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Connecticut Adopts Final Order Addressing Changes in Required Listing of Supplier's Next Month Rate on Bills (Also Confirms Incidental Residential Accounts Not Subject to Rules)

August 13, 2015

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

The Connecticut PURA issued a final decision which, among other things, addresses implementation of the requirement that suppliers list a residential customer's rate for the next month on bills (both utility consolidated and dual bills).

PURA referenced the following example time period in its decision: A customer’s meter is read on the last day of the month and as a result, the following billing and consumption periods apply:

• Consumption for the period April 1st to April 30th (Billing Period). Customer receives the bill on May 4th;
• Consumption for the period of May 1st to May 31st (Consumption Period 1). Customer receives the bill on June 4th;
• Consumption for the period of June 1st to June 30th (Consumption Period 2). Customer receives the bill on July 4th;
• Consumption for the period July 1st to July 31st (Consumption Period 3). Customer receives the bill on August 4th.

The Authority said that the Next Rate is intended to show residential customers the generation rate that will be assessed in an upcoming consumption period, not to inform the customer about a change in their generation rate after they begin incurring that rate for consumption in a billing period that is already underway. Conn. Gen. Stat. §16-245d(a)(2) intended that the Next Rate provide customers timely information to take action regarding the upcoming generation rate if necessary to avoid being billed at a higher than anticipated rate, PURA said.

"Therefore, the Authority concludes that Conn. Gen. Stat. §16-245d(a)(2) intended to show the customer the rate that will be assessed in an upcoming consumption period, not to inform the customer about a change in his generation rate after he begins incurring that rate in a consumption period that has already started. The Next Rate must appear on bills before those charges are incurred by the customer to allow the customer time to negotiate a lower rate or opt out of the upcoming rate," PURA said

"Based on the foregoing, the Authority finds that the Next Rate displayed on the Billing Period statement must reflect the rate that the customer will be assessed in Consumption Period 2, the month of June, a forward looking rate. The EDCs and suppliers must accommodate this requirement within the EDI process and begin providing the Next Rate effective January 1, 2016," PURA said.

PURA further ordered that suppliers may only change the rate charged to a customer from the Next Rate previously listed on the bill where a customer negotiates a lower rate.

"[O]nce the Next Rate has been identified customers must be allowed to negotiate a lower rate with their current supplier while comparing all other supply options. If the customer negotiates a change in rate with the current supplier that rate should be assessed as soon as possible, i.e., in Consumption Period 2. It would be unreasonable to require the customer to first pay for service at a higher rate and then accept a refund instead of simply billing for service at the adjusted/negotiated rate. In addition, allowing suppliers to modify the Next Rate will provide consistent enrollment and price change standards whether the customer is switching from supplier to supplier, supplier to standard offer, or product to product," PURA said.

"Thus, suppliers must be allowed to lower the Next Rate if a residential customer affirmatively elects a change and must timely process the change to assure the customer is properly billed during the Consumption Period 2. All current customer enrollment/confirmation standards, such as memorializing any change agreed to by the customer, apply. However ... if the Next Rate that was displayed was incorrect or did not conform with a rate that the customer affirmatively consented to receiving, suppliers must correct these situations directly with the customer and should not rely on the EDC billing system to fix these mistakes. The EDCs in turn must accommodate these standards within their systems," PURA said.

"Therefore, the Authority concludes that suppliers should be allowed to reduce the Next Rate after that rate has appeared in the Summary Information," PURA said.

"The Authority shares the concerns raised by the OCC and AG regarding potential abuses surrounding the Next Rate policy and encourages suppliers to establish strict standards and policies to avoid potential errors and customer complaints. For example, suppliers should adopt the practice of offering customers the best rate when posting the Next Rate as suggested by the OCC and AG and must assure accuracy when providing the Next Rate to the EDCs. Customers must be confident that the Next Rate is timely, accurate and credible. The Authority hereby notifies suppliers that it will not tolerate any abuse of this policy and will take immediate and decisive regulatory action against any supplier who violates the spirit and intent of the statutory provision and this decision," PURA said.

In cases where suppliers do not provide the required Next Rate or other required data to the utility, the bill will list "Not Provided" for that field, and include a reference and messaging for the customer to contact the supplier to obtain the information. "To reiterate, the Authority will not tolerate abuse of this policy, including failure to timely provide required information," PURA said.

"Suppliers must carefully manage their Next Rate data to assure that timely, accurate and credible information is being provided to consumers. Suppliers can lower the Next Rate where a customer affirmatively consents to a rate that is lower than the published Next Rate and properly secures and documents the customer’s consent. Suppliers cannot adjust the Next Rate to accommodate mistakes. In these situations it is incumbent upon the supplier to correct the error directly with the customer. Suppliers cannot simply rely on the EDC billing system to correct their own errors regarding the Next Rate," PURA said.

PURA's decision also found that the required summary information required on bills is directed at the general residential market and not "Incidental Residential Accounts" that happen to be comingled among a larger commercial facility. The Authority will exempt the billing statement associated with an Incidental Residential Account(s) from the Summary Information under Conn. Gen. Stat. §16-245d(a)(2).

As previously reported by EnergyChoiceMatters.com, an earlier draft order would have provided that utilities shall provide new summary information previously required for residential bills (rate, rate expiration date, rate change notice, etc.) for incidental residential accounts receiving a utility consolidated bill. Suppliers had raised concern that if these incidental residential accounts are classified as residential for purposes of including summary information on bills, a prior PURA decision prohibiting the offering of certain variable rates (specifically, anything but a variable-monthly rate which is a single rate each month, set in advance of the billing period) to residential customers would prohibit the offering of complex rates (block and index pricing, portfolio managed pricing, etc.) to business customers who happen to have incidental residential accounts.

PURA directed suppliers and the EDCs to collaborate and plan to identify Incidental Residential Account(s) and work through the EBT Working Group process to implement the standards necessary to implement this exemption with an eye toward minimizing additional administrative burdens on the EDCs.

Citing concerns raised by retail suppliers concerning misclassification of customer accounts by the EDCs, PURA said that it encourages electric suppliers to work with the EDCs to properly classify all customers based on the appropriate tariff.

For suppliers using dual billing for residential customers, PURA directed that the new summary information required to be on residential bills be displayed for dual bills rendered beginning January 1, 2016.

Docket 14-07-19RE01

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