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Utility Tells PURA It Can't Comply With Plain Language of Statute Requiring Advance Notice of Default Service Rate Changes

October 14, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Connecticut Light and Power told PURA that it is "not possible" to prepare a bill insert informing customers of new Standard Service rates 45 days in advance as now required by statute for rates effective January 1, 2015, and that this requirement should also not be required for July 1, 2015 rates.

New statutory language requires that, "From the effective date of this section, and until one year after the effective date of this section, inclusive, each electric distribution company shall, on a quarterly basis, include the following items in a bill insert to each residential customer who obtains standard service or electric generation service from an electric supplier: (1) The standard service rate; (2) the term and expiration date of such rate; (3) any change to the standard service rate not later than forty-five days before the standard service rate is effective; and (4) before any reference to the term 'standard service', the name of the electric distribution company."

PURA noted that, "any proposed process must satisfy the requirement of Conn. Gen. Stat. §16-245d(c) that CL&P and UI notify residential customers of 'any change to the standard service rate not later than forty-five days before the standard service rate is effective.'"

In comments to PURA, CL&P said that, "it is not possible to prepare a bill insert with PURA approved rates to distribute to CL&P customers in time to meet the 45 day requirement," with respect to January 1, 2015 rates.

"Because of the timing of the Company's billing cycle, CL&P would need to begin sending out bill inserts by mid-October (about the time of this filing), which is about one month in advance of the Company's mid-November rates application filing for rates effective January 1st. Moreover, based on the current procurement schedule, CL&P has not yet completed procurement of power for the first half of 2015 as of the date of this letter. CL&P anticipates completing its procurement for the first half of 2015 later this month. Therefore, it is not possible to prepare a bill insert with PURA approved rates to distribute to CL&P customers in time to meet the 45 day requirement," CL&P said.

With respect to July 1, 2015 rates, CL&P said that its Standard Service procurement would have to be completed by early March, in order for CL&P to complete the key tasks required for bill inserts for July 1 rate changes. "In order to comply with the 45 day rule, the latest date that CL&P must complete its notification to its customers would be on or about May 15, 2015. This would necessitate advancing the procurement schedule at least two months. However, advancing the schedule by this amount could negatively affect the procurement process since, in general, an earlier procurement schedule will result in higher risk premiums. This will, in turn, likely result in higher rates for customers," CL&P said.

"As a reasonable and achievable alternative to bill inserts, CL&P proposes to issue a press release once the Standard Service rates are approved, and simultaneously post the information contained in the press release on its company website. The press release and posting on the CL&P's website would be in the spirit of the necessary notice which the statutory amendments were intended to address," CL&P said.

CL&P's proposal was supported by the state's procurement manager and UI.

Regardless of the merits of CL&P's arguments, its proposal is plainly inconsistent with statute.

We are therefore keen to see how PURA will address this inconsistency, given that in its October 10 draft decision regarding similar statutory changes for retail suppliers, PURA denied similar logistical and technical arguments for slight deviation in the letter, but not spirit, of the new statutory requirements, because PURA emphasized that such proposals would contradict the "express language" of the statute.

Here, the "express language" of the statute requires 45 days advance notice via bill insert of Standard Service rate changes, and if that is the standard on which PURA is judging the new statutes, CL&P's proposal must be dismissed out of hand.

Docket 14-01-01

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