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Texas Staff: REPs' Duty To Communicate Demand Charges to Customers Applicable "Upon Enrollment"

May 13, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

"The duty [of retail electric providers] to disclose the applicability of demand charges is only upon enrollment, not after that time," Staff of the Public Utility Commission of Texas said in a statement of position concerning a complaint case regarding demand charges (all emphasis in original).

The complaint centers on a customer (Nawaid Isa) whose delivery schedule was changed by CenterPoint Energy Houston Electric after installation of an in-line pole to power a cricket field. The customer has disputed their REP's (Ambit Energy) pass-through of charges related to the reclassification

The complaint has implicated Subst. R. 25.481(b1)(1) which states that, "The REP shall inform the customer of the product or service being offered, including all associated charges, and explicitly inform the customer that the associated charges for the product or service will appear on the customer's electric bill."

In a statement of position, Staff noted that the responsibility of communicating billing and pricing information to the end-use customer generally lies with the REP given the nature of the relationships established by the unbundling of the electric market. "That said, the applicable rules could be interpreted to mean that the responsibility for the failure to communicate pricing terms in this case falls on Ambit; however, as the evidence shows, Ambit had no way of knowing what Complainant's usage would be prior to his enrollment because Complainant had no historical usage on his property. Moreover, during Complainant's first two months of service, his usage was below 10 KVA, which did not trigger CenterPoint's demand charge. Thus, Complainant was properly classified at enrollment," Staff said.

"The duty to disclose the applicability of demand charges is only upon enrollment, not after that time," Staff said.

"Complainant's usage spiked a few months after enrollment with Ambit. The spike in usage triggered CenterPoint's demand charge. The classification of Complainant's account as service under 10 KVA and related billings were accurate. There was no duty to communicate a greater than 10 KVA rate and associated demand ratchet because they did not apply at that time," Staff said.

"Ambit has also argued that it has no duty to make inquiries into a customer's usage or to provide notice to Complainant that his usage approached the trigger of the demand ratchet. Initially, and without all the facts, Staff had some concerns about this assertion because if neither the TDU nor the REP have this duty, then no one is required to explicitly inform an end-use customer of this information. Ambit stated that the information obtained in order to enroll Complainant only consisted of the name, premises address for service, billing address, tax ID, phone number, ESI ID, and that the electric service would not be residential. But, the problem was that Complainant had no historical usage on his property prior to enrollment and he did not inform Ambit of his intended use of the property. Had Complainant done so, Ambit would have realized the potential of triggering the demand ratchet," Staff said.

"The duty to disclose the applicability of demand charges is only upon enrollment, not after that time. Ambit did not violate any of its duties specifically prescribed by statute or rule. Given the evidence, Ambit technically satisfied its applicable requirements," Staff said.

"Ambit did not violate any of the Commission's applicable customer protection rules. The spirit of one of the Commission's overarching goals is to provide end-use customers with sufficient information to make informed decisions, but this broad customer protection goal does not trump the Commission's more specific provisions governing the end-use customer's relationship with REPs and TDUs," Staff said.

"Ambit had the duty [to provide rate information], and met the minimal requirements of that duty when it provided the notice based upon the information that it had pursuant to 16 Tex. Admin. Code §§ 25.475, 25.479, and 25.480 (TAC). Ambit's argument partially asserts that it was impossible for it to have known what Complainant's usage would be. While Ambit (and all REPs) should provide ample notice of applicable billing information, given the evidence, Ambit technically followed all of the applicable statutory and rule provisions. As stated by Ambit, 'Complainant was advised in the [Energy Facts Label] at the time of enrollment that his rate may change due to changes in TDSP charges.' That disclosure is all that is required by the applicable rules," Staff said.

Docket 42111

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