IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Retail Energy Supply Association, :

Petitioner :

 :

v. : No. 230 C.D. 2017

 : Argued: December 6, 2017

Pennsylvania Public Utility :

Commission, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ROBERT SIMPSON, Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

OPINION BY

JUDGE COHN JUBELIRER FILED: May 2, 2018

Deregulation of the electricity market under the Electricity Generation 

Customer Choice and Competition Act1(Choice Act), has permitted all residential 

customers of electric distribution companies2(EDC) in the Commonwealth to 

 

1

66 Pa. C.S. §§ 2801-2815. The Choice Act deregulated the generation of electricity. 

Section 2806(a) of the Choice Act, 66 Pa. C.S. § 2806(a). The Choice Act provides that “all 

customers of electric distribution companies in this Commonwealth shall have the opportunity to 

purchase electricity from their choice of electric generation suppliers. The ultimate choice of the 

electric generation supplier is to rest with the consumer.” Id. 

2 Section 2803 of the Choice Act defines “electric distribution company” as follows:

The public utility providing facilities for the jurisdictional transmission and 

distribution of electricity to retail customers, except building or facility 

owners/operators that manage the internal distribution system serving such building 
2

choose their electricity generation supplier3(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-tocompare (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 lowincome 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 

 

or facility and that supply electric power and other related electric power services 

to occupants of the building or facility.

66 Pa. C.S. § 2803.

3 Section 2803 of the Choice Act defines “electric generation supplier” as follows:

A person or corporation, including municipal corporations which choose to provide 

service outside their municipal limits except to the extent provided prior to the 

effective date of this chapter, brokers and marketers, aggregators or any other 

entities, that sells to end-use customers electricity or related services utilizing the 

jurisdictional transmission or distribution facilities of an electric distribution 

company or that purchases, brokers, arranges or markets electricity or related 

services for sale to end-use customers utilizing the jurisdictional transmission and 

distribution facilities of an electric distribution company. The term excludes 

building or facility owner/operators that manage the internal distribution system 

serving such building or facility and that supply electric power and other related 

power services to occupants of the building or facility. The term excludes electric 

cooperative corporations except as provided in 15 Pa.C.S. Ch. 74 (relating to 

generation choice for customers of electric cooperatives).

Id.
3

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 Association4(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

 

4 RESA avers that it was founded in 1990 and “is a broad and diverse group of more than 

twenty retail energy suppliers dedicated to promoting efficient, sustainable and customerorientated competitive retail energy markets.” (RESA Br. at 6 n.1.)

5 RESA petitioned for reconsideration; however, its petition was not timely filed. 

Nevertheless, PUC exercised its discretion pursuant to Section 1.2 of its regulations, 52 Pa. Code 

§ 1.2, so as to consider RESA’s petition for reconsideration as one for rescission or amendment, 

which, PUC noted, may be filed at any time. (PUC Opinion (Op.) and Order at 2 n.1, Jan. 26, 
4

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 (CAUSEPA), 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 

 

2017.) However, in PUC’s order denying relief, it inadvertently referred to the petition as one for 

reconsideration. (Id. at 32.)
5

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 
6

[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

 

6 Section 54.182 of Title 52 of the Pennsylvania Code defines “default service” as the 

“[e]lectric generation supply service provided pursuant to a default service program to a retail 

electric customer not receiving service from an EGS.” 52 Pa. Code § 54.182. The default service 

rate is “[t]he rate billed to a default service customer resulting from compliance with a 

Commission-approved default service program,” while the PTC is “[a] line item that appears on a 

retail customer’s monthly bill for default service.” Id. 

7 A default service provider is required to submit a DSP to PUC that “identifies a 

procurement plan, an implementation plan, a rate design to recover all reasonable costs and other 

elements identified in § 54.185 (relating to default service programs and periods of service).” 52 

Pa. Code § 54.182. 

8 PPL witness Michael S. Wukitsch, a Customer Relations Specialist in PPL’s Customer 

Service Department, testified before PUC regarding PPL’s statistics and data for CAP shopping. 

His direct testimony, which was submitted through written statements, is found at pages 114a127a of the Reproduced Record. 
7

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 

 

9 During the proceeding before PUC, PPL provided additional data for December 2015 

through February 2016. This data showed that during this time period, 88 percent to 93 percent of 

CAP customers were paying above the PTC. These percentages were attributed to the fact that on 

December 1, 2015, PPL’s PTC dropped $0.01575 per kWh. 
8

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 

 

10 Between January 2012 and October 2015, an average of two percent of CAP customers, 

both shopping and non-shopping, were removed from PPL’s CAP for exceeding their CAP credits. 

11 James M. Rouland, PPL’s Supervisor of Energy Procurement, Settlement and 

Scheduling, testified via written statements about limits that might be placed on CAP shopping. 

His direct testimony is found at pages 105a-113a of the Reproduced Record. 

12 When a customer calls PPL, for example, when initiating electric service, the PPL call 

center representative will ask the customer if he is interested in hearing about opportunities for 

potential savings on his electric generation bill. If so, the customer is transferred to a PPL 

Solutions representative who will offer the customer an opportunity to enroll in an EGS product 

that provides a customer with a 12-month fixed price at a 7 percent discount off the then-current 

PTC. If the customer chooses to enroll, the customer can choose to receive service from a 
9

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 

 

particular EGS or, if the customer does not choose a specific EGS, one is randomly assigned to 

the customer. An EGS pays a fixed fee of $28 per referred customer. A customer enrolled in the 

SOP with an EGS may terminate his contract early – for example, when the PTC drops below what 

was a seven percent discounted rate – and re-enroll in the SOP with a new rate, now at seven 

percent below the new PTC.

13 OCA’s proposal was offered through the testimony of Barbara R. Alexander, a Consumer 

Affairs Consultant for OCA, whose direct testimony, via written statements, is found at pages 

181a-196a of the Reproduced Record.

14 CAUSE-PA’s proposal was offered through the testimony of Harry Geller, an attorney 

who maintains an office at the Pennsylvania Utility Law Project, whose direct testimony, via 

written statements, is found at pages 218a-256a of the Reproduced Record.
10

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 

 

15 RESA never explained what constitutes value-added products, but on appeal describes 

such products as including “loyalty discounts, reward points and gift cards.” (RESA Reply Brief 

(Br.) at 15.)

16 PPL provided rebuttal testimony from Wukitsch, whose rebuttal testimony, via written 

statements, is found at pages 308a-315a of the Reproduced Record.

17 CAUSE-PA provided rebuttal testimony from Geller, whose rebuttal testimony, via 

written statements, is found at pages 326a-335a of the Reproduced Record.

18 CAUSE-PA’s proposal was offered through the sur-rebuttal testimony of Geller, whose 

sur-rebuttal testimony, via written statements, is found at pages 373a-394a of the Reproduced 

Record.
11

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 sevenpercent 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

 

19 RESA’s opposition to CAUSE-PA’s CAP-SOP was offered through the rejoinder 

testimony of Matthew White, General Counsel of Legislative and Regulatory Affairs for Interstate 

Gas Supply, Inc., whose rejoinder testimony, via written statements, is found at pages 406a-410a 

of the Reproduced Record.

20 In prior rebuttal testimony, White stated that there were any number of reasons why a 

CAP customer might elect one EGS over another, such as price certainty or other value-added 

products and services, and, thus, using only the PTC for what constitutes an appropriate price was 

inappropriate. (R.R. at 323a.) 
12

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 sevenpercent 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.

 

21 PPL’s proposal was offered through the rejoinder testimony of Rouland, whose rejoinder 

testimony, via written statements, is found at pages 397a-405a of the Reproduced Record.
13

(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 reenrolled 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.
14

(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 CAPSOP 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 CAPSOP.

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 

 

22 All parties waived cross-examination of the witnesses. (PUC Op. and Order at 4, Oct. 

27, 2016.) 

23 PUC declined to adopt the ALJ’s modification, which is not at issue on appeal.
15

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. CAUSEPA [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 
16

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, 
17

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. Discussion24

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.) 

 

24 We have reorganized RESA’s issues on appeal for purposes of this opinion.
18

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 CAUSEPA 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 CAUSEPA, 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 

 

25 “‘Slamming’ is an unauthorized change to a customer’s supply service.” Pa. Pub. Util. 

Comm’n, Bureau of Investigation & Enf’t v. Energy Servs. Provider, Inc., Docket No. M-2013-

2325122, 2014 WL 2644840, *2 n.3 (PUC). Section 57.177 of Title 52 of the Pennsylvania Code 

permits PUC, inter alia, to assess fines and initiate proceedings to revoke the license of an EGS 

that demonstrates a pattern of having changed a customer’s EGS without his consent. 52 Pa. Code 

§ 57.177.
19

access to electric service. Therefore, PUC concludes, it has the authority to bend 

competition by imposing price limits on EGSs serving CAP customers. The 

Intervenors26 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 CAPSOP 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 

 

26 CAUSE-PA, OCA, and PPL, as Intervenors, have all submitted briefs in support of 

affirming PUC’s Orders. We do not recount the arguments of the Intervenors where they are 

repetitive of those of PUC.
20

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 § 54.10, to remain with 

their existing EGS, even after the contract expires, unless the customer elects a 

different option.

2. Scope and Standard of Review

On a petition to review a decision of PUC, our standard of review is limited 

to determining whether substantial evidence supports the necessary findings of fact, 

whether PUC erred as a matter of law, and whether constitutional rights were 

violated. CAUSE-PA, 120 A.3d at 1094. We defer to PUC’s interpretation of the 

Public Utility Code27 and its own regulations unless PUC’s interpretations are clearly 

erroneous. Id. at 1095. We may not substitute our judgment for that of PUC “when 

substantial evidence supports the PUC’s decision on a matter within the 

commission’s expertise.” Id. (internal quotation marks and citation omitted). 

“Judicial deference is even more necessary when the statutory scheme is technically 

complex.” Id. (internal quotation marks and citation omitted). On issues of law, 

“our standard of review is de novo and our scope of review is plenary.” Id.

3. Our Decision in CAUSE-PA

We begin with a review of our decision in CAUSE-PA. There, PECO Energy 

Company (PECO), an EDC, submitted for approval to PUC its CAP Shopping Plan. 

Id. at 1091. Under PECO’s CAP Shopping Plan, an EGS that wished to participate 

in the CAP had to agree to charge a rate for electricity supply to CAP customers that 

 

27 The Choice Act is part of the Public Utility Code, 66 Pa. C.S. §§ 101-3316.
21

was at or below PECO’s PTC but permitted an EGS to impose cancellation or 

termination fees. Id. OCA recommended that an EGS be prohibited from imposing 

cancellation or termination fees. Id. PUC concluded that it did not have the authority 

under the Choice Act to impose a limit on the shopping price for CAP customers at 

or below the PTC or to prohibit an EGS from charging early termination or switching 

fees. Id. at 1091-92. Petitioners appealed to this Court, arguing that PUC erred in 

its conclusion, and we agreed. We first looked to the language of the Choice Act, 

noting that “the rule requiring express legislative delegation is tempered by the 

recognition that an administrative agency is invested with the implied authority 

necessary to the effectuation of its express mandates.” Id. at 1100 (citation omitted). 

We pointed out “that the overarching goal of the Choice Act is competition through 

deregulation of the energy supply industry, leading to reduced electricity costs for 

consumers[;]” however, this “scheme does not demand absolute and unbridled 

competition.” Id. at 1101. Rather, at times, 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.” Id. at 1103.

Of particular significance, we saw in PUC’s approval of PECO’s SOP for nonCAP customers, although not at issue on appeal, an example of PUC bending 

competition under the Choice Act. Id. at 1090, 1093, 1103. PECO’s SOP required 

an EGS to “agree to supply electricity to referred PECO customers at a fixed rate of 

at least 7% below PECO’s PTC at the time of customer enrollment for a term of 12 

months.” Id. at 1090 (footnote omitted). A PECO customer in the SOP could cancel 

at any time without being charged a fee and could then select either an alternative 

EGS or return to PECO’s default service PTC. Id. at 1090 & n.4, 1096. Because 

PUC rejected the price ceiling component of PECO’s proposed CAP, PUC “directed 
22

PECO to allow interested CAP customers to avail themselves of the [SOP].” Id. at 

1093. Although PUC went “to great lengths” to explain the differences between the 

PECO SOP and the PECO CAP so as to justify its authority to approve the former 

but not the latter, we found the distinctions between the two programs to be “not 

material to the legal question of whether the PUC has statutory authority to 

implement, or approve, an EGS price ceiling under any circumstance.” Id. at 1103. 

Indeed, if, as PUC argued, it “lack[ed] the authority to place a cap on the rate an 

EGS may charge a [non-CAP] customer, it seem[ed] to us that such lack of authority 

would extend to the CAP as well as to the [SOP].” Id. (emphasis added).

Therefore, following the reasoning of both PUC and this Court in PP & L Industrial 

Customer Alliance v. Pennsylvania Public Utility Commission, 780 A.2d 773 (Pa. 

Cmwlth. 2001) (en banc), we concluded that PUC has the authority under the Choice 

Act to impose or approve “CAP rules that would limit the terms of any offer from 

an EGS that a customer could accept and remain eligible for CAP benefits[,]” 

including approving an EGS price ceiling and prohibiting early cancellation fees. 

CAUSE-PA, 120 A.3d at 1103-04. We went on to state the following:

So long as it “provides substantial reasons why there is no reasonable 

alternative so competition needs to bend” to ensure adequately-funded, 

cost-effective, and affordable programs to assist customers who are of 

low-income to afford electric service . . . the PUC may impose CAP 

rules that would limit the terms of any offer from an EGS that a 

customer could accept and remain eligible for CAP benefits – e.g., an 

EGS rate ceiling, a prohibition against early termination/cancellation 

fees, etc.

Id. at 1104 (quoting PP & L, 780 A.2d at 782).

Nevertheless, while we concluded that PUC has the authority to impose CAP 

rules, such as a price ceiling, there was substantial evidence in that record to support 
23

PUC’s conclusion that there was not a substantial reason “to justify limiting 

competition by imposing a price ceiling on EGSs.” Id. at 1107.28 Similarly, 

Petitioners did not persuade PUC that customer education programs, as a reasonable 

alternative to price regulation, were inadequate. Id. at 1107. However, we reached 

a different conclusion with respect to cancellation and termination fees. We held

that PUC should have approved a rule prohibiting an EGS from charging a CAP 

customer cancellation and termination fees because it was undisputed that a 

prohibition on such fees would provide “an added layer of protection to CAP 

participants consistent with the affordability goals of the Choice Act[,]” and because 

PUC’s decision to reject this prohibition out of concern for the impact it would have 

on competition and choice was not supported by substantial evidence. Id. at 1108.

4. PPL Has the Authority to Approve the CAP-SOP

While RESA argues that the Choice Act requires that CAP customers be 

given “[d]irect access to the competitive market” and, thus, “[t]he opportunity to 

purchase electricity from their choice of EGSs,” (RESA Br. at 19-20), we held in 

CAUSE-PA that the Choice Act permits PUC to effectively limit competition and 

choice for low-income customers, provided there are no reasonable alternatives to 

restricting competition, so that other important policy concerns of the General 

Assembly, such as access, affordability, and cost-effectiveness, may be served. 

CAUSE-PA, 102 A.3d at 1104, 1106; see 66 Pa. C.S. § 2802(9) (“Electric service is 

essential to the health and well-being of residents, to public safety and to orderly 

economic development, and electric service should be available to all customers on 

reasonable terms and conditions”), (10) (“The Commonwealth must, at a minimum, 

 

28 We discuss this portion of our decision in CAUSE-PA in more detail in the section 

addressing RESA’s substantial evidence challenge.
24

continue the protections, policies and services that now assist customers who are 

low-income to afford electric service”), (17) (“There are certain public purpose 

costs, including programs for low-income assistance . . . which have been 

implemented and supported by public utilities’ bundled rates. The public purpose is 

to be promoted by continuing universal service and energy conservation policies, 

protections and services, and full recovery of such costs is to be permitted through a 

nonbypassable rate mechanism”); 66 Pa. C.S. § 2804(9) (“Programs under this 

paragraph shall be subject to the administrative oversight of the commission which 

will ensure that the programs are operated in a cost-effective manner”). As the 

General Assembly recognized in Section 2802 of the Choice Act, if CAP customers 

were given direct access to the competitive market, they would be priced out of the 

market because they cannot afford to pay the entirety of their bills. Further, PUC 

could find that PPL’s prior CAP, which did allow for greater competition in that a 

CAP customer was permitted to enter into any contract with any licensed EGS and 

pay any price for service regardless of whether the price was higher or lower than 

PPL’s PTC, was causing harm to both CAP and non-CAP customers in terms of 

access, affordability, and cost-effectiveness. Substantial evidence in the record 

supports PUC’s finding, as we discuss more fully below in the section addressing

RESA’s substantial evidence challenge, that PPL’s prior CAP, without any shopping 

restrictions, resulted in about half of shopping CAP customers paying above the PTC 

who then exhausted their CAP credits more rapidly, while non-CAP customers had 

to pay higher rates since they subsidize the cost of electricity for CAP customers. 

PUC’s approval of PPL’s CAP-SOP is designed to alleviate harms to access, 

affordability, and cost-effectiveness resulting from unrestricted CAP shopping. We 

recognize that there is a “tension” between competing policy concerns promoting 
25

competition and choice, and protecting access, affordability, and cost-effectiveness;

however, PUC’s approval of the CAP-SOP seeks to strike a balance between these 

concerns under the authority the General Assembly gave it through the Choice Act.29 

CAUSE-PA, 120 A.3d at 1101.

PUC’s approval of the price term of PPL’s CAP-SOP at a 7 percent discount 

off the PTC at the time of enrollment for a fixed period of 12 months serves these 

other important policy concerns of the General Assembly, and the price term does

not exceed PUC’s authority under the Choice Act. It is evident that PPL’s CAPSOP is modeled after PPL’s traditional SOP. There is not a marked difference 

between the two programs. The traditional SOP and CAP-SOP share the following 

features: both offer a fixed 12-month price based on a 7 percent discount off the 

PTC in effect at the time the customer enrolls; both the traditional SOP and CAPSOP prohibit an EGS from charging a cancellation or early termination fee; both the 

traditional SOP and CAP-SOP permit the customer to re-enroll in the program, 

including when the PTC drops below the discounted rate or when the customer 

cancels his contract and seeks to re-enroll at a new rate discounted 7 percent below 

the then new PTC; and both allow an EGS to participate on a quarterly basis and to 

leave on a quarterly basis. Moreover, the CAP-SOP here, modeled after PPL’s 

traditional SOP, shares many of the same features of the SOP in CAUSE-PA, which 

 

29 RESA’s advocacy in favor of unregulated competition so that CAP customers can choose 

an EGS for reasons “[b]eyond lower pricing” arguably undercuts the Choice Act’s concern for 

accessible, affordable, and cost-effective electrical service for all Pennsylvanians. (RESA Reply 

Br. at 15.) RESA would have CAP customers “leverage the power of the competitive market” so 

that they might obtain “loyalty discounts, reward points and gift cards offered through some EGS 

programs.” (Id.) However, that leverage of power comes at a cost to non-CAP customers who 

would be paying even more in subsidies, were there no shopping restrictions, so that CAP 

customers might earn more reward points to use at a retailer or restaurant. The use of the CAP in 

this manner would appear to be inconsistent with the Choice Act. 
26

we said PUC has the authority to approve. CAUSE-PA, 120 A.3d at 1103. Thus, 

PUC’s approval of the price rate contained in PPL’s CAP-SOP, consistent with our 

holding in CAUSE-PA, does not exceed PUC’s authority under the Choice Act.

We disagree with RESA’s claim that PPL’s CAP-SOP goes beyond the rate 

ceiling we said was permissible for PUC to approve in CAUSE-PA because this one 

and only price is “the ceiling, walls and floor.” (RESA Br. at 31.) PPL’s CAP-SOP 

sets a rate ceiling, which, as we stated in CAUSE-PA, is permissible. Further, the 

participation of both an EGS and a CAP customer in the CAP-SOP is voluntary. 

Thus, a CAP customer is free to drop out of the CAP-SOP and arrange for electric 

supply outside of the CAP-SOP with an EGS, which may be at a rate higher or 

lower than seven-percent off the PTC. Moreover, if a CAP customer is able to obtain 

a better offer than the one in the CAP-SOP, the CAP customer is not prevented from 

doing so, but the CAP customer would then have to pay the entirety of his bill. The 

record shows that the CAP participation rate of confirmed low-income customers is 

24 percent. (R.R. at 225a.) Thus, some low-income customers do choose to shop.

RESA also argues that PPL’s CAP-SOP will change a CAP customer’s 

electricity supplier without his consent, which constitutes “slamming.” (RESA Br. 

at 23-24.) However, the CAP-SOP provides that CAP customers operating under an 

existing contract on June 1, 2017, can finish their contract with an EGS. Once the 

contract expires, or is terminated by the CAP customer, the CAP customer will have 

the choice to either return to default service, shop through the CAP-SOP while 

maintaining CAP benefits, or leave the CAP and shop for an EGS outside of the 
27

CAP-SOP. PPL’s CAP-SOP does not force a CAP customer to return to default 

service. Rather, the choice remains with the CAP customer.30

RESA also argues that PPL’s CAP-SOP violates 52 Pa. Code § 54.10,

31

because it “deprives [a CAP customer] of the ‘default’ scenario, under which 

 

30 The Choice Act contains a prohibition against slamming in Section 2807(d)(1) of the

Choice Act, 66 Pa. C.S. § 2807(d)(1), which also provides for PUC to establish regulations to 

ensure that a customer’s electricity supplier is not changed by an EDC without the customer’s 

consent. There is no provision in the CAP-SOP that exempts PPL from complying with Section 

2807(d)(1) and applicable regulations.

31 Section 54.10 provides as follows:

An EGS shall provide the following notices to customers prior to the expiration of 

a fixed term contract or prior to a change in contract terms:

(1) An initial notice shall be provided to each affected customer 45 to 60 days prior 

to the expiration date of the fixed term contract or the effective date of the 

proposed change in terms. For customers who have elected to receive electronic 

communications from the EGS, the notice shall be transmitted in the manner 

chosen by the customer. The initial notice must include:

(i) A general description of the proposed change in terms of service.

(ii) The date a change shall be effective or when the fixed term contract is 

to expire.

(iii) An explanation of why a change in contract terms is necessary.

(iv) A statement indicating when a follow-up options notice shall be issued 

with details regarding the proposed change.

(v) A statement explaining that the options notice must discuss the 

customer’s options to the proposed change in terms of service or expiring 

fixed term contract.

(vi) A statement indicating whether the existing fixed term contract has a 

cancellation fee, and an explanation of the fee amount and how to avoid the 

fee, if possible, including notice of the date when the customer can choose 

a different product from the customer’s existing EGS, choose an alternative 

EGS or return to default service.

(2) An options notice shall be provided, by first class mail, to each affected 

customer at least 30 days prior to the expiration date of the fixed term contract 
28

 

or the effective date of the proposed change in terms. The options notice must 

include:

(i) A statement advising the customer of the specific changes being proposed 

by the EGS and informing the customer of how to exercise the customer’s 

options, including the customer’s ability to accept the proposed changes, to 

choose another product offering from the customer’s existing EGS, to select 

another EGS or to return to default service.

(ii) Information regarding new pricing or renewal pricing including the price to 

be charged, per kilowatt-hour, for the first billing cycle of generation service:

(A) If a customer fails to respond to the options notice and is converted to a 

month-to-month contract, the EGS shall provide a disclosure statement 

under § 54.5 (relating to disclosure statement for residential and small 

business customers).

(I) Notice of a subsequent change in pricing shall be provided to the 

customer at least 30 days prior to the new price being charged.

(II) For customers who have elected to receive electronic 

communications from the EGS, notice of the change in pricing shall 

be transmitted in the manner chosen by the customer. For all other 

customers, notice shall be provided by first class mail.

(B) If a customer fails to respond to the options notice and is entered into a 

new fixed term contract, the EGS shall provide the fixed, per kilowatt-hour 

price to be charged and term length of the contract.

(iii) The telephone numbers and Internet addresses, as applicable, for the Office 

of Consumer Advocate, the Commission and PaPowerSwitch.com.

(iv) Language clearly visible on the front of the envelope used to provide the 

options notice stating that it contains important information regarding the 

expiration or changes in terms of the customer’s electric supply contract.

(3) When a customer fails to respond to either notice, the following apply:

(i) A fixed term contract shall be converted to one of the following:

(A) A month-to-month contract, either at the same terms and 

conditions or at revised terms and conditions, as long as the contract 

does not contain cancellation fees.

(B) Another fixed term contract, as long as the new contract includes 

a customer-initiated cancellation provision that allows the customer 

to cancel at any time, for any reason, and does not contain 

cancellation fees.

(ii) The converted contracts shall remain in place until the customer chooses 

one of the following options:
29

shopping customers stay with their EGS until the customer affirmatively selects 

another option.” (RESA Reply Br. at 17 (emphasis in original).) RESA’s position 

is that under this regulation the EGS must provide two notices to the customer prior 

to the expiration of a fixed-term contract, explaining the terms of a new contract, 

how to accept those changes, choose a different product, select another EGS, or 

return to default service. If the customer fails to respond to those notices, the EGS 

can convert the expiring contract into either another fixed-term contract, or a monthto-month contract, with that EGS, on the same or different terms and conditions

(which may be less favorable to the customer). This new contract remains in place

until the customer takes affirmative action to elect a different option. However, it 

appears the CAP-SOP requires the CAP customer to make a decision and does not 

permit the non-choice to control the new contract with an EGS. For month-to-month 

contracts, a CAP customer must make a choice when it is time for CAP 

recertification, to enroll in the CAP-SOP, return to default service, or make a 

contract outside of the CAP. (R.R. at 420a, ¶ 5(a)-(c).) Thus, we see no proof that 

the CAP-SOP changes a CAP customer’s electricity supplier without his consent or 

in violation of regulation.

B. Substantial Evidence Challenge

1. Contentions of the Parties

RESA argues that PUC failed to satisfy its initial burden of showing 

substantial reasons why there are no reasonable alternatives to restricting shopping. 

 

(A) Select another product offering from the existing EGS.

(B) Enroll with another EGS.

(C) Return to the default service provider.

52 Pa. Code § 54.10.
30

PUC failed to meet this burden because the data did not demonstrate harm to PPL’s 

USECP as a result of CAP shopping and reasonable alternatives to restricting 

shopping were available.

On the issue of harm, RESA argues, the data did not show that CAP shopping 

has eroded the funding, cost-effectiveness, and affordability of PPL’s USECP. 

While PUC focused on CAP shoppers who at some point were billed a price higher 

than the PTC, the data also showed that about half of all CAP shoppers were billed 

at or below the PTC. Notwithstanding this, PUC ordered these customers who were 

experiencing a savings to return to default service, resulting in them paying higher 

bills. The data also did not show, as PUC claimed, that as a result of CAP shopping, 

CAP customers were eroding their CAP credits faster. Between January 2, 2012, 

and October 30, 2015, an average of two percent of CAP participants, both shoppers 

and non-shoppers, were removed from the CAP because they exceeded their CAP 

credits. This figure is consistent with the 1.8 percent rate for the period between 

January 2009 and December 2011, which includes one year prior to when CAP 

customers could shop. Ultimately, RESA claims, the data PPL provided suffers 

from the fact that it focuses on a single point in time and does not reflect the 

conditions CAP shoppers experienced over their entire shopping experience. 

On the issue of reasonable alternatives, RESA contends that PPL’s initial 

proposal, to inform CAP or potential CAP customers about PPL’s traditional SOP, 

is a reasonable alternative to restricting their right to shop that mitigates the harms 

that are allegedly occurring. In addition, RESA continues, PUC did not properly 

analyze whether there were no reasonable alternatives to restricting shopping. It is 

not enough for the proponents supporting PPL’s CAP-SOP to coalesce around an 

approach that restricts the right to shop as a means of showing that there is no 
31

reasonable alternative. Also, RESA argues, there was no comprehensive review and 

assessment of PPL’s entire USECP. As a result, “alternatives to restricting shopping 

that could have been effectuated within the design of the USECP were not 

developed.” (RESA Br. at 52.)

Finally, RESA claims that even if PUC met its initial burden, there was 

substantial evidence in the record showing that the CAP-SOP would not succeed 

because it included elements that would discourage EGSs from participating in the 

CAP-SOP.

PUC responds that it met its burden. PUC argues that RESA misstates the 

burden of proof. In CAUSE-PA, PUC argues, this Court said that PUC has to provide 

“substantial reasons why the restriction on competition is necessary (i.e., there are 

no reasonable alternatives).” (PUC Br. at 22 (emphasis in original) (quoting 

CAUSE-PA, 120 A.3d at 1106).) This language is simply a restatement of the 

substantial evidence standard for agency adjudications. Thus, under CAUSE-PA, 

PUC’s determination imposing price restrictions on EGSs serving CAP customers 

should be upheld if it is supported by substantial evidence. PUC met that standard. 

The evidence of record showed the harms both CAP and non-CAP customers were 

suffering from unrestricted customer shopping. As to the existence of reasonable 

alternatives, PUC contends that CAUSE-PA did not impose an additional burden on 

the party proposing a price restriction to prove there is no alternative course of 

conduct or, stated differently, if there is a single reasonable alternative, then the 

imposition of a shopping restriction is unlawful. Again, all that is required is that 

PUC’s evaluation of various alternatives be supported by substantial evidence. The 

parties considered other alternatives, but the proponents of PPL’s CAP-SOP 

concluded that PPL’s CAP-SOP was the most reasonable alternative. RESA’s 
32

proposal to impose no restrictions and encourage CAP customers to use the 

traditional SOP, PUC concluded, did not protect CAP and non-CAP customers from 

the negative effects associated with CAP customers paying more than the PTC.

CAUSE-PA adds that, as to the proof of harm, the evidence showed that from 

January 2012 through February 2015, 34,780 customers were removed from the 

CAP because they had exceeded their credits, and of this number, 27,600 or 79 

percent, were shopping with an EGS during some portion of the prior 18 months. In 

any case, if the costs of CAP customers increased, someone had to bear those costs. 

While RESA claims that this harm “‘is focused on a single point in time,’” that time 

period consisted of a 46-month time period and showed a net harm of $228,656 per 

month. (CAUSE-PA Br. at 47 (quoting RESA Br. at 48).) RESA did not submit 

any evidence contradicting this proof of harm. As for RESA’s claim that PPL’s 

CAP-SOP is bound to fail because EGSs will not participate, PUC correctly 

concluded that such a claim is speculative. Just 7 of RESA’s 21 members operate 

in the Commonwealth, and even RESA’s own witness could only speculate as to the 

reasons why an EGS might participate in a SOP.

In reply, RESA argues that reasonable alternatives to restricting shopping that 

PUC did not even consider were to increase or eliminate the CAP credit maximum 

or to identify solutions within the program design of the USECP. As for non-CAP 

customers subsidizing the cost for CAP customers, this is merely a public purpose 

cost, which the General Assembly contemplated in the Choice Act, and the General 

Assembly’s concern that the USECP be appropriately funded and operated in a costeffective manner has nothing to do with the amount of subsidy that non-CAP 

customers pay. Indeed, the $2.7 million non-CAP customers paid to subsidize the 

cost of the CAP amounts to 75 cents a customer.
33

RESA further disagrees with the assertion of PPL and the Intervenors that 

CAUSE-PA imposed merely a substantial evidence requirement as opposed to 

requiring that there be no reasonable alternative.

2. Substantial Evidence Supports the Determinations32

In CAUSE-PA, we said that “the proponents of the rule restrictions . . . ha[ve] 

the burden of proof and ultimately the burden to persuade the PUC to enact the 

proposed restrictions on competition.” CAUSE-PA, 120 A.3d at 1106-07 (citing 66 

Pa. C.S. § 332(a).) We concluded, as previously discussed, that substantial evidence 

supported PUC’s decision to reject the proposed PECO price ceiling, but that PUC’s 

decision to reject the prohibition on early cancellation and termination fees was not 

supported by substantial evidence. Id. at 1107-08. On the issue of the proposed 

price ceiling, we noted that “it is not our role to reweigh the evidence below or to 

substitute our judgment for that of the PUC, particularly on matters within the PUC’s 

area of expertise.” Id. at 1107. In short, we said, “PUC was not persuaded that 

Petitioners’ evidence provided a substantial reason to justify limiting competition by 

imposing a price ceiling on EGSs as part of the PECO CAP Shopping Plan.” Id. On 

the issue of the prohibition on early cancellation and termination fees, we said that 

“PUC recognized that such fees may impede the ability of CAP customers to escape 

from unaffordable variable rate contracts, particularly during periods of price 

spikes.” Id. at 1107-08. Thus, there appeared to be no dispute that prohibiting early 

cancellation and termination fees “would provide an added layer of protection to 

CAP participants.” Id. at 1108. Moreover, there was no evidence showing that

 

32 Initially, to the extent RESA reiterates in its substantial evidence challenge that PPL’s 

CAP-SOP should have been considered in the context of PPL’s USECP, that contention, as we 

discuss more fully in Section C.2, is waived.
34

prohibiting early cancellation and termination fees “would be anti-competitive and 

limit the choices available to CAP participants.” Id. at 1107. While PUC had 

rejected the proposal on prohibiting cancellation and early termination fees on the 

ground that consumer education would suffice, we said that “[s]tatutorily-mandated 

disclosures and prohibiting early cancellation/termination fees . . . are not mutually 

exclusive, especially where there is a lack of evidence that the latter would adversely 

affect the competitive marketplace for CAP participants.” Id. at 1108.33 

Therefore, what CAUSE-PA requires, in order for a rule restriction to survive 

our review, is that there be substantial evidence in the record showing a substantial 

reason why a restriction on competition is necessary, that is to say, there are no 

reasonable alternatives to restricting competition. Stated simply, the CAP-SOP, as 

it constitutes a restriction on competition, must be necessary. A restriction on 

competition is necessary when, one, there is a harm associated with competition and, 

two, there is no reasonable alternative to the rule that restricts competition. Id. at 

1103-04. PPL, CAUSE-PA, OCA, and I&E, as the proponents of PPL’s CAP-SOP, 

bore the burden of proof on both these showings, and, again, we review PUC’s 

determination on whether the proponents met their burden of proof under our 

substantial evidence standard.34

On the issue of harm, the evidence presented showed that between January 

2012 and October 31, 2015, on average, nearly 10,000 CAP customers each month 

 

33 One can say from the determination on the issue of early cancellation and termination 

fees that competition did not need to bend because such fees did not affect competition at all.

34 Substantial evidence is “such relevant evidence as a reasonable mind might accept as 

adequate to support a conclusion.” Emporium Water Co. v. Pa. Pub. Util. Comm’n, 955 A.2d 456, 

463 (Pa. Cmwlth. 2008) (citation omitted). Our review focuses “on whether there is rational 

support in the record, when reviewed as a whole, for the agency action.” Id. (citation omitted). In 

order to reverse, we “must conclude that the findings of the agency are totally without support in 

the record.” Id. (citation omitted). 
35

were paying above the PTC. (R.R. at 122a, 248a-49a.) These customers, together, 

were paying each month, on average, $298,406 more than had they simply paid the 

PTC. (R.R. at 123a, 147a.) Even when these overpaying CAP customers were 

considered together with those CAP customers who were paying below the PTC, the 

CAP was still more costly than the PTC, in the amount of $228,656 each month, or 

more than $2.7 million a year. (R.R. at 125a, 154a-55a.) This evidence was 

“unrefuted.” (PUC Op. and Order at 53, Oct. 27, 2016 (emphasis added).) This 

data did not focus “on a single point in time[;]” rather this data spanned 46 months. 

(RESA Br. at 48.) Thus, we disagree with RESA’s claim that this data, showing that 

about half of CAP shoppers each month were paying above the PTC, is “not 

reflective of the conditions experienced by CAP shoppers over their entire shopping 

experience.” (Id.) There is substantial evidence to support PUC’s finding this data 

demonstrated a pattern of a significant number of CAP customers overpaying for 

electricity.

Moreover, as a natural corollary to overpayment, there was substantial 

evidence that these CAP customers eroded their CAP credits more quickly. The data 

showed that between January 2012 through February 2016, 34,780 CAP customers 

were removed from the CAP, and of this number, 27,600 shopped with an EGS at 

some point. (R.R. at 264a.) Since CAP customers only pay a portion of their bill, 

non-CAP customers had to pay greater subsidies than had CAP customers simply 

paid the PTC. See CAUSE-PA, 120 A.3d at 1103 (noting that the Choice Act 

“expressly requires the PUC to administer [low-income programs such as the CAP] 

in a manner that is cost-effective for both the CAP participants and the non-CAP 

participants”). In short, substantial evidence supports PUC’s determination that 
36

unrestricted shopping for CAP customers was resulting in harm both to CAP and 

non-CAP customers.

Based on PUC’s determination that harm was occurring as a result of 

unrestricted competition, some restriction on competition was permitted. During the 

proceedings, the parties submitted their own proposals on how to mitigate the harm 

resulting from CAP shopping. With the exception of PPL’s initial proposal, all of 

the other proposals involved some restriction on competition. For example, both 

OCA and CAUSE-PA initially proposed a price ceiling, albeit at a rate higher than 

what PUC ultimately adopted. Only PPL proposed, at least initially, that CAP 

customers simply be encouraged to participate in PPL’s traditional SOP. However, 

the ALJ and PUC concluded that this alternative is not reasonable, which is 

supported by the fact that the traditional SOP has been available to CAP customers 

and it has not mitigated the harms associated with unrestricted shopping. (R.R. at 

157a, 188a, 190a.)

There is no evidence that the alternative RESA proposes now, which was not 

raised before PUC, to raise or eliminate the maximum CAP credits is reasonable or 

would mitigate the harm to non-CAP customers. Because RESA did not raise this 

before PUC, PUC did not have an opportunity to consider it and there is no record 

to support its reasonableness. There is an argument that this alternative may have 

the effect of exacerbating the harm to non-CAP customers. A CAP customer only 

pays a portion of his bill and, thus, having a CAP credit arguably creates an incentive 

for a CAP customer to seek the lowest price for electricity so as not to exhaust his 

CAP credits.

Given the foregoing, we conclude that PUC did not err in finding that 

proponents of the CAP-SOP proved, on this record, that there were no reasonable 
37

alternatives to restricting competition. It is clear that after months of discovery and 

several rounds of testimony, the experts and industry leaders involved in this 

proceeding could conceive of only a single alternative to restricting competition, and 

this restriction was not a reasonable one. In short, substantial evidence supports 

PUC’s determination on the lack of reasonable alternatives to restricting 

competition. Cf. CAUSE-PA, 120 A.3d at 1107 (noting that petitioners failed to 

convince PUC that customer education programs were not a reasonable alternative 

to price regulation).

Finally, there is substantial evidence in the record to support PUC’s 

conclusion that EGSs will participate in PPL’s CAP-SOP, and RESA’s contention 

to the contrary was speculative. The evidence in the record showed that there is 

extensive EGS participation in the traditional SOP, which is the model for PPL’s 

CAP-SOP, and that RESA represents only a portion of those EGSs who participate 

in PPL’s traditional SOP. (PUC Op. and Order at 59-61, 66, Oct. 27, 2016.) 

Moreover, even RESA’s own witness, White, could not “speculate on the reasons 

each EGS participates in a SOP.” (R.R. at 415a.)

C. Alleged Due Process Violation

1. Contentions of the Parties

RESA argues that its right to procedural due process was violated because the 

ultimate restrictions PUC adopted were not offered into the record until the rejoinder 

phase of the proceeding, which was after three rounds of written testimony and 

nearly five months of discovery. While RESA acknowledges that cross-examination 

was available on PPL’s rejoinder proposal, RESA argues that this is not the same as 

having a full and fair opportunity to consider a new proposal, seek discovery, and 
38

present responsive evidence. Once PPL decided to support the CAP-SOP CAUSEPA proposed, with modifications, PUC should have undertaken a full review of 

PPL’s USECP in order to afford RESA due process, as well as to comply with what 

this Court said in CAUSE-PA.

PUC responds that, assuming RESA has a protected property interest, RESA 

was afforded due process. While the CAP-SOP that was ultimately approved was 

introduced during the rejoinder phase of the proceeding, RESA had the opportunity 

to engage in cross-examination, along with other procedural actions, but it declined 

to do so. “It would be unrealistic, impossible and inefficient to require all proposals 

ultimately adopted to be introduced in the earliest stages of a proceeding.” (PUC 

Br. at 32.)

CAUSE-PA adds that RESA was put on notice, from the inception of this 

proceeding, that the issue of unrestricted CAP shopping was going to be litigated. 

Thereafter, at every stage of the proceeding – direct, rebuttal, sur-rebuttal, and 

rejoinder – the issue of reasonable and appropriate CAP shopping restrictions was 

discussed through the proposals the parties and Intervenors offered. RESA had the 

opportunity to respond to these proposals directly or it could have cross-examined 

the witnesses about these proposals. Since RESA did not object to any of the 

evidence that was admitted, and since it waived cross-examination, RESA “cannot 

readily complain about due process.” (CAUSE-PA Br. at 37-38.).

2. Waiver

Issues raised for the first time on appeal are waived, including most 

constitutional rights, such as the right to due process. Pa. Bankers Ass’n v. Pa. Dep’t 

of Banking, 962 A.2d 609, 621-22 (Pa. 2008); see Hudock v. Pa. Dep’t of Pub. 
39

Welfare, 808 A.2d 310, 313 n.4 (Pa. Cmwlth. 2002) (“When a party fails to raise an 

issue, even one of a constitutional dimension, in an agency proceeding, the issue is 

waived and cannot be considered for the first time in a judicial appeal”).

RESA never argued before PUC that it had been deprived of due process 

because the CAP-SOP that PUC ultimately approved was not proposed until PPL’s 

rejoinder testimony was waived. Even when RESA petitioned for

rescission/amendment of the October 27, 2016 Order, and argued that the details of 

PPL’s CAP-SOP were not placed into the record until PPL’s rejoinder, it did so in 

the context of requesting that the matter be remanded to the ALJ so that a full record 

might be developed on other reasonable alternatives, and not on the basis that RESA 

had been deprived of its constitutional right to due process. Moreover, RESA does 

not cite to the record in its brief showing where it raised this issue before PUC, as 

required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate 

Procedure, Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record 

does not reveal that this issue was raised before PUC. Therefore, we conclude that 

this issue is waived.35

Likewise, RESA’s complaint that the issue of the CAP should have been 

reviewed in the context of the USECP is also waived.36 In 2014, following PPL’s 

filing of its USECP, PUC concluded that CAP shopping was beyond the scope of 

the USECP proceeding and directed PPL to address its CAP as part of its next DSP. 

(R.R. at 102a, 119a.) RESA did not timely object to the issue of having CAP 

 

35 Even if the issue was not waived, assuming RESA has a protected property interest at 

stake, we would conclude that RESA was not deprived of due process.

36 RESA does not cite to the record in its brief showing where it raised this issue before 

PUC, as required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate Procedure, 

Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record does not reveal that this 

issue was raised before PUC. 
40

shopping addressed in that context. Instead, RESA addressed the issue of CAP 

shopping on the merits. See Commonwealth v. U.S. Mineral Prods. Co., 927 A.2d 

717, 734 n.11 (Pa. Cmwlth. 2007) (citation omitted) (noting that “one must object 

to errors, improprieties or irregularities at the earliest possible stage of the 

adjudicatory process to afford the jurist hearing the case the first occasion to remedy 

the wrong and possibly avoid an unnecessary appeal”), aff’d, 956 A.2d 967, 978 (Pa. 

2008).

D. Alleged Regulatory Taking

1. Contentions of the Parties

RESA argues that approval of PPL’s CAP-SOP constitutes a regulatory taking 

because it interferes with an EGS’s reasonable investment-backed expectations by 

denying it the economically viable use of its existing contract rights and potential 

future customers.

PUC responds that an EGS’s participation in PPL’s CAP-SOP is entirely 

voluntary and, therefore, there is no taking.

CAUSE-PA adds that PPL’s CAP-SOP does not constitute a regulatory taking 

because it does not foreclose all productive economic activity of any EGS in the 

Commonwealth. The CAP-SOP does not implicate any of the relationships that an 

EGS has with a non-CAP customer within PPL’s service territory.

2. Waiver

Again, as with RESA’s claims about being deprived of due process, its claim 

that PPL’s CAP-SOP constitutes a regulatory taking is waived because RESA did 
41

not raise this issue before PUC.37 See Tri-State Transfer Co., Inc. v. Dep’t of Envtl. 

Prot. Tinicum Twp., 722 A.2d 1129, 1132 (Pa. Cmwlth. 1999) (concluding that 

appellant’s claim that voiding of its solid waste permit constituted a regulatory 

taking was not raised before the Environmental Hearing Board and, therefore, the 

issue was waived).38

 

37 RESA does not cite to the record in its brief showing where it raised this issue before 

PUC, as required by Rules 2117(c) and 2119(e) of the Pennsylvania Rules of Appellate Procedure, 

Pa.R.A.P. 2117(c) and 2119(e), and our independent review of the record does not reveal that this 

issue was raised before PUC.

38 Even if we were to review this issue, we would conclude that PPL’s CAP-SOP does not 

constitute a taking because an EGS’s participation in the CAP-SOP, which affects a small 

percentage of PPL’s 1.4 million customers, is voluntary. N. Area Pers. Care Home Adm’rs. Ass’n 

v. Dep’t of Pub. Welfare, 899 A.2d 1182, 1191 (Pa. Cmwlth. 2006) (holding that because petitioner 

voluntarily participates in Medicare Program and is under no compulsion to provide services to 

Medicare residents, increased costs associated with new regulations promulgated by the 

Department of Public Welfare, which petitioner claimed it would be unable to recoup from 

Medicare, did not constitute a regulatory taking), aff’d per curiam, 919 A.2d 187 (Pa. 2007). 
42

III. Conclusion

For the reasons set forth above, we hold as follows: PUC has the authority 

under the Choice Act to implement PPL’s CAP-SOP and substantial evidence 

supports PUC’s determination to implement PPL’s CAP-SOP; PPL’s CAP-SOP 

does not result in governmental slamming; and RESA’s contentions that its due 

process rights were violated, that the issue of the CAP should have been reviewed 

in the context of the USECP, and that the CAP-SOP constitutes a regulatory taking 

are all waived. Therefore, we affirm the Opinions and Orders of PUC.

_____________________________________

RENÉE COHN JUBELIRER, Judge

Judge Fizzano Cannon did not participate in the decision in this case.
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Retail Energy Supply Association, :

Petitioner :

 :

v. : No. 230 C.D. 2017

 :

Pennsylvania Public Utility :

Commission, :

Respondent :

O R D E R

NOW, May 2, 2018, the Opinions and Orders of the Pennsylvania Public 

Utility Commission, entered October 27, 2016, and January 26, 2017, are hereby 

AFFIRMED.

_____________________________________

RENÉE COHN JUBELIRER, Judge
IN THE COMMONWEALTH COURT OF PENNSYLVANIA

Retail Energy Supply Association, :

Petitioner :

: No. 230 C.D. 2017

v. :

: Argued: December 6, 2017

Pennsylvania Public Utility :

Commission, :

Respondent :

BEFORE: HONORABLE MARY HANNAH LEAVITT, President Judge

HONORABLE RENÉE COHN JUBELIRER, Judge

HONORABLE ROBERT SIMPSON, Judge

HONORABLE PATRICIA A. McCULLOUGH, Judge

HONORABLE MICHAEL H. WOJCIK, Judge

CONCURRING OPINION 

BY JUDGE McCULLOUGH FILED: May 2, 2018

I concur with the analysis and result reached by the Majority because it 

appears that the Public Utility Commission (PUC) has implemented a rule consistent

with my recommendation in my dissent to Coalition for Affordable Utility Services 

and Energy Efficiency in Pennsylvania v. Pennsylvania Public Utility Commission, 

120 A.3d 1087, 1109 (Pa. Cmwlth. 2015) (McCullough, J., dissenting), appeal 

denied, 136 A.3d 983 (Pa. 2016). 

In Coalition, I agreed with the Court’s remand of the case for PUC

approval of a rule that would protect Customer Assistance Program (CAP) 

participants from early contract cancellation and termination fees that electric 

generation suppliers (EGSs) might otherwise impose. 120 A.3d 1109. However, I 

also noted that I would instruct the PUC on remand to approve a rule that would 
PAM - 2

impose a price ceiling on the EGSs that participate in PECO Energy Company’s 

(PECO’s) CAP shopping program, since the omission of such a protection for CAP 

customers would leave them vulnerable to possible bait and switch tactics by EGSs 

that the elimination of cancellation fees would not remedy. On that basis, I noted I 

would have remanded the case with the additional instruction that the PUC hold a 

hearing to determine whether universal service plans are properly funded and cost 

effective under section 2804(9) of the Electricity Generation Customer Choice and 

Competition Act (Choice Act), 66 Pa.C.S. §2804(9). 

Here, the PUC did consider that question and determined that the 

original CAP program was not for the reasons set forth by the Majority. See slip op. 

at 3, 7-8. Consequently, the PUC adopted the noted CAP-Standard Offer Program 

(CAP-SOP), which imposes price ceilings and thereby ensures that it is properly 

funded and cost effective in accordance with section 2804(9). With regard to 

whether the CAP-SOP program properly affords the necessary competition as 

contemplated by the Choice Act, I join the Majority’s holding that it does. 

________________________________

PATRICIA A. McCULLOUGH, Judge