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Connecticut Considering Investigation of Retail Supplier's Use of Daily Rates, Blending for Residential Customers, Compliance with Rate Board The Connecticut PURA has issued a draft order which would open an investigation into Connecticut Gas & Electric, Inc. (CGE) concerning the supplier's alleged use of daily variable rates for residential customers and the reporting of such rates.
According to the draft order:
"On or about April 30, 2013, the Authority was contacted by a news reporter regarding customer complaints alleging that the electric generation rate they were being charged by CGE did not match CGE's rate posted on the Rate Board. All generation rates posted on the Rate Board are rates reported by each electric supplier on the Electric Supplier Price Form..."
"On or about June 4, 2013, the Authority became aware for the first time that CGE has been offering generation rates that vary on a daily basis. According to the Company, its 'Variable Prices,' as reported to the Authority on the Electric Supplier Price Forms, vary on a daily basis, and each customer's bill is calculated based on the customer's total usage for the month as of the meter read date, and the rate that is applied to the total monthly usage is a 'blended rate,' which is an average of all the variable daily rates in the entire billing month," the draft continues.
"The Authority is concerned with CGE's business practices," the draft would state.
"First, CGE seems to have been in noncompliant with state laws and the Authority's orders concerning reporting to the Authority all current rates being offered to customers," the draft alleges.
"Second, CGE seems to have misled customers because it is questionable whether the Company's daily variable rates would ever exactly match the rates that CGE reported to the Rate Board," the draft alleges.
"Finally, since a 'blended rate' is the average of all the daily rates in a given billing month, it seems that the Company would not even be able to inform the customers what their actual generate rates would be until after the billing periods have ended," the draft states.
Based on the foregoing, the draft would commence an investigation to determine whether CGE's pricing and marketing conduct constitute an unfair or deceptive trade practice in violation of Connecticut state laws.
Additionally, the draft would order that:
• Starting immediately and until the Authority issues its final rulings at the end of its investigation, CGE shall not charge any Connecticut customers any daily variable generation rates unless (a) the company can obtain from the electric distribution companies each customer's actual daily usages, and (b) the company can show on each customer's bill daily usages and the corresponding generation rate-of-the-day.
• For any customers currently enrolled in a daily variable rate, CGE shall (a) honor, for a minimum of 60 days following the date of the Authority's decision, the generation rate at which the customers signed up; and (b) issue a notice to each such customer describing: (i) the rate the customer is being charged, (ii) the expiration date of this rate, and (iii) the new rate and terms that will apply after the expiration date. No later than 10 days after the date of the Authority's decision, CGE shall submit a draft of this customer notice for the Authority's review and approval.
• No later than June 28, 2013, CGE shall submit to the Authority various information and documentation, including the number of bills issued using a blended rate; copies of marketing materials and scripts; and copies of customer contracts and terms and conditions.
The draft order is scheduled to be considered on June 13.
Connecticut Gas & Electric is a wholly owned subsidiary of Energy Service Providers, Inc., which itself is owned by U.S. Gas & Electric, Inc.
Docket 11-06-11
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June 11, 2013
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Reporting by Paul Ring • ring@energychoicematters.com
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