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Consumer Counsel Seeks To Require Suppliers To Always Charge "Next Month's Rate" Listed on Bill, Even Where Customer Agrees to Rate Change

June 23, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Electric suppliers should not be permitted to charge customers any rate for a month that varies from the rate listed on the previous month's bill as the rate for the next month, the Connecticut Office of Consumer Counsel said in comments to PURA

Under statute, electric distribution companies must display the generation rate that a licensed supplier will charge during the customer's next billing cycle (Next Rate) on the first page of residential electric bills. The Next Rate is intended to provide customers the specific rate that the supplier will charge for generation services for that upcoming billing cycle.

Certain stakeholders have questioned whether suppliers could modify the Next Rate once it had been provided to customers. For example, should suppliers be allowed to change the Next Rate for purposes of calculating the customer's generation cost if a customer contacts its then current supplier and negotiates a different rate or chooses another product with a rate that differs from the Next Rate?

The OCC said that Customers must be able to expect that the Next Rate will be used to calculate the generation cost of their bills for that upcoming billing cycle.

Accordingly, "[e]lectric suppliers cannot, under any circumstances, post a Next Rate that is one price and then actually charge a different rate the following month," OCC said.

"This bright-line rule does not foreclose suppliers from offering existing customers rebate checks or other incentives to retain them as customers. This bright-line rule does, however, avoid customer abuses that could ensue if suppliers were allowed to charge rates that varied from the Next Rate posted on the bill, including disputes over whether a customer knowingly and intentionally authorized a different rate to be charged. This clear interpretation also encourages suppliers to offer customers their best rates," OCC said

Connecticut Light & Power, however, noted that inclusion of the rate on the bill is intended to drive customer action, and may result in the customer negotiating a better rate with its current supplier.

"[I]f a customer contacts their supplier in reaction to receiving notice of the next month's rate and negotiates a new rate and/or contract term, there should be a level of flexibility built into the process to allow the supplier to be able to change the price or term effective with the next bill if made at the request of the customer. The Company does not believe that the customer's options should be limited to a return to standard service or a change of suppliers," CL&P said.

Suppliers filed similar comments.

CL&P stressed that, "It is important to note that the EDC's are not in a position to police supplier actions with regard to price changes. While a concern may exist with the gaming of 'next month's rate' by suppliers, the Authority is already well equipped to address the inappropriate actions of suppliers in this context. The existing rules and regulations surrounding 'slamming' should also apply to price changes that have not been agreed to by the customer."

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