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Pennsylvania approves Peco plan to offer hourly rates to encourage customers to shift usage to off-peak periods

  • Dec 4, 2020 8:22 am GMT

Pennsylvania regulators on Thursday set the foundation for Peco to launch an hourly pricing plan in 2022 for retail customers, including deep discounts for overnight usage that might incentivize the wider adoption of electric vehicles.

The Pennsylvania Public Utility Commission approved a formal plan allowing the Philadelphia utility to roll out “time-of-use” rates for customers, which would discount electricity consumed at night to encourage customers to shift usage to off-peak hours. The plan would be voluntary.

Hourly rates were supposed to be one of the benefits that Peco customers would receive from the utility’s adoption of smart-meter technology, which provides the utility with constant Pot at the end of the rain for Peco’s default service customers, which includes the majority of small retail customers who don’t buy their electricity supply through third-party suppliers. Spells out a plan for “time-of-use” rates

PECO’s TOU Rates will be available to residential and small commercial default service customers with smart meters configured to measure energy consumption in watt-hours. However, customers enrolled in the Company’s Customer Assistance Program (“CAP”) will not be eligible for the residential TOU Rate during the Revised DSP V term to avoid potential adverse impacts on CAP benefits.



Before the Pennsylvania Public Utility Commission (Commission) for consideration and disposition is the Petition of PECO Energy Company (PECO or the Company) for approval of its Default Service Program (DSP). I would like to take this opportunity to commend PECO for its inclusion of long-term contracts within its proposed default service portfolio. Anyone who has followed my votes on default service proceedings will know that the inclusion of long-term contracts, or the substantiation of omitting long-term contracts, has been a key factor in my review in these proceedings. Here PECO proposes four separate procurements of unbundled solar alternative energy credits in the amount of 4,000 per year over 10 years. Further, the Company’s plan includes one-year fixed price, two-year fixed price, hourly-priced, and spot-priced energy products. Taken together, I believe this portfolio meets the requirements under 2807(e) of the Public Utility Code. Also, I would like to highlight PECO’s proposed Time-of-Use (TOU) rate design for residential and small commercial customers. The Company proposes an optional TOU design which remains static all year long. The TOU design includes three tiers of rates: o Peak – from 2 p.m. to 6 p.m. Monday through Friday, o Super off-peak – from midnight till 6 a.m. every day, and o Off-peak for all other hours. Establishing effective TOU rates within electric distribution companies’ default service programs has proven challenging. It will be exciting to see how PECO’s novel proposal will be received. I am particularly interested in how electric vehicle owners may utilize this design, given the super off-peak rates during the overnight charging hours. In conclusion, I am pleased to offer my support for these proposals.

PECO agrees to host a collaborative meeting 120 days before launching its TOU rate to provide an overview of PECO’s outreach and education materials and to allow stakeholders to comment on those material

enviro stakeholders: Sierra Club, Pennsylvania Chapter, Clean Air Council, and the Philadelphia Solar Energy Association. represented by Earthjustice

had pressed peco to include more long-term contracts in its default service, which it said would be more conducive to promoting renewable energy producers.

d that although PECO’s proposed TOU rate may produce some benefits, better results could be obtained through the development and piloting of additional TOU rates tailored to support heavy EV fleets and building electrification.

A unifying theme of the Environmental Stakeholders’ contentions in this Proceeding is that PECO can and should do more to ensure that the dollars ratepayers spend on default service return the most value possible. Energy markets have changed significantly in recent years, as renewable energy prices have fallen dramatically and EV and building electrification technologies have proliferated, but PECO’s default service procurement plan has remained essentially the same for almost ten years. 7 Moreover, stakeholders presented approximately six hours of testimony at the Public Input Hearing in this Proceeding in favor of finding ways to support increased levels of renewable energy in the default service supply mix.8 In light of Commission policy, market trends, and stakeholder preferences, it would be in the public interest to require PECO to improve its procurement plan in the ways recommended by the Environmental Stakeholders.


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