Feds to Texas: Regulate Retail Electric Providers' Marketing Claims for Demand Response Products March 13, 2013 Email This Story Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
The Public Utility Commission of Texas should consider, "developing simple, clear model disclosures that describe actual cost savings, measured fairly," regarding demand response and similar offerings from retail electric providers, the Staff of the Federal Trade Commission said in comments to the PUCT in a project concerning demand response (41061).
The FTC Staff said that, "[a] competitive retailer that offers a DR [demand response] program will seek to recruit customers by claiming that its DR program offers savings."
"We recommend that Texas consumer protection authorities take action if advertisements or disclosures regarding savings are misleading or deceptive," the FTC Staff said.
"Consumer protection authorities in Texas may find it helpful to consider developing simple, clear model disclosures that describe actual cost savings, measured fairly," the FTC Staff said.
Additionally, the FTC Staff said that, "to the extent that DR programs produce savings in regulated transmission and distribution charges, the PUC [should] approve distribution rates that appropriately pass these savings on to residential customers" [emphasis added]
Note that the FTC Staff says that these savings should be passed onto residential customers despite customers having no obligation to pay transmission and distribution charges to the utility (as such charges are billed to the REP, which then recovers the charges in its all-in retail rate).
While the PUCT has, in the past, mandated that REPs pass-through to customers certain merger-related customer credits as a condition of receiving the credits (see prior story), the Commission's legal authority to order REPs to provide distribution credits to customers, given that the REPs are the entities charged for and responsible for paying for distribution service regardless of payment by the customer, has been contested by REPs.