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Retail Supplier Seeks Modification of PURA Order Opening Investigation, Due to "Unsubstantiated and Erroneous" Findings Connecticut Gas & Electric Inc. petitioned the Connecticut PURA to re-open and modify, or withdraw, a June order commencing an investigation and ordering certain compliance measures against the company concerning what PURA termed "daily variable" rates, as Connecticut Gas & Electric argued that PURA's decision was based on unsubstantiated and erroneous "factual" findings.
Specifically, the June decision asserts that "[o]n or about June 4, 2013, the Authority became aware for the first time that [CTG&E] has been offering generation rates that vary on a daily basis;" that according to CTG&E 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."
However, CTG&E explained that it does not use "daily variable" rates as defined in this manner, and PURA's description appears to result from a misinterpretation of an explanation provided to Staff.
CTG&E explained that under its variable rate program, every customer who enrolls in a CTG&E current offer is provided with a rate which is maintained (at a minimum) for their first billing cycle.
Consistent with the company's Terms and Conditions, CTG&E said that after the first billing cycle the variable rate is determined monthly by a calculation of CTG&E's rolling 30 day average costs to service customers taking into account wholesale market cost factors, including load ratio, electricity market pricing, transportation or transmission costs, and utility charges.
"More specifically, three business days prior to a customer's meter read date, those costs are applied to the customers based on each individual customer's utility profile data and service class assignment across the utility class and an individual customer retail rate for the billing cycle is determined by CTG&E and sent to the utility. The 30 day weighted average cost to serve is constructed at the aggregate level for all customers with the same meter read date within the same customer class and ISO-NE Load Zone. This variable pricing method allows CTG&E to provide its customer with a competitive rate that can react quickly to market changes that affect customer energy costs," CTG&E said.
"Therefore, although the Company's wholesale costs may change within the billing cycle, the customer's retail rate does not 'vary daily,' nor is the rate an 'average of all the variable daily rates in the entire billing month' as erroneously described in the Decision," CTG&E said.
Among other relief, CTG&E sought an order that its rates are not "daily variable" rates as defined in the June decision.
The June decision requires, for customers on "daily variable" rates, that CTG&E return each customer to the initial generation rate at which the customers signed up for a period of at least 60 days. To the extent this applies to CTG&E's variable rate customers, which PURA has misinterpreted as daily variable rate customers, CTG&E said that compliance with this order, "would require the Company to violate the contracts between CTG&E and its customers."
"The Orders would also cause one of two economic results: (1) if a customer's initial generation rate was higher than the subsequent variable rate, CTG&E would charge under the contract, the customer will pay more than the contract rate; or (2) if the customer's initial generation rate was lower than the subsequent variable rate that CTG&E would charge under the contract, CTG&E will suffer an uncompensated economic loss without due process," CTG&E said.
CTG&E said that the situation has been exacerbated by PURA's decision to deny CTG&E an opportunity to comment on a draft order which preceded the final June order opening the investigation.
CTG&E also said that while it does not offer a "daily variable" rate as defined by PURA, PURA's decision implies that daily variable rates are only permissible if a supplier can (1) obtain from the utility each customer's actual daily usages, and (2) show on each customer's bill daily usages and the corresponding generation rate-of-the day. "While the Company believes it does not offer 'daily variable rates' as described in the Decision, to CTG&E's knowledge, there are no statutes, PURA regulations or PURA Decisions prohibiting daily variable pricing or placing conditions on daily variable rates resembling the conditions the Decision imposes on CTG&E's variable rate. Absent any such statute, regulation or decision, the Authority lacks statutory authority to impose those conditions on CTG&E," CTG&E said.
"Notably, during the Authority's deliberations regarding the Draft Decision, PURA Staff confirmed that suppliers can offer daily variable rates as long as they are properly disclosed to customers," CTG&E said.
Docket 11-06-11
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July 11, 2013
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Reporting by Paul Ring • ring@energychoicematters.com
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