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State Seeks Briefs on Treatment of Fixed Price Customers Once Fixed Term Expires, In Light of Variable Rate Ban

August 20, 2015

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

The Connecticut Public Utilities Regulatory Authority sought briefs regarding Public Act 15-90, which banned variable rates for residential customers, but which directed PURA to develop recommendations for appropriate rate treatment for customers whose fixed prices expire.

Section 1 of the Act amended Connecticut General Statutes (Conn. Gen. Stat.) § 16-245o as follows: "On and after October 1, 2015, no electric supplier shall (A) enter into a contract to charge a residential customer a variable rate for electric generation services; or (B) automatically renew or cause to be automatically renewed a contract with a residential customer and, pursuant to such contract, charge such customer a variable rate for electric generation services."

Section 2 of the Act further amended Conn. Gen. Stat. § 16-245o and directs the Authority to, "develop recommendations and guidance regarding (1) what type of generation services rate structure is best suited for residential customers who allow a fixed contract with an electric supplier to expire and begin paying a month-to-month rate for generation services from such supplier; and (2) what change to the generation services rate and to the terms and conditions of such service that customers may experience after the expiration of a fixed contract when such customers begin paying a month-to-month rate."

The Authority requested briefing on how to manage the transition of a residential fixed contract signed after October 1, 2015. The Authority requested that participants discuss in briefs the following hypothetical scenario:

• A residential customer enters a fixed contract on October 2, 2015, for four billing cycles at the rate of 8.0 cents/kWh. The customer begins service with the licensed supplier on a meter read date of October 15, 2015, thus the initial fixed rate term expires on/about February 15, 2016.

• By operation of the Act, if a variable rate cannot be charged after the four billing cycle term expires, what options are available to the licensed supplier to retain this customer at the end of the fixed rate term?

• If affirmative customer consent for a new, subsequent fixed term contract cannot be obtained, must the customer be returned to electric distribution company (EDC) standard service? Separately comment on whether suppliers can drop customers to standard service under such circumstances.

• Alternatively, if affirmative customer consent for a new, subsequent fixed term contract cannot be obtained, is retaining the customer at the same (8.0 cents/kWh) rate on subsequent bill cycles a permissible, viable option, until either party chooses to end service?

Docket 15-06-15

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