COMMONWEALTH OF PENNSYLVANIA
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Act 129 Energy Efficiency and Conservation
Program, Phase Two
COMMENTS OF EXELON ENERGY AND
CONSTELLATION NEWENERGY, INC.
In this proceeding, the Pennsylvania Public Utility Commission (“Commission”) has
begun the process of evaluating the cost-effectiveness of the Energy Efficiency & Conservation
(“EE&C”) Programs for the Commonwealth‟s largest electric distribution companies (“EDCs”),
as required by Act 1291, and determining whether additional incremental consumption and peak
demand reduction targets will be adopted and, if so, what those incremental reduction targets
shall be. Exelon Energy and Constellation NewEnergy, Inc. (“CNE”) (collectively, “Exelon”),
by their undersigned counsel, hereby file these Comments on the Commission‟s Secretarial
Letter2 issued the above-referenced proceeding on March 1, 2012 and published in the
Pennsylvania Bulletin on March 17, 2012.
INTRODUCTION & DESCRIPTION OF EXELON
In the event that the Commission or its Staff prepares a service list for this proceeding or
otherwise requires additional information regarding the positions presented herein, Exelon
1 Act of Oct. 15, 2008, P.L. 1592, No. 129, codified under 66 Pa.C.S. §§ 2806.1 (2012).
2 Secretarial Letter,
Issued on March 1, 2012 in Docket No. M-2012-2289411 (“Secretarial Letter”).
Vice President, State Government Affairs – East
Regulatory Affairs Manager Exelon Energy Company 300 Exelon Way Kennett Square, PA 19348 Telephone: (610) 765-6594
The name and address of Exelon‟s counsel in this matter is:
Divesh Gupta (PA Bar # 307892) Managing Counsel – Regulatory Constellation Energy 100 Constellation Way, Suite, 500C Baltimore, MD 21202 Telephone: (410) 470-3158 Facsimile: (443) 213-3556
Exelon‟s attorney is authorized to accept service on behalf of Exelon in this proceeding. Exelon
requests that the Commission and all parties of record serve copies of all documents issued on
both Exelon and its attorney. Particularly, Exelon respectfully requests that service (both
electronic and paper) be made to its counsel of record, Divesh Gupta, while only electronic
service be made to David I. Fein and Stephen Bennett.
Exelon Energy and CNE are indirect, wholly-owned subsidiaries of Exelon Corporation
(“Exelon Corp.”), a holding company, headquartered at 10 South Dearborn Street, Chicago,
Illinois, with operations and business activities in 47 states, the District of Columbia and
Canada. Exelon Corp. owns Commonwealth Edison Company (“ComEd”), Baltimore Gas and
Electric Company (“BGE”) and PECO Energy Company (“PECO”). Together ComEd, BGE
and PECO own electric transmission and electric and gas distribution systems that deliver
electricity to approximately 6.6 million customers in central Maryland (BGE), Northern Illinois
(ComEd) and southeastern Pennsylvania (PECO).
Exelon Energy is a competitive subsidiary of Exelon, licensed to provide retail service to
electricity customers in Illinois, Pennsylvania, Michigan, and Ohio and to provide retail service
to natural gas customers in Michigan, Ohio, and Pennsylvania. Currently, Exelon Energy has
approximately 17,000 electricity accounts in Illinois and Pennsylvania and approximately 11,000
natural gas accounts in Ohio, Illinois, Michigan, Kentucky, and Pennsylvania.3 CNE is
authorized to provide electricity and energy-related services to retail customers in Pennsylvania
and thirteen other states, the District of Columbia and two Canadian provinces. CNE is an active
participant in PJM Interconnection, L.L.C.‟s (“PJM”) load response markets, bidding into those
markets with customers‟ capabilities to curtail load.
On October 15, 2008, House Bill 2200 was signed into law as Act 129 which, among
other things, required EE&C programs for the Commonwealth‟s largest EDCs and required the
Commission to evaluate the costs and benefits of the EE&C programs by November 31, 2013.
Act 129 further directed the Commission to set new incremental consumption and peak demand
reductions, if the benefits of the program and plans exceed the costs.4 In accordance with these
directives, the Commission, on March 1, 2012, issued its Secretarial Letter in which the
Commission seeks “comments on a number of important topics that will be instrumental in
3 Exelon is not licensed to sell natural gas at retail in Illinois or Kentucky because such a license is not required.
designing and implementing any future phase of EE&C Programs.”5 Exelon herein provides its
general comments on Act 129 program design issues, in order to improve upon EDCs‟ and the
Commonwealth‟s implementation of the Act‟s EE&C directives.
1. Act 129 EE&C curtailment programs should promote competition, both in their
procurements for EE&C services, as well as in the marketplace for consumers’
participation in PJM load response programs.
In its October 26, 2009 order approving (with modifications) PPL Electric Utilities
Corporation‟s (“PPL Electric”) EE&C plan,6 the Commission stated that pursuant to Act 129,
“any marketing by PPL [Electric should] be competitively neutral so as not to prefer the use of
one [curtailment service provider (“CSP”)] over another,” and that “[n]o marketing advantage
should be given to any CSP participating in the PPL [Electric] curtailment program.”7 These
principles should apply to all EE&C plans across the Commonwealth, in order to promote both
competition within procurements for EE&C services by demand response providers (“DR
Providers”) as CSPs, as well as competitive opportunities for Pennsylvania customers to
participate in all of PJM‟s load response markets.
2. The Commission should require important improvements to EE&C programs to
ensure that CSPs are not able to create an unfair marketing advantage, and
hamper other demand response providers’ and consumers’ ability to participate
in PJM’s load response programs independent from such CSPs.
CSPs should not be able to obtain an unfair marketing advantage, which advantage may
hamper both other DR Providers ability to participate in PJM‟s load response programs, as well
6 See Opinion and Order
, Commission Docket No. M-2009-2093216 (entered Oct. 26, 2009) (“Oct. 2009
as the ability of customers to contribute to Act 129 targets if such customers already participate
in PJM‟s load response programs. To explain, recall that the EE&C curtailment programs
generally rely on PJM‟s existing economic load response (“ELR”) program for measurement and
identification of required curtailment time periods, essentially „piggy-backing‟ on the existing
PJM ELR program and taking advantage of PJM‟s substantial expertise and oversight. As part
of this reliance, then, EDCs have had to have CSPs evidence that customers are registered in
PJM‟s ELR program, in order to also be eligible to receive Act 129 EE&C incentives.
On the one hand, in order to meet this obligation for evidence, a CSP which has been
awarded contracts by an EDC should not be able to approach another DR Provider or such DR
Provider‟s customers directly and require that such customers be registered in the PJM ELR
program by the CSP directly
, as the CSP’s customer
, in order for these DR Provider‟s customers
to take advantage of Act 129 EE&C incentives. Customers would then be in the unfortunate
situation of making decisions including, but not limited to, (a) potentially defaulting on their
existing contract with their existing DR Provider, (b) having to bear administrative burdens of
participating in PJM‟s various load response programs (e.g., PJM‟s capacity market demand
response program, as well as PJM‟s ELR program) through several different DR Providers,
and/or (c) forgoing important economic savings that could be achieved by using only one DR
Provider to participate in PJM‟s various load response programs.8 Meanwhile, this CSP‟s
practices would clearly raise a competitive concern for the other DR Provider as these
8 See, e.g.
, Complaint of Viridity Energy, Inc.
, Federal Energy Regulatory Commission Docket No. ER12-54-000
(filed Mar. 29, 2012) at p.1 (the complainant explains that “[u]nder PJM‟s current Tariff, two end-use electricity customers who provide precisely the same capacity service to PJM at the same time and place can be compensated differently. A customer who registers with one [DR Provider] in PJM‟s capacity program, and uses that same [DR Provider] for energy and ancillary services, earns full compensation for the capacity service it provides to PJM. However, the same customer would lose a substantial part of that compensation simply by registering with one [DR Provider] for capacity, and a second [DR Provider] for energy and ancillary services.”
On the other hand, and in stark contrast to the above approach, a CSP that is awarded
contracts by an EDC can more appropriately agree to allow consumers to remain
existing DR Providers (or continue to participate in PJM directly themselves), so long as
consumers are able to provide evidence to the CSP that they are appropriately registered in
PJM‟s ELR program. In this way, customers that wish to take advantage of Act 129 EE&C
curtailment program incentives would not have to limit their choice of DR Providers only to the
CSP that is awarded a contract by the EDC for a particular service territory; this significant
aspect is particularly important for customers that have facilities in multiple EDCs‟ zones in the
Commonwealth, and/or multiple locations throughout PJM. In addition, this alternative
approach does not place other DR Providers in PJM at a marketing disadvantage to a CSP.
The Commission can ensure that consumers are afforded the broadest array of
competitive choices, and that competition in PJM‟s load response programs is not hampered, by
adopting one of two approaches. First, the Commission could require that, instead of Act 129
EE&C curtailment program payments being made from the EDCs to a CSP, and then from a CSP
to customers, that EE&C curtailment program payments are structured as an additional incentive
to a customer, for any customer that registers – either through any
or directly with PJM – in PJM‟s ELR program and abides the ELR program‟s requirements.
This has the advantage of ensuring that customers directly receive all
of the value of the Act 129
EE&C curtailment program payments, rather than relying on a CSP to distribute additional
compensation, if any, to enroll customers in PJM‟s ELR program.
In the alternative, the Commission can require that all CSPs adhere to the second
approach discussed above. Namely, the Commission can prohibit a CSP from demanding that
customers enroll in PJM‟s ELR program through the CSP, and make clear that CSPs require only
that the customers show evidence that they have enrolled in PJM‟s ELR program, either through
another DR Provider, or directly themselves.
WHEREFORE, for all the foregoing reasons, Exelon Energy and Constellation
NewEnergy, Inc. respectfully request that the Commission accepts their comments and consider
them in its review of EDCs‟ Act 129 EE&C programs. The important improvements discussed
herein will serve to promote competition not only in procurements for Act 129 EE&C services,
but also in the marketplace for consumers‟ participation in PJM load response programs, more
Divesh Gupta Managing Counsel – Regulatory Constellation Energy 100 Constellation Way, Suite 500C Baltimore, MD 21202 Telephone: (410) 470-3158 Facsimile: (410) 213-3556
On Behalf of Exelon Energy and Constellation NewEnergy, Inc.
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