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Connecticut Draft Order Would Ban Certain Rates, Require Mailed Notice of Variable Rate Changes

April 18, 2014

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Copyright 2010-13
Reporting by Karen Abbott •

A draft "interim" order in the Connecticut PURA's review of electric market consumer protections would prohibit retail suppliers from offering certain products to mass market customers via utility consolidated billing, and would also require suppliers to provide written notice of variable rate changes.

The interim order is prompted by the need for immediate changes to protect customers, the draft says. All other issues being considered in the case would be addressed in a future order, the draft says.

The draft would provide that, "prior to holding a Residential or Small Business customer responsible for a new rate or any new terms and conditions of service, a Supplier must provide such customer a written notification of any changes, at least 30 days in advance of such changes."

Such notice would take the form of a standardized Notice of Change in Rate or Terms and Conditions and must be sent by U.S. mail. The notice must be provided to the customer no later than 30 calendar days before the customer’s next billing cycle begins, the draft provides.

We read this requirement of the draft order as applying to all rate changes, including ongoing rate changes under a variable rate contract (not only rolling over from fixed to variable).

Notably, in discussing the rate notice requirement, the draft states: "The lack of notification regarding the change in rates under Variable plans is unreasonable, contributed to the problems and issues identified in this proceeding, and must be addressed immediately."

The draft interim order would prohibit electric suppliers from offering rates which change on a daily or weekly basis to residential or small business customers, unless such customers receive dual billing.

The draft would also revise the definition of Monthly Variable Rate such that a monthly variable rate would be defined as a rate that is fixed for one complete billing cycle and can change from cycle to cycle. A monthly variable rate would only be permitted to change on the customer’s meter reading date. No cancellation fees would be allowed on the product.

Furthermore, the draft would define Promotional Rate as a, "rate that is designed to increase or maintain customer enrollment and may include perks such as gift cards, airline mileage, and must not change for at least three complete billing cycles." A promotional rate would only be permitted to change on the customer’s meter reading date.

The draft order would revise the definition of fixed rate to provide that the rate shall be fixed for six billing cycles (versus the current 90 days).

The draft order would require each electric supplier to provide a one-time full disclosure to all of its existing customers of the terms of their service by providing a standard disclosure notice developed by PURA. Included with this notice would be a copy of the customer’s contract or agreement and a copy of the Terms and Conditions applicable to the customer.

The one-time full disclosure notice would require suppliers to list the "date" on which the contract ends, the "date" on which the current rate ends, and the rate after such end date (if such rate is not known, the supplier may list "unknown").

The draft would also establish a standardized notice to be sent to customers at the end of a fixed rate contract, that would be required to include the customer's rate for the next billing cycle if the customer does not take action in response to the notice.

Copies of the various customer notices proposed to be required under the draft would be required to be maintained by the supplier for three years.

The draft would also require suppliers to provide information to PURA regarding their use of third-party agents.

Docket 13-07-18

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