Energy Choice
                            

Matters

Regulator Orders Retail Supplier to Provide Refund to Customers Who Did Not Receive Contract Expiration Notices

July 13, 2015

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

A Connecticut PURA final decision requires Choice Energy, LLC to provide refunds to certain customers, who were served under a fixed rate contract, that PURA concludes did not receive a notice about a change in their generation price 30-60 days before the end of their contract as required under Connecticut General Statutes §16-245o(g)(1).

PA 13-119, codified as Conn. Gen. Stat. §16-245o(g)(1), became effective on October 1, 2013 and provided that, "Between thirty and sixty days, inclusive, prior to the expiration of a fixed price term for a residential customer, an electric supplier shall provide a written notice to such customer of any change to the customer's electric generation price."

The case concerns 3,809 Choice residential customers whose fixed prices expired in December 2013.

Choice Energy had argued that its welcome letter, which specifically stated that, "[t]he rate that you pay is fixed through December 2013, after which it may vary from month to month based on market conditions and our wholesale supply costs," provided sufficient disclosure to the consumers of the pricing terms that would govern at the end of the fixed price period

PURA found that the language in the welcome letter did not provide information required under Conn. Gen. Stat. §16-245o(g)(1) because the welcome letter did not identify a price that a customer would be charged at the end of their initial fixed rate term. Instead, the welcome letter informed customers that their price may vary from month to month.

"This letter is meaningless to electric generation customers because it merely informs them that their rates could possibly decrease or increase with no certain terms. The letter fails to inform when a customer's generation price will change and, if the rate were to change, whether it would increase or decrease," PURA said.

Choice Energy has already issued refunds to certain customers covered by the decision, and had proposed providing refunds to an additional subset of customers -- namely, about 1,100 customers that switched away from Choice Energy service soon after the expiration of their fixed rate. Choice Energy argued that refunds to customers who remained on Choice's rollover variable rate beyond two months are not appropriate since, after several billing periods, such customers were aware of the variable rate (as they would have been had Choice sent notices in the manner prescribed by PURA) and still elected to remain with Choice.

However, PURA found that refunds shall be issued to all 3,809 Choice residential customers whose fixed prices expired in December 2013

Under PURA's order, Choice Energy shall calculate the refund as the difference between the variable rate that was assessed to each customer in each billing cycle and its then-current Choice Energy fixed rate times the customer’s billed consumption for the period January 1, 2014 through each customer’s July 2014 meter reading date. The Authority said that it recognizes that Choice Energy may not be able to locate all the customers affected by this directive. Choice Energy must make a reasonable effort to locate all customers. The refund(s) associated with customers that cannot be located by Choice Energy shall be forwarded to Operation Fuel.

An exact total for the refund amount was not listed in PURA's order. In the proceeding, PURA has requested a calculation of the necessary refunds if they were provided for usage through year-end 2014, which amounted to $787,000, but as noted above, the ordered refunds must only be for usage through July 2014.

Notably, the ordered refunds are based on the difference between the rollover variable rate and the then-current Choice fixed rate. A draft would have required refunds to be based on either the Choice fixed rate or default service rate, whichever provided a greater refund amount to the customer

Choice Energy said that it is in the process of reviewing the CT PURA final order.

Docket 10-04-03RE01

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Business Development Manager - Indirect -- Texas/DFW
• NEW! -- Sales & Pricing Analyst I
• NEW! -- Business Development Manager (BDM) -- Retail Supplier -- Texas/Multiple States
• NEW! -- Sales Manager, Energy Solutions -- Retail Supplier
• NEW! -- Director of Digital Marketing -- DFW
• NEW! -- Vice President, Commercial Sales -- Retail Supplier -- Houston
• NEW! -- Director and Assistant General Manager -- Retail Supplier
• NEW! -- Manager, Business Analysis -- Retail Supplier
• NEW! -- Director, Operations -- Retail Supplier
• NEW! -- Business Development Manager – Broker Sales -- Retail Supplier
• NEW! -- Chief Supply Officer -- Retail Supplier
• NEW! -- Vice President, Global Regulatory Affairs -- Retail Supplier -- Houston
• NEW! -- Vice President - Supply, Pricing, and Risk Management -- Retail Provider -- Dallas
• NEW! -- Controller -- Retail Supplier -- Dallas
• NEW! -- Regional Sales Manager - Dallas, TX -- Retail Provider
• NEW! -- Senior Business Analyst -- Retail Provider -- Houston
• NEW! -- Billing Manager -- Retail Supplier -- Houston
• NEW! -- Business Development Analyst -- Retail Provider -- Houston