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Draft Would Prohibit Use of Consolidated Billing for Variable Plans, Require Advance Notice of Rate Changes Under Any Plan, Limit All Contracts to One Year Maximum Duration

August 4, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

A Connecticut PURA draft decision would prohibit the use of utility consolidated billing for "variable plan" electric products

The draft, which largely implement recent customer protection legislation, also includes novel requirements in some areas.

"Variable Plan" products would be defined as any plan in which the rate can vary within a billing cycle. The draft would provide that for such plans:

• The customer must be directly billed by the electric supplier (i.e., consolidated billing is not allowed);

• Variable plans will not be posted to the PURA Rate Board;

• No cancellation or early termination fees allowed;

• Contract duration must be 1 year or less; and

• In addition to any notice requirements mandated by statutes and/or regulations, the supplier must notify the customer at least 72 hours in advance of any rate increase – such notice must clearly identify the current and increased rate per kWh.

The draft decision would define as a "Monthly Plan" product any plan in which the rate does not change within a billing cycle but is not fixed for a minimum of 4 complete billing cycles. Under such plans:

• The customer may be billed through consolidated billing;

• "Potential Savings" will not be posted on the Rate Board;

• No cancellation or early termination fees allowed;

• Contract duration must be 1 year or less; and

• In addition to any notice requirements mandated by statutes and/or regulations, the supplier must notify the customer at least 15 days in advance of any rate increase.

The draft decision would define as a "Fixed Price" product any plan in which the rate does not change for a minimum of 4 complete billing cycles. Under such plans:

• The customer may be billed through consolidated billing;

• "Potential Savings" will be posted on the Rate Board;

• Cancellation or early termination fee is capped at $50;

• Contract duration must be 1 year or less; and

• In addition to any notice requirements mandated by statutes and/or regulations, the supplier must notify the customer at least 15 days in advance of any rate increase.

As noted for each of the three plan types, for residential and small volume customers, suppliers would not be permitted to offer contracts lasting in excess of 12 months.

The draft notes that all other plans will be defined based on these three categories. "Thus, any plan in which the rate can vary within a billing cycle (even if based on a published index) would [be] considered to be a 'Variable Plan' subject to all conditions associated with Variable Plans. As another example, several electric suppliers have been offering plans with a 'guaranteed savings' (e.g., rate is guaranteed to be 10% lower than standard service if customer stays for 1 year). Under the new standard categories of generation service plans, such 'guaranteed savings' plan could be considered either a 'Variable Plan' if the rate varies within a billing cycle, or a 'Monthly Plan' if the rate does not change within the billing cycle but changes month to month. There have been so many different varieties of service plans, as each electric supplier sets to distinguish itself from other suppliers in the market," the draft states.

The draft would require electric suppliers to provide notification to residential and small non-residential customers of any increase in the customer’s generation rates. The Authority has also determined that this notice requirement shall apply to all existing contracts of Residential and Small Non-Residential customers, not just contracts entered into after the effective date of §16-245o(g)(3).

PURA's draft would require that each supplier contract must contain, conspicuously on the front page of the contract: (1) all customer accounts covered under the contract; (2) the beginning date and ending date of the contract; (3) the type of service plan (Variable, Monthly, or Fixed); (4) method and date of customer consent (e.g., telephone verification on 7/1/2014; computer enrollment on 7/2/2014); (5) all applicable fees, if any; (6) the supplier’s official and trade name (the name of the supplier’s corporate parent is insufficient), website link, and customer service address and phone number; (7) PURA’s contact information; (8) energizeCT.com; and (9) the provisions mandated by §16-245o(f)(2) (e.g., a clear and conspicuous statement explaining the rates that such customer will be paying, etc.).

The draft order would also provide that customers may ask the EDCs to place a "switch block" on their account, which would lead to the rejection of any enrollment by a supplier while in place (similar to New York).

The draft order also contains the format of required forms, which must be strictly followed, for several required notices, including:

• Quarterly rate disclosure notices

• End of Fixed Price term notices

• Notice of increase in generation rate

The draft also would establish the format for the posting of historic electric supplier pricing, and would require such information to initially be hosted on each supplier's website.

The same draft decision would also effectively prohibit suppliers from assigning customer contracts, such as through a sale, click here for related story

Docket 13-07-18

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