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Retail Energy Supply Association v. Pennsylvania Public Utility Commission

Commonwealth Court of Pennsylvania

May 2, 2018

Retail Energy Supply Association, Petitioner
Pennsylvania Public Utility Commission, Respondent

          Argued: December 6, 2017




         Deregulation of the electricity market under the Electricity Generation Customer Choice and Competition Act[1] (Choice Act), has permitted all residential customers of electric distribution companies[2] (EDC) in the Commonwealth to choose their electricity generation supplier[3] (EGS) and have that electricity distributed to them by the EDC in their area. Residential customers can contract with any licensed EGS, which may charge less than, or more than, the price-to-compare (PTC) or default price, which is the price the EDC charges residential customers, who choose not to shop, in order to supply them with electricity. However, for low-income customers, the Choice Act mandates that they have access to affordable electricity, including through low-income assistance programs. One such program is the Customer Assistance Program (CAP). The CAP allows low-income customers to pay a percentage of their bills, with the unpaid portion subsidized through a universal service charge that non-CAP customers pay. Over time, it became apparent that approximately half of the CAP customers of PPL Electric Utilities Corporation (PPL), who, like non-CAP customers, have had the unrestricted right to shop for their electricity supplier, were paying more than the PTC. As a result, non-CAP customers were paying more to subsidize the cost of supplying CAP customers with electricity, while CAP customers, whose subsidies are limited, were more quickly exhausting their subsidies. Those CAP customers who exhausted their subsidies were removed from the CAP and had to pay the entirety of their electricity bill. In order to address these issues, PPL, along with several other interested stakeholders, Pennsylvania Public Utility Commission's (PUC) Bureau of Investigation and Enforcement (I&E), the Office of Consumer Advocate (OCA), and the Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA), ultimately proposed that the right of CAP customers to shop for their EGS be restricted, limiting CAP customers to EGSs participating in the CAP-Standard Offer Program (CAP-SOP). The CAP-SOP requires an EGS participating in the CAP-SOP to agree to serve customers at a 7-percent discount off the PTC at the time of enrollment, with the price remaining fixed for 12 months. The CAP-SOP prohibits an EGS from charging an early cancellation or termination fee. Following an evidentiary hearing, PUC adopted PPL's proposed CAP-SOP in an October 27, 2016 Opinion and Order. Retail Energy Supply Association[4] (RESA) petitions for review of PUC's October 27, 2016 Opinion and Order, as well as PUC's January 26, 2017 Opinion and Order denying RESA's petition for rescission/amendment.[5]

         At the center of this appeal is whether PUC has the authority to adopt PPL's CAP-SOP and, if so, whether substantial evidence supports PUC's reasons for adopting it. In a previous case, Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania v. Pennsylvania Public Utility Commission (CAUSE-PA), 120 A.3d 1087');">120 A.3d 1087, 1103, 1107 (Pa. Cmwlth. 2015) (en banc), allocatur denied, 136 A.3d 982 (Pa. 2016), we held that PUC may "'bend' competition under the Choice Act" so as "to give way to other important concerns" such as "ensuring that universal service plans are adequately funded and cost-effective." In this case, we continue our examination of the extent to which PUC can "bend competition" by approving PPL's CAP-SOP.

         I. Background

         The Choice Act requires, "at a minimum, " that the Commonwealth "continue the protections, policies and services that now assist customers who are low-income to afford electric service." Section 2802(10) of the Choice Act, 66 Pa. C.S. § 2802(10). In furtherance of this policy, the Choice Act requires an EDC, such as PPL, to submit triennially for PUC approval a Universal Service and Energy Conservation Plan (USECP). Section 2804(15) of the Choice Act, 66 Pa. C.S. § 2804(15); 52 Pa. Code § 54.74(a)(1). "Universal service and energy conservation" (USEC) is defined as the "[p]olicies, protections and services that help low-income customers to maintain electric service." Section 2803 of the Choice Act, 66 Pa. C.S. § 2803. The term USEC includes CAPs, id., which are programs designed to help "low-income, payment troubled customers." 52 Pa. Code § 69.264. Specifically, a CAP is an "alternative collection method" whereby "CAP participants agree to make regular monthly payments that may be for an amount that is less than the current bill in exchange for continued provision of electric utility services." 52 Pa. Code § 54.72.

         Under PPL's current CAP program, known as the "OnTrack Program, " CAP residential customers can be enrolled in one of three payment plans. The majority of CAP customers are enrolled in the percent of bill plan, which uses a mathematical formula to determine the amount the CAP customer is expected to pay each month for the next 18 months regardless of the CAP customer's usage or the cost of energy (CAP bill). The difference between the CAP customer's CAP bill and the total bill that a non-CAP customer would have been required to pay based on usage and price per kilowatt-hour (kWh) is known as a CAP credit or CAP shortfall. Each CAP customer is allowed only a certain amount of credit over an 18-month period: for electric heat customers, the maximum CAP credit is $3, 328, and for non-electric customers, the maximum CAP credit is $1, 310. "CAP credits are reduced each month on a dollar for dollar basis." (Reproduced Record (R.R.) at 231a.) Thus, if a customer's bill without the CAP is $250, but his CAP bill is $200, the CAP customer is responsible for paying only $200. Id. The $50 difference or shortfall is deducted from the CAP customer's available maximum CAP credits. If a CAP customer exhausts all of his CAP credits before the expiration of the 18-month period, he no longer receives a CAP bill based on the ability to pay; rather he must pay his entire bill, regardless of its affordability. Non-CAP residential customers pay for the CAP credits through the Universal Service Rider, which PPL builds into its rates.

         Since 2010, both CAP customers, and non-CAP customers, have had the ability to shop for an EGS. CAP customers were "allowed to enter into any contract with any licensed EGS and pay any price for service regardless of whether that price [wa]s higher or lower than PPL's price to compare" or default service price, that is, the price a CAP customer would have paid had he not shopped.[6] (Id. at 234a.)

         In 2014, following PPL's filing of its 2014-2016 USECP, PUC concluded that CAP shopping was beyond the scope of the USECP proceeding and directed PPL to address CAP shopping as part of its next Default Service Program and Procurement Plan (DSP).[7] PPL petitioned PUC for the approval of its fourth DSP (DSP IV Program) from June 1, 2017, through May 31, 2021. PPL noted in its DSP Petition (Petition) that at its most recent base rate proceeding, PUC had approved a settlement agreement under which "the parties agreed to hold a collaborative on CAP shopping." (Id. at 102a, 120a.) Prior to the filing of the Petition, several collaborative meetings were held with interested stakeholders during which PPL provided data concerning its CAP customers who shopped for an EGS.

         Specifically, PPL's data showed as follows.[8] In 2013 and 2014, and up to October 31, 2015, the average monthly percentage of CAP customers who were shopping for an EGS was 46 percent in 2013, 51 percent in 2014, and 52 percent for 10 months of 2015. During that same time period, the percentage of CAP customers who selected an EGS with a price above the PTC was 67 percent, 50 percent, and 46 percent respectively. Over a 34-month period, January 2013 through October 2015, an average of 49 percent of CAP customers were shopping, and 55 percent of those shopping were paying above the PTC. PPL conducted an analysis by month from January 1, 2012, through October 30, 2015, and discovered that on average 9, 626 shopping CAP customers were paying above the PTC. During this time, the average PTC was $0.08475 per kWh. However, for those CAP customers paying above the PTC, the average price was $0.11048. Considering that the average CAP customer who paid above the PTC used 1, 197 kWh of electricity, PPL calculated that had these CAP customers not shopped and paid the PTC, they would have paid $31 less a month. This meant that each month, on average, CAP customers who paid above the PTC paid $298, 406 (9, 626 x $31) more than had they paid the PTC. Extrapolated over 12 months, the estimated impact on CAP customers paying above the PTC was $3, 580, 872.[9]

         PPL also analyzed CAP customers who paid at or below the PTC from January 1, 2012, through October 30, 2015. PPL discovered that on average 7, 750 CAP customers were paying at or below the PTC. During this time, the average PTC was $0.08475, while these CAP customers paid an average of $0.07772. Considering that the average CAP customer who paid at or below the PTC used 1, 294 kWh, PPL calculated that these customers saved $9 a month by shopping instead of paying the PTC. This meant that each month, on average, CAP customers who paid at or below the PTC saved $69, 750, which, when extrapolated over 12 months, resulted in estimated savings of $837, 000.

         Considering these two groups together, the net financial impact was $228, 656 or, extrapolated over 12 months, $2, 743, 872. Based on this data, PPL concluded that two harms were occurring as a result of CAP shopping: first, CAP customers who paid above the PTC were exceeding their CAP credits at a faster pace, which put them at risk of being removed from the CAP, [10] and, second, non-CAP customers, who subsidize the CAP customers, were bearing the increased CAP costs.

         Based on the ongoing harms, PPL believed that some limits on CAP shopping should be developed.[11] However, while PPL considered various CAP shopping proposals that had been offered during the collaborative, PPL initially recommended, for a variety of reasons, that PUC "promptly initiate a statewide collaborative open to all interested stakeholders and/or initiate a new rulemaking proceeding to address these CAP shopping issues on a uniform, statewide basis." (Id. at 112a.) As a temporary measure, PPL proposed that CAP customers be encouraged to participate in PPL's Standard Offer Referral Program (the traditional SOP). The traditional SOP is available to all residential customers, including those enrolled in PPL's CAP.[12] The traditional SOP allows customers to receive electricity from an EGS at a seven percent discount from the then-effective PTC for one year and does not permit an EGS to charge a termination or cancellation fee. Until a uniform, statewide solution could be developed, PPL proposed that any customer who either inquired about the CAP or other low-income programs or is enrolled in the CAP be advised about the availability of the traditional SOP, including its terms and conditions.

         Other parties interested in PPL's DSP IV Program submitted their own proposals on how to mitigate the harm resulting from CAP shopping. OCA proposed, inter alia, that PPL implement a program rule enforced by PUC whereby EGSs who seek to serve CAP customers, if at all, must do so at a rate equal to or below the PTC or, in the alternative, since PPL bills and collects for EGSs, PPL could notify an EGS and the customer when a price is charged that is higher than the PTC.[13] CAUSE-PA proposed, inter alia, that PPL create structures prohibiting CAP customers from contracting with EGSs for a price that would be higher than the PTC at any time or for early cancellation or termination fees.[14] RESA submitted rebuttal testimony opposing the proposals of both OCA and CAUSE-PA. RESA opposed restrictions on the type of offers an EGS might provide to CAP customers simply because of their enrollment in the CAP. RESA asserted that it was inappropriate to rely solely on the PTC in determining what constitutes an appropriate price because a CAP customer might choose a certain EGS product because of price certainty or because of "value-added products."[15] (Id. at 323a.)

         In rebuttal testimony, PPL produced data showing that since the inception of the SOP, on January 1, 2010, to November 30, 2015, "the PTC has typically been higher than the SOP 7% discount rate, and the PTC has decreased by more than 7% from the prior PTC on only four occasions."[16] (Id. at 314a.)

         In rebuttal testimony, CAUSE-PA expressed concerns with PPL's proposal to encourage CAP customers to use the traditional SOP, in that, while a CAP customer would receive an initial seven-percent discount off the PTC at the time of enrollment with the price fixed for 12 months, there was no guarantee that this price would stay below the PTC for the duration of the contract.[17] This is because the PTC can change on June 1 and December 1. Thus, CAP customers needed to be insulated from the effects of fluctuations in the PTC.

         In sur-rebuttal testimony, CAUSE-PA proposed that PPL use a modified version of the traditional SOP, the CAP-SOP, as the only vehicle that a CAP customer could use to select an EGS.[18] An EGS participating in the CAP-SOP would have to agree to serve CAP customers at a seven-percent discount off the PTC at the time of enrollment and, if the PTC dropped more than seven percent at any time during the CAP customer's enrollment, to either re-enroll the CAP customer as a new CAP-SOP enrollee with a seven-percent discount off the then-applicable PTC or return the CAP customer to default service. The CAP customer would be able to leave the CAP-SOP contract at any time without a termination or cancellation fee. At the end of the 12-month CAP-SOP contract, an EGS would be required to either re-enroll the CAP customer in a new CAP-SOP contract that is a seven-percent discount off the then-applicable PTC or, if the EGS decides to stop serving CAP customers, the CAP customer would be returned to default service. A CAP customer would not be permitted to enroll in an offer that does not comply with the CAP-SOP.

         RESA opposed CAUSE-PA's proposed CAP-SOP.[19] RESA argued that if an EGS is required by the CAP-SOP "to offer a discount to a future unknown price, " because every six months the PTC can change, an added risk of providing service to CAP-SOP customers exists.[20] (Id. at 409a.) RESA noted that the traditional SOP for non-CAP customers has a fixed 12-month price, but that price must be a seven-percent discount off the PTC at the time of enrollment, and not for the entire length of the contract; an EGS is not obligated to drop the price if the PTC drops. (Id. at 408a.) Given this, RESA believed that "few, if any, EGSs, will choose to participate in the [CAP-]SOP." (Id. at 409a.) In addition, CAUSE-PA's CAP-SOP would effectively eliminate a CAP customer's ability to shop for competitive electricity supply because CAP customers would be limited "to electing just one product available in the market." (Id. at 410a.) However, since no EGS would be willing to serve CAP customers on that product, CAUSE-PA's CAP-SOP "would have the practical effect of eliminating shopping for all CAP customers." (Id.)

         PPL found CAUSE-PA's proposal to be a "significant improvement" over its original proposal.[21] (Id. at 400a.) PPL, however, suggested some modifications to CAUSE-PA's proposal. CAUSE-PA's proposal, PPL noted, essentially required an EGS to guarantee that a CAP customer would receive the seven-percent discount off the PTC for the entire 12-month contract. This would be problematic because the PTC changes every six months, and, thus, an EGS would have "to agree to an entirely unknown rate for a 12-month period." (Id. at 401a.) Thus, PPL proposed that an EGS participating in the CAP-SOP agree to serve customers at a seven-percent discount off the PTC at the time of enrollment, with the price remaining fixed for 12 months. Following PPL's modifications to the CAP-SOP, PPL offered its CAP-SOP as the Joint Litigation Position of CAUSE-PA, OCA, and I&E. Thus, these parties abandoned their original CAP shopping proposals. PPL's proposed CAP-SOP was, in pertinent part, as follows:

4. The Joining Parties agree that, until a uniform, statewide solution to CAP shopping can be developed, PPL Electric shall implement a CAP Standard Offer Program ("CAP-SOP"), effective June 1, 2017, with the following features designed to help mitigate the impacts that CAP shopping can have on CAP credits, risk of early removal from the OnTrack program, and the CAP costs that are paid for by other Residential customers through the Universal Service Rider:
(a) The CAP-SOP is the only vehicle that a CAP customer may use to shop and receive supply from an EGS.
(b) Any CAP customer shopping request that does not get processed through the CAP-SOP will be denied.
(c)EGSs participating in the CAP-SOP must agree to serve customers at a 7% discount off the PTC at the time of enrollment. This price shall remain fixed for the 12-month CAP-SOP contract unless terminated earlier by the customer.
(d) CAP customers may terminate the CAP-SOP contract at any time and without any termination or cancellation fees or other penalties.
(e) A CAP customer who terminates a CAP-SOP contract or whose CAP-SOP contract reaches the end of its term can re-enroll in the CAP-SOP.
(f) At the conclusion of a 12-month CAP-SOP contract, the CAP customer will be returned to the CAP-SOP pool and be re-enrolled in a new CAP-SOP contract, unless the CAP customer requests to be returned to default service or is no longer a CAP customer.
(g) EGSs must enroll separate from the standard SOP to be a participating supplier in the CAP-SOP. EGSs would be free to voluntarily elect to participate in none, one or the other, or both the traditional SOP and the proposed CAP-SOP. Enrollment will be for a three-month period, and shall conform to the enrollment process for the standard SOP. EGS may opt in to participate in the CAP-SOP on a quarterly basis, and are free to leave the CAP-SOP on a quarterly basis.

         5. For the purpose of transitioning CAP customers who are shopping as of the CAP-SOP June 1, 2017 effective date:

(a) All CAP customer shopping fixed-term contracts in effect as of the effective date of the CAP-SOP will remain in place until the contract term expires and/or is terminated.
(b) Once the existing CAP customer shopping contract expires or is terminated, the CAP customer will have the option to enroll in the CAP-SOP or return to default service, but in any event will only be permitted to shop through the CAP-SOP.
(c) PPL Electric will revise its CAP recertification scripts/process so that all existing CAP shopping customers receiving generation supply on a month-to-month basis after June 1, 2017 will be required at the time of CAP recertification to enroll in the CAP-SOP or return to default service, but in any event will only be permitted to shop through the CAP-SOP.

(R.R. at 418a-20a.)

         Following the close of all evidence, [22] the administrative law judge (ALJ) issued her Initial Decision, which, inter alia, recommended adoption of PPL's CAP-SOP with one modification. (PUC Opinion (Op.) and Order at 4, Oct. 27, 2016.)

         RESA filed Exceptions to the ALJ's Initial Decision, arguing that the proponents of restricting CAP shopping had not satisfied their burden of proof, the ALJ failed to properly analyze the alternatives to restricting the right to shop presented in the record, and the ALJ erroneously relied on the data that was presented as sufficient to justify restricting shopping. RESA also argued that even if the proponents had met their burden of proof, PPL's CAP-SOP would not succeed because no EGSs would be willing to participate.

         PUC, in its Opinion and Order, denied RESA's Exceptions to PPL's CAP-SOP.[23] (Id. at 67.) PUC concluded that the parties supporting PPL's CAP-SOP met their burden of proof. (Id. at 40, 53.) PUC wrote, in pertinent part, as follows:

We find that the Joint Parties have met their burden of proof that the CAP-SOP proposal has merit and that [PUC] should adopt this proposal on an interim basis. We do not come to this conclusion lightly, as [PUC] has been steadfast in its support of the competitive electric generation market in Pennsylvania. However, based upon the substantial and unrefuted evidence presented by PPL in this proceeding, it is incumbent upon [PUC] to address this matter in a reasonable and prudent fashion to balance the competing objectives within the [Choice] Act. It is vitally important that the existing CAP programs be administered in a financially responsible fashion consistent with our obligations under the [Choice] Act to foster competitive electric markets.
We conclude that our decision to approve the CAP-SOP is consistent with the Commonwealth Court's decision in CAUSE-PA. In that case, the Court held that we have the authority under Section 2804(9) of the [Choice] Act, for the purpose of ensuring that universal service plans are adequately funded and cost-effective, to approve CAP rules that would limit the terms of an offer from an EGS which a customer could accept and remain eligible for CAP benefits. CAUSE-PA [120 A.3d] at 1103. . . . In this case, the Parties presented substantial evidence in support of the proposed CAP-SOP, as well as evidence regarding why other alternatives would not be reasonable. The data provided by PPL in this proceeding demonstrated the economic harm experienced as the result of unrestricted CAP customer shopping decisions. The identified economic harm affects the ability of CAP customers to remain on CAP, as higher costs result in quicker erosion of the CAP customers' limited allocation of CAP credits and also affects non-CAP customers by increasing the subsidy they incur to support the universal service objectives within the [Choice] Act. We find that this unrefuted evidence is sufficient to permit [PUC] to impose CAP rules that may partially restrict or limit the ability of these customers to shop for electricity. In essence, we agree with the ALJ that mitigation is required to balance the interests between shopping and non-shopping customers. The CAP-SOP proposal of the Joint Parties, however, does not eliminate the ability of these customers to participate in the competitive marketplace. To the contrary, these customers will retain the ability to shop by participation in a form of the SOP, which provides a 7% discount off the PTC price in effect at the time of enrollment, which has been determined to be very successful in Pennsylvania since its inception.
Next, in consideration of RESA's position that there are several reasonable alternatives available in lieu of the proposed CAP-SOP option, we are in agreement with the ALJ that it is not feasible to require the Joint Parties to identify all possible alternatives. Rather, we find that several alternatives were, in fact, considered by the Parties, but that they ultimately determined that the Joint Litigation Position was the most reasonable such alternative. We conclude that none of the alternatives suggested by RESA are acceptable alternatives. We further agree with the ALJ that RESA's recommendation to impose no restrictions on CAP shopping and to only encourage CAP customers to use the SOP if they do shop is simply insufficient. We conclude that this recommendation fails to protect CAP shoppers from the negative effects of paying more than the PTC and maximizes the burden on other Residential customers who fund the CAP program and, as such, is not a viable alternative.
Therefore, we shall adopt the Joint Litigation Position[.]

(Id. at 53-56 (emphasis added) (footnote omitted).)

         Next, PUC rejected RESA's argument that if PPL's CAP-SOP was adopted, EGSs would not participate. (Id. at 56, 66.) Considering that there is extensive EGS participation in the traditional SOP, PUC found RESA's argument to be "speculative" with "no basis whatsoever in the record." (Id. at 66.) PUC noted that PPL's CAP-SOP included a provision that the parties would have the ability to petition PUC to reopen the CAP-SOP in the event that there was no EGS participation and/or changes in retail market conditions that justified reopening the CAP-SOP. (Id.) Based on the foregoing, PUC adopted PPL's CAP-SOP. (Id. at 69-71.)

         RESA then petitioned for rescission/amendment of PUC's October 27, 2016 Opinion and Order. RESA argued that PUC erred as a matter of law by not conducting a legal analysis of whether the alternatives to PPL's CAP-SOP, such as PPL's initial proposal to encourage its CAP customers to use PPL's traditional SOP, were reasonable. PPL's CAP-SOP, RESA argued, amounts to governmental slamming. PUC also erred in failing to properly weigh the evidence in the record showing that PPL's CAP-SOP would eliminate EGS participation in the CAP. Finally, RESA argued that if PUC decided to restrict shopping via PPL's CAP-SOP, PUC should remand the matter to the ALJ so that a full record could be developed on other reasonable alternatives that may exist.

         PUC declined to reconsider its October 27, 2016 Opinion and Order, concluding that RESA had not raised any new or novel arguments nor any that PUC had not already considered and rejected. (PUC Op. and Order at 17-19, Jan, 26, 2017.)

         II. Discussion[24]

         A. PUC's Authority to Restrict CAP Customers Right to Shop

         1. Contentions of the Parties

         RESA argues that the clear and unambiguous language of the Choice Act requires that all customers of EDCs have the opportunity to purchase electricity from their choice of EGSs, but PPL's CAP-SOP does not allow CAP customers to have direct access to the competitive market or give them the opportunity to purchase electricity from their choice of EGSs. Indeed, PPL's CAP-SOP does not involve any shopping at all. Moreover, CAP customers cannot choose their EGS. Rather, CAP customers can only receive services from those EGSs who decide to participate in PPL's CAP-SOP. Even then, CAP customers do not select the EGS which serves them but are placed in a pool and assigned a participating EGS.

         RESA adds that PUC exceeded its authority under the Choice Act by mandating the price terms for CAP customers. For an EGS, "the only avenue available . . . to serve PPL's CAP participants is to pay a $28 per customer referral fee and serve customers for 12 months at a mandatory 7% discount off the PTC at the time of enrollment, with no early cancellation fees." (RESA Brief (Br.) at 27.) The Choice Act is clear, as is this Court's decision in CAUSE-PA, that PUC lacks the statutory authority to regulate EGS prices. While acknowledging that CAUSE-PA may permit a rate ceiling, RESA argues that PPL's CAP-SOP goes beyond a rate ceiling. A rate ceiling would allow an EGS some flexibility to offer products within a price range and provide "value added products and services." (Id. at 31.) Here, however, rather than being a rate ceiling, PPL's CAP-SOP, because it permits a participating EGS to offer only a single price at seven-percent off the PTC, is "the ceiling, walls and floor." (Id.)

         RESA also argues that PUC's approval of PPL's CAP-SOP exceeds PUC's authority under the Choice Act in that the CAP-SOP forces CAP customers "who have affirmatively exercised their right to select an EGS to return to the EDC for default service." (Id. at 22-23.) Since CAP customers would be forced to return to default service without their consent, this constitutes "governmental slamming, " which EGSs themselves are prohibited from doing.[25] (Id. at 23-24.).

         PUC responds that under the Choice Act and this Court's decision in CAUSE-PA, PUC has the authority - indeed, the duty - to regulate EGSs serving CAP customers. This Court, in CAUSE-PA, PUC contends, said that PUC has the obligation to ensure that rates are just and reasonable, and that under certain circumstances, unbridled competition must give way to other important concerns, such as ensuring that the CAP is administered in a cost-effective manner for both CAP and non-CAP customers so that low-income customers may continue to have access to electric service. Therefore, PUC concludes, it has the authority to bend competition by imposing price limits on EGSs serving CAP customers. The Intervenors[26] add that PPL's CAP-SOP does not set EGS prices because the participation of an EGS in the CAP-SOP is entirely voluntary. PPL separately argues that the CAP-SOP does not set the rate that EGSs must charge but merely sets a price ceiling.

         While PUC does not specifically respond to RESA's contentions about governmental slamming, CAUSE-PA, OCA, and PPL argue that RESA mischaracterizes the record. PPL's CAP-SOP allows for CAP customers to finish their existing contracts with an EGS, and, once that contract has expired, the CAP customer can either return to default service, shop through the CAP-SOP, or contract with an EGS on mutually-agreed-to terms outside of the CAP-SOP, including with the EGS that had been previously supplying the customer.

         In reply, on the issue of price, RESA argues that a rate ceiling contemplates a maximum that an EGS can charge, but what PUC permits here through PPL's CAP-SOP is the one and only price. While the Intervenors argue that an EGS's participation in the CAP-SOP is voluntary, this argument ignores the fact that the only options for an EGS that wishes to serve CAP customers is to offer this one and only price - a 7 percent discount from the PTC coupled with a $28 referral fee - or to not serve CAP customers at all.

         On the issue of governmental slamming, RESA replies that when CAP "customers are presented with no opportunity to do anything other than what PUC has decided they may do and are forced to make a selection against their will and without their consent, " this is slamming. (RESA Reply Br. at 16.) "[C]ontract expiration" is no defense to slamming. (Id.) PPL's CAP-SOP deprives CAP customers of the default position, pursuant to 52 Pa. Code ยง 54.10, to ...

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