CERTIFICATE OF SERVICE Pennsylvania Public Utility Commission : : v. : Docket No. R-2018-3000164 : PECO Energy Company : I hereby certify that I have this day served a true copy of the following document, the Office of Consumer Advocate s Formal Complaint and Public Statement, upon parties of record in this processing in accordance with the requirements of 52 Pa. Code 1.54 (relating to service by a participant), in the manner and upon the persons listed below: Dated this 12 th day of April 2018. SERVICE BY E-MAIL & INTER-OFFICE MAIL The Honorable Charles E. Rainey, Jr. Carrie B. Wright, Esquire Chief Administrative Law Judge Bureau of Investigation & Enforcement Bureau of Investigation & Enforcement Commonwealth Keystone Building Commonwealth Keystone Building 400 North Street, 2 nd Floor 400 North Street Harrisburg, PA 17120 Harrisburg, PA 17120 Paul Diskin, Director Bureau of Technical Utility Services Pennsylvania Public Utility Commission 400 North Street Harrisburg, PA 17120 SERVICE BY E-MAIL & FIRST CLASS MAIL, POSTAGE PREPAID Elizabeth Rose Triscari Patrick M. Cicero, Esquire Deputy Small Business Advocate Elizabeth R. Marx, Esquire Pennsylvania Office of Small Business Advocate Kadeem G. Morris, Esquire 300 North Street, Suite 202 118 Locust Street Harrisburg, PA 17101 Harrisburg, PA 17101
Romula L. Diaz, Jr., Esquire Kenneth M. Kulak, Esquire Jack R. Garfinkle, Esquire Anthony C. DeCusatis, Esquire W. Craig Williams, Esquire Morgan, Lewis & Brockius LLP Michael S. Swerling, Esquire 1701 Market Street PECO Energy Company Philadelphia, PA 19101 2301 Market Street P.O. Box 8699 Philadelphia, PA 19101 /s/christy M. Appleby Christy M. Appleby Assistant Consumer Advocate PA Attorney I.D. # 85824 E-Mail: CAppleby@paoca.org Hayley E. Dunn Assistant Consumer Advocate PA Attorney I.D. # 324763 E-Mail: HDunn@paoca.org Aron J. Beatty Senior Assistant Consumer Advocate PA Attorney I.D. # 86625 E-Mail: ABeatty@paoca.org Counsel for Office of Consumer Advocate 555 Walnut Street 5 th Floor, Forum Place Harrisburg, PA 17101-1923 Phone: (717) 783-5048 Fax: (717) 783-7152 *246329
PENNSYLVANIA PUBLIC UTILITY COMMISSION Formal Complaint 1. CUSTOMER NAME (COMPLAINANT) Tanya J. McCloskey, Acting Consumer Advocate 555 Walnut Street 5 th Floor, Forum Place Harrisburg, PA 17101-1923 Phone: (717) 783-5048 Fax: (717) 783-7152 2. UTILITY NAME (RESPONDENT) PECO Energy Company Electric Division Docket No. R-2018-3000164 3. TYPE OF UTILITY Electric 4. COMPLAINT A. On March 29, 2018, PECO Energy Company (PECO or the Company), filed Tariff Electric Pa. P.U.C. No. at Docket No. R-2018-3000164 in which it proposes to increase its electric distribution rates by $81.9 million, or 6.7%, on a distribution revenue basis. On a total revenue basis (distribution, transmission, and generation), the increase is 2.2%. The Company proposes that the proposed rate increase become effective on May 28, 2018. B. PECO is engaged in the business of providing electric distribution service to approximately 1.6 million residential, commercial, and industrial customers in southeastern Pennsylvania in all or parts of Bucks, Chester, Delaware, Montgomery, Philadelphia, and York Counties. C. Under the Company s proposal, the total monthly bill (including distribution, transmission, and generation charges) for a residential customer using 700 kilowatt hours (kwh) per month is estimated to increase from $102.65 to $105.93, or by 3.2%. As part of its filing, PECO proposes to increase the current monthly residential customer charge by approximately 48%, from $8.45 to $12.50. D. PECO notes that its proposed rate increase reflects $71 million in tax savings in 2019 resulting from the Tax Cuts and Jobs Act (TCJA) and the Company proposes to refund to ratepayers approximately $68 million in reduced tax expense for 2018 through a surcharge mechanism. 1
E. In its base rate filing, the Company utilizes a fully projected future test year (FPFTY) ending December 31, 2019. F. PECO s proposed rate increase, if approved, would produce a 7.79% overall rate of return on its original cost rate base and a 10.95% return on common equity. G. PECO s Tariff Supplement No. 6 also proposes to recover investments and expenses associated with several new programs. The Company proposes to implement an Electric Vehicle Pilot Rider to support publicly available or workplace fleet fast chargers for Electric Vehicles. Through the pilot Rider, PECO seeks to provide a fixed demand credit, initially equal to 50% of the combined maximum nameplate capacity for all of the Direct Current Fast Chargers connected to the service. The Company also proposes to implement a new smart street lighting rate for outdoor lighting for any governmental agency. H. The Consumer Advocate is empowered to represent the interests of Pennsylvania consumers before the Pennsylvania Public Utility Commission (Commission), pursuant to Act 161 of the General Assembly, as amended, 71 P.S. 309-1, et seq. I. A preliminary examination of PECO s proposed Tariff Supplement No. 6 indicates that the charges, increases and changes in rates, rules and programs are or may be unjust, unreasonable, and in violation of the Pennsylvania Public Utility Code, 66 Pa. C.S. 1301 et seq., and otherwise may be contrary to sound ratemaking principles and public policy. J. The Acting Consumer Advocate avers that the proposed tariff changes and proposed rate design may be unjust, unreasonable, and unlawfully discriminatory in violation of the Public Utility Code, 66 Pa. C.S. 1301 and 1304, et seq., and may otherwise be contrary to sound ratemaking principles and public policy. K. The Acting Consumer Advocate also avers that the Company s existing rates, rules, and regulations are or may not be just and reasonable or otherwise proper under the Public Utility Code, 66 Pa. C.S. 1301, et seq., and applicable ratemaking principles. L. The Acting Consumer Advocate further avers that the Company s existing rates may not properly reflect the 2018 tax expense savings resulting from the TCJA, which should be timely returned to customers. M. The Acting Consumer Advocate files this Formal Complaint to ensure that the Commission will fully and fairly adjudicate issues pertaining to whether the Company s existing and proposed rates and all rate policy changes are unjust, unreasonable, unduly discriminatory, or otherwise unlawful. 2
7. LEGAL REPRESENTATION Aron J. Beatty, Senior Assistant Consumer Advocate, PA Attorney I.D. #86625 Christy M. Appleby, Assistant Consumer Advocate, PA Attorney I.D. #85824 Hayley E. Dunn, Assistant Consumer Advocate, PA Attorney I.D. #324763 555 Walnut Street 5 th Floor, Forum Place Harrisburg, PA 17101-1923 Dauphin County Phone: (717) 783-5048 Fax: (717) 783-7152 Email: ABeatty@paoca.org CAppleby@paoca.org HDunn@paoca.org 4
PUBLIC STATEMENT OF THE OFFICE OF CONSUMER ADVOCATE PURSUANT TO 71 P.S. SECTION 309-4(e) Act 161 of the Pennsylvania General Assembly, 71 P.S. 309-2, as enacted July 9, 1976, authorizes the Consumer Advocate to represent the interests of consumers before the Pennsylvania Public Utility Commission (Commission). In accordance with Act 161, and for the following reasons, the Acting Consumer Advocate determined to file a Formal Complaint and participate in proceedings before the Commission involving the proposed rate increase requested by PECO Energy Company (PECO or the Company). PECO is engaged in the business of providing electric distribution service to approximately 1.6 million residential, commercial, and industrial customers in southeastern Pennsylvania in all or parts of Bucks, Chester, Delaware, Montgomery, Philadelphia, and York Counties. On March 29, 2018, the Company filed Tariff Pa. P.U.C. No. 6 in which it proposes to increase its electric distribution rates by $81.9 million, or 6.7% on a distribution revenue basis. On a total revenue basis (distribution, transmission, and generation), the increase is 2.2%. PECO proposes that the proposed rate increase become effective on May 28, 2018. Under the Company s proposal, the total monthly bill (including distribution, transmission, and generation charges) for a residential customer using 700 kilowatt hours (kwh) per month is estimated increase from $102.65 to $105.93, or by 3.2%. As part of its filing, PECO proposes to increase the current monthly residential customer charge by approximately 48%, from $8.45 to $12.50. The Company s proposed rate increase, if approved, would produce a 7.79% overall rate of return on its original cost rate base, including a 10.95% return on common equity. Further, in Tariff Supplement No. 6, PECO proposes to recover investments and expenses associated with new programs, including an Electric Vehicle Pilot Rider to support publicly available or workplace 5
fleet fast chargers for Electric Vehicles and a new smart street lighting rate for outdoor lighting for any governmental agency. The Acting Consumer Advocate will participate in this proceeding in order to determine whether the rate increase and other tariff policy changes proposed by PECO are just and reasonable. The Acting Consumer Advocate will represent the interests of PECO s customers before the Commission and seek to ensure that customers are not charged rates that are unjust, unreasonable, unduly discriminatory, or otherwise inconsistent with the Public Utility Code, sound ratemaking principles, and public policy. The Acting Consumer Advocate will also examine the Company s existing rates to determine whether these rates properly reflect the 2018 tax expense savings resulting from the Tax Cuts and Jobs Act (TCJA), which should be timely returned to customers. 6