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Presentation of Supplier Enrollment Fees on Rate Board, Impact on Price Ranking Draws Attention from Competitors, Regulator

June 12, 2015

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

The practice of certain retail suppliers to charge an enrollment fee to customers, and how this fee should be presented on the Connecticut PURA rate board, has drawn attention from competing suppliers in the market as well as PURA.

Certain suppliers in Connecticut have begun offering rates that include an enrollment fee. At the time of publication, Public Power charges an enrollment fee of $50 to $75 for residential customers, depending on contract term length and volumetric price. It was unclear if other suppliers had been charging enrollment fees but have since the supplier workgroup meeting ceased such practice.

The price per kWh that is submitted for these offers on the PURA rate board does not reflect the enrollment fee and that rate is used to: 1) determine the supplier's placement on the rate board (lowest rate at the top) and 2) to calculate potential savings on the rate board.

Certain stakeholders believe that the $50 fee is material in the value proposition to the customer and is not being properly accounted for on the rate board. Certain stakeholders expressed concern that by failing to include enrollment fees in the math of any ranking or calculation of savings, PURA is providing less-than-accurate information to consumers.

Certain Stakeholders also noted that allowing such offers to remain at the top of the list is unfair to other suppliers. If not corrected, this will have the impact of having other suppliers follow suit in looking for creative ways to get to the top of the rate board without actually having to provide more value or be more competitive, these stakeholders warned

The concept of an enrollment fee itself was not an issue of concern for suppliers, but rather treatment on the rate board. In an environment where the cancellation fee is limited to $50, an enrollment fee may actually be the only way for suppliers to manage their risk adequately during certain periods of the year, these suppliers noted. However, these suppliers believe it's fair to consumers and the supply community if these fees are clearly built into the value proposition that the rate board showcases so that customers are really comparing apples to apples. Suppliers have suggested including the statement "No enrollment fee" for any offer that does not require this fee.

At the May working group meeting, PURA Staff noted that the rate board is not set up to include an enrollment fee in the savings calculation. The Authority will consider including such a calculation as it moves forward with changes to the rate board.

Regarding use of the phrase "No enrollment fee", Staff said at the May workgroup meeting that the Authority will not add that to the rate board at this time, but will consider doing so going forward. The Authority said that it will include information in its rate board disclaimer to note that savings do not include the cost of enrollment fees.

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