Coalition for Affordable Utility Services & Energy Efficiency v. Pennsylvania Public Utility Commission
120 A.3d 1087
| Pa. Commw. Ct. | 2015Background
- PECO sought PUC approval for a CAP (Customer Assistance Program) Shopping Plan allowing low‑income CAP customers to choose an electric generation supplier (EGS); PECO proposed that participating EGSs charge CAP customers at or below PECO’s residential price‑to‑compare (PTC) and allowed EGSs to impose termination/cancellation fees.
- The PUC (Approval Order, Jan. 24, 2014; Reconsideration Order, Mar. 12, 2014) rejected PECO’s proposed price ceiling and also rejected the Office of Consumer Advocate’s (OCA) proposal to prohibit EGS early cancellation/termination fees, reasoning the PUC lacked authority to regulate EGS rates and that such restrictions could reduce supplier participation and raise prices.
- Petitioners (CAUSE‑PA, TURN, OCA) appealed the PUC orders, arguing the PUC had authority under the Choice Act and the Public Utility Code to adopt CAP protections (rate ceiling and ban on early‑termination fees) to keep CAP affordable and cost‑effective and to protect non‑CAP customers who subsidize CAP shortfalls.
- The Commonwealth Court considered (1) whether the PUC has authority to approve CAP rules that limit terms an EGS may offer to CAP participants and (2) whether the PUC’s factual findings rejecting PECO/OCA proposals were supported by substantial evidence.
- Court held that the PUC does have authority, under Section 2804(9) of the Choice Act and precedent, to impose CAP rules that limit EGS offers (when substantial reasons exist), affirmed the PUC’s rejection of PECO’s price ceiling (insufficient record justification) but reversed the PUC’s rejection of OCA’s prohibition on early cancellation/termination fees and remanded with instruction to adopt that prohibition.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether PUC has authority to approve a rule limiting EGS rates charged to CAP customers (price ceiling) | Petitioners: Choice Act and Code preserve PUC authority to protect low‑income customers and ensure CAPs are cost‑effective; PUC may "bend" competition to protect universal service. | PUC/Direct Energy: Choice Act deregulates generation; EGSs are not public utilities for rate regulation so PUC lacks authority to cap EGS prices. | Court: PUC does have authority to adopt CAP rules that limit terms (under §2804(9)) when justified, but here PUC’s rejection of PECO’s price ceiling was supported by substantial evidence and is affirmed. |
| Whether PUC has authority to prohibit EGS early cancellation/termination fees for CAP customers | Petitioners/OCA: PUC can and should prohibit such fees to protect CAP affordability and prevent harm to low‑income customers. | PUC/EGSs: Prohibiting fees would regulate supplier pricing/terms (rate regulation), deter supplier participation, and PUC lacks authority to do so. | Court: PUC has authority to adopt such a rule for CAPs; PUC’s rejection of the OCA prohibition lacked substantial evidentiary support and is reversed—remand to adopt prohibition. |
| Whether PUC’s factual findings rejecting the proposed price ceiling and fee prohibition are supported by substantial evidence | Petitioners: Record evidence (experts, PPL experience) shows CAP shopping without limits will increase CAP shortfalls and harm CAP/non‑CAP customers; PUC failed to address this evidence. | PUC: Evidence of harm is speculative; robust competition plus consumer education is a reasonable alternative; record contains supplier testimony that a hard cap would deter participation. | Court: Substantial evidence supports PUC’s rejection of a price ceiling (supplier risk testimony); but no substantial evidence supported rejection of the fee prohibition—court remanded to require prohibition. |
Key Cases Cited
- Commonwealth, Dep’t of Transp. v. Beam, 788 A.2d 357 (Pa. 2002) (agencies require clear legislative delegation but possess implied authority to effectuate express mandates)
- PP & L Industrial Customer Alliance v. Pa. Pub. Util. Comm’n, 780 A.2d 773 (Pa. Cmwlth. 2001) (PUC may limit competition where necessary to protect system reliability or other substantial interests)
- Delmarva Power & Light Co. v. Commonwealth, 870 A.2d 901 (Pa. 2005) (Choice Act intended to exempt EGSs from public‑utility rate regulation except where explicitly provided)
- Popowsky v. Pa. Pub. Util. Comm’n, 706 A.2d 1197 (Pa. 1997) (courts defer to PUC interpretations of the Code and its regulations absent clear error)