Ordering paragraph 5, p. 34)

In developing its recommendation, the RMWG shall consider: (1) EGS business

needs for a uniform approach to Rate Ready billing; and (2) EDC billing system capabilities to

respond to this approach. We direct the RMWG to report to this Commission no later than 90

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days of the entered date of this Order. We also direct that Commission Staff submit an

independent recommendation to the Commission following its receipt and review of the RMWG

report.

Regarding PPL’s proposed estimated budget of $1.3 million to implement the

Rate Ready billing option, we shall deny cost recovery without prejudice at this time. We

maintain our previous decision relating to PPL’s request to defer costs on its books for future

recovery. (Opinion and Order, entered August 15, 2009, p. 33) As PPL begins to actually incur

any costs and can estimate the magnitude and longevity of any costs, it may file to defer them for

recovery. (Opinion and Order, entered August 15, 2009, p. 33) THEREFORE,

IT IS ORDERED:

1. That the EDEWG Report shall be adopted for implementation of Rate

Ready billing exclusively by PPL Electric Utilities Corporation;

2. That PPL Electric Utilities Corporation is authorized to complete

implementation of the Rate Ready billing option in the manner and timeline as described in the

EDEWG Report;

3. That the issue relating to the use of the EDEWG Report as a statewide

business model, be referred to the Retail Markets Working Group, which shall prepare a report to

be submitted to the Commission within 90 days of the entry of this Order;

4. That Commission Staff prepare an independent recommendation to the

Commission following receipt and review of the Retail Markets Working Group report

referenced in Ordering Paragraph 3;

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5. That a copy of the EDEWG Report and this Opinion and Order be served

upon all Electric Distribution Companies, Electric Generation Suppliers, Small Business

Advocate, Office of Consumer Advocate the Retail Markets Working Group, and the Electronic

Data Exchange Working Group.

BY THE COMMISSION,

James J. McNultySecretary

(SEAL)

ORDER ADOPTED: April 15, 2010

ORDER ENTERED: April 19, 2010

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