Assessing Competitiveness of Retail Electricity Market in Pennsylvania
An Analysis Group team led by Vice President Paul Hibbard provided strategic and policy support to client Direct Energy Services LLC in the context of an investigation of the competitiveness of the regional retail electricity market. The investigation was launched in spring 2011 by the Public Utility Commission of Pennsylvania (PAPUC). The Commission’s goal was to consider system and service model improvements that would ensure that “a properly functioning and workable competitive retail electricity market exists in Pennsylvania” in accordance with that state’s Electricity Generation Customer Choice and Competition Act.
Mr. Hibbard, Managing Principal Andrew Parece, and Vice President Todd Schatzki helped Direct Energy review the structure for default service procurements by Pennsylvania’s electric distribution companies; design “opt-in auction” models to expand the migration of customers to competitive retail electric services; and develop schedules for orderly transitions to reduce companies’ default service obligations. According to testimony filed by Mr. Hibbard and Mr. Parece, the Commission has an opportunity to significantly improve the level of competition in the Commonwealth through customer migration auctions, which can ensure orderly system and service transitions. The investigation is ongoing, and changes will be implemented in two phases over several years.