Default Provider: Conclusions, Recommendations, and Implications of CAEM's Study

Session 2
Identification of Various Models:
Pros & Cons and Case Studies
9:30 a.m. – 10:15 a.m.


Panelists:
Ken Malloy, CAEM CEO
Calvin Timmerman, Chief Economist and Director of Rate Research, Maryland Public Service Commission
Wayne Harbaugh,
Manager Pricing & Regulatory Services, Baltimore Gas & Electric
Michael Swider, Manager, Regulatory Affairs and Government Relations, Strategic Energy

Georgia’s natural gas policy is the most aggressive default provider model, where customers who did not choose were assigned to competitive suppliers. Texas and the United Kingdom have adopted policies of assigning all customers to a retail supplier. Pennsylvania has adopted a shopping credit approach. New Jersey has adopted a bidding scheme for blocks of customers to be served by a competitive supplier. Maine also has a program for bidding on default provider service. California adopted a default provider service that required utilities to buy from the spot market, but also to sell at a fixed price to retail customers.

Most states, however, have adopted a default provider service that merely maintains a more-or-less regulated option that exists side by side with customer choosing to leave this option for service by a competitive supplier. Some states have developed default policy on the basis of customer class, i.e., traditional service for mass-market customers and choice options for larger customers. Some states have given customers the right to choose a product that is delivered by the distribution company, but purchased by the distribution company from a competitive supplier, i.e., green power.

This session will identify the various models and where they are being implemented and answer the following questions:

  • Who is doing what, and why?
  • What are the major similarities, differences?
  • What are the trends?