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Understanding Shopping Credits and Delivery Service Tariffs in Electric Restructuring

Explore the concept of shopping credits in the electric industry, comparing the experience in different states like Pennsylvania, California, and Massachusetts. Understand how retail margins impact consumer choices and the transition to Energy Service Providers. Learn about unbundled delivery services and the role of Power Exchanges in providing customers with access to wholesale market prices.

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Understanding Shopping Credits and Delivery Service Tariffs in Electric Restructuring

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  1. Electric Restructuring- Experience in other states

  2. Shopping Credits vs. Delivery Service Tariffs • Shopping Credit approach starts from retail price • When an ESP (Energy Service Provider) attracts a retail customer, the customer receives a “shopping credit” on his bill for each kWh that is now supplied by the ESP rather than the UDC (Utility Distribution Co)

  3. PA Shopping Credits • Consciously set above the wholesale price of electricity • Difference between credit and shopping credit is the retail margin • Retail margin can be shared with customers and used to cover retailing costs • Choice started 1/1/99

  4. CA Experience • Unbundled Delivery Services • Power Exchange (PX) similar to a poolco • Customer have direct access to the wholesale market price • Choice started 4/1/98

  5. Massachusetts • Unbundled “standard offer” generation service available from the distribution company • Choice started 4/1/98

  6. Customers Switching to ESPs in PA (Percentage of Load Served by ESPs) 1/7/00 (Choice started 1/1/99)

  7. Retail Customers Switching to ESPs in CA (as of December 15, 1999) Retail choice started 4/1/98

  8. Retail Customer Switching to ESPs in MA (as of Nov. 1999) Retail choice started 4/1/98

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