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Conn. Draft Would Require Standard Service Price on All Bills, Delegate Consolidated Billing Fees to Working Group

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February 21, 2011  

A draft Connecticut DPUC decision would require electric distribution companies (EDCs) to list the applicable Standard Service rate on all utility bills, even utility consolidated bills with supplier charges, and would also require EDCs and suppliers to complete customer enrollments and pricing changes during the middle of the billing cycle (Docket 10-06-24).

Among other key findings in the draft order concerning the DPUC's review of a multitude of marketing and supplier-related topics, the draft would conclude that the supplier referral program has met the Legislature's goal of educating customers about the retail market, and would seek guidance from the Legislature on the future of the program.  Also contained in the draft is a new requirement to post all residential and non-negotiated business rates on the CT Energy Info rate board.

See our 9/8 story for the DPUC's original proposals on marketing guidelines which led to the current draft.

The draft decision would allow suppliers, at their discretion, to direct bill (dual bill) any customer, but would prohibit the EDCs from requiring suppliers to offer direct billing.  Additionally, the draft would decline to implement a fee for EDC-provided consolidated billing; however, it would establish a working group to examine the issue.

Furthermore, the draft would require the EDCs, "to include their current Standard Service generation rate on the electric bill of those customers who have selected an alternate Supplier."  The working group would also examine, "whether the EDCs can calculate and display customer savings associated with choosing an alternate Supplier on the electric bill."

Because "[t]he Department finds that it will take some time before this [retail electric] market is considered mature," the draft would continue to require suppliers to post prices on the CT Energy Info rate board because, absent the rate board, "there is no single resource consumers can access to compare Supplier offers and get the information they need to learn about retail choice."

The draft would also expand the rates required to be posted to include "all residential and business offers (except negotiated rates)."

Specifically, this requirement includes targeted "value add" residential products generally marketed only to specific customers under certain reward/affinity plans (the model used by Energy Plus Holdings, LLC, for example).

Another new requirement for the rate board under the draft is that suppliers would be required to list, for all offers, "the dates on which each price becomes available and when it ends."

The DPUC would expand the product categories used for the rate board to include the following, and allow customers to sort by each of these categories:

The draft would require EDCs to complete switches during the middle of a billing cycle, to speed the current enrollment process which can take up to seven weeks.  Similarly, suppliers would be required to allow their existing customers to switch to new rate plans effective in the middle of a billing cycle.

To accomplish mid-cycle enrollments, the draft would require the EDCs to establish procedures that will allow customers to switch suppliers, and begin to be billed under the 'new' supplier's price, within seven business days of receiving the change order from that supplier.  The EDCs must prorate the generation portion of the customer's bill accordingly.

EDCs and suppliers would also be required to establish systems to address a non-switching customer's request to change price plans with their current supplier, and to adjust the generation price within seven business days from the time a customer requests the change.

The draft does not indicate that any charge would be levied on suppliers or customers for mid-cycle enrollments or price changes.

Regarding the supplier referral program, the draft notes that there have generally been only three or four Qualifying Electric Offers under the referral program available at any one time, while there are approximately 35 offers on the rate board.  "It would be inappropriate to isolate, or otherwise focus attention exclusively on, Qualifying Electric Offers," the draft states.

Given the active number of suppliers not using the referral program, the draft would conclude, "that the Amended Referral Program has outlived its usefulness, and at this point, adds customer confusion and unnecessary operating expenses to the EDCs."  As the program is required by statute, the Department would ask the Legislature for guidance on possible modification of the statute to reflect the evolution of the marketplace.

The draft would adopt a set of "voluntary" Guidelines for Marketing and Sales Practices, based on those previously proposed in the docket.  The voluntary guidelines contained in the draft omit several key provisions, discussed below, given the current legislative consideration of similar issues.  "[D]uring the pendency of the 2011 session, the Department strongly urges all Suppliers and Aggregators to voluntarily comply with the intent and sprit of the Guidelines," contained in the draft.

At the conclusion of the 2011 session, the Department would re-open this docket for the purpose of: 1) implementing any Code passed by the General Assembly, 2) modifying the Guidelines to conform with the actions of the General Assembly, or 3) if no action has been taken by the General Assembly, entering the Guidelines as an Order of the Department.

Among other things, the voluntary marketing guidelines contained in the draft order do not contain any limits on residential termination fees, as was originally proposed.

Additionally, the voluntary marketing guidelines do not provide a customer on a product which automatically renews a 7-day grace period, after the first bill under the renewed contract, during which time the customer could cancel the renewal without penalty.

Instead, the draft would require suppliers to provide customers on a product that automatically renews at least 30-days notice of the renewal.  While suppliers would only have to give a minimum of 30 days notice, customers would be given a 45 day period from such notice to decline the renewal without penalty; accordingly, depending on when the supplier sends the renewal notice, the customer could reject the renewal without penalty after the renewal occurs, though the time period would still be considerably shorter than seven days after the first renewal bill.

The voluntary guidelines also expand the permissible hours for residential door-to-door marketing, where not controlled by local ordinance, to the hours between 9 a.m. and 7 p.m., versus the original proposal of 10:00 a.m. to 6:00 p.m.

The draft voluntary guidelines retain the earlier proposal that background checks shall be conducted on all door-to-door agents, and that customers must be provided with a stand-alone "NOTICE OF RIGHT TO CANCEL," which follows standard language developed by the DPUC.

The draft would put suppliers and aggregators, "on notice that they are responsible for the actions of their agents, and that the Department expects each Supplier and Aggregator to actively monitor the conduct and activities of all entities authorized to market, sell or support such Supplier or Aggregator."

The draft would affirm the DPUC's earlier decision in Levco Tech in which the Department found that an aggregator must act as the customer's agent, and may not represent the interests of a supplier.  The draft would lift the temporary suspension of aggregator certifications, but, "the Department will set a high standard for such applications, and will register only entities that commit to adhere to, and operate in accordance with, the language and intent of the law as Aggregators in Connecticut."

Additionally, the draft notes that many licensed aggregators currently have business relationships or arrangements with suppliers that would not be consistent with the Department's rulings that the aggregator must represent the customer.

The draft would require every licensed supplier and registered aggregator to provide, within 30 days, either (1) an affidavit attesting that the supplier or aggregator does not currently have an agency relationship with an aggregator or supplier that would be inconsistent with the Department's rulings; or (2) a listing of all aggregators or suppliers with whom such supplier or aggregator currently has an agency relationship or arrangement, and a description of such relationship (e.g., sales, marketing, customer service).  "Any Aggregator who wishes to retain an existing agency relationship with a Supplier should immediately surrender its Aggregator registration by notifying the Department in writing.  For any Supplier or Aggregator who fails to respond within 30 days as directed herein, the Department will take appropriate action, including initiating revocation proceedings or issuing a civil penalty as authorized by Conn. Gen. Stat. §16-41.  The Department will revoke the registration certificates of any Aggregator who (a) continues to operate contrary to these rulings; or (b) enters into an agency agreement with any Supplier; or (c) has any types of business relationship or arrangement with a Supplier; or (d) whose aggregation services are inconsistent with the language or intent of Conn. Gen. Stat. §16-1(a)(31) and 16-245(l)," the draft states.

Finally, the draft would decline to prohibit three-way calls initiated by suppliers and customers to the EDC to obtain the customer's information.  While EDCs asked that such calls be prohibited due to customer privacy concerns, the DPUC said that such concerns could be mitigated by simply having the EDCs during such calls: (1) inform the customer that state laws prohibit the EDC from disclosing certain information of the customer's account to third parties without the customer's consent; (2) warn the customer that the customer's personal account information may be disclosed during the call; and (3) ask the customer for consent to disclose such information to the third-party on the phone.

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