Customer Assistance Programs / Universal Service Charge

Issue:

On November 6, 2019 the Public Utility Commission issued a final policy statement in Docket M-2019-3012599. In this policy statement the Commission, “hereby adopts the following changes to the CAP Policy Statement, subject to the requisite implementation processes through the amended CAP Policy Statement adopted by this Order and/or utility-specific proceedings.” One of the changes has the potential for significant cost shift to industrial customers:

“17.  Utilities should be prepared to address recovery of CAP costs (and other universal service costs) from any ratepayer classes in their individual rate case filing.[15]

[15]  We are not making a final precedential decision regarding cost recovery in this docket. “

The total program cost are in the order of $400 million.  Therefore this could result in a significant cost increase to industrial and large energy users. 

IECPA Position:

IECPA supports utility rates based on cost of service - meaning the cost to serve each customer class should be collected from that customer class. Therefore these residential customer assistance program costs should continue to be recovered within the residential class.

Details:

At the end of March 2018, the Commission issued a Secretarial Letter announcing the formation of a statewide Universal Service Workgroup in order to further discuss and provide ongoing recommendations relating to the future framework and structure of Universal Service and Energy Conservation Programs. Although none of the prior Orders or secretarial letters in the CAP Affordability docket (or the most recent stakeholder meetings) spoke to or invited comment on the issue of cost allocation and recovery, the issue was raised in the comment process for that docket in May 2019 by the Office of Consumer Advocate and low-income advocates. The individual utility Industrial Groups and Penn State University submitted comprehensive responsive arguments also in May, but those arguments were to no apparent avail, as it appears that this issue is high on the agenda for Vice Chairman Sweet and Commissioner Place.

IECPA will be evaluating the Final Policy Statement Order, with a focus on the single element of the Motion addressing the cost allocation and recovery issue. To reiterate, however, although the Motion may portend of the Commission’s willingness to entertain a socializing of US/CAP costs, the issue would need to be raised in a future utility rate case in which it would be fully litigated with all the process that is due, preserving the opportunity for IECPA to participate.