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PSC Staff Propose Requiring Suppliers To Provide "Written" Information Regarding Rate Changes

September 2, 2015

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

Noting a shift in responsibility regarding proposed rate change notice requirements, the Maryland PSC Office of Staff Counsel has recommended that if suppliers are only required to make rate change information available to customers in advance (as opposed to requiring affirmative consent for any rate change), such rate change information should be required to be in "written" format.

Staff was commenting on the latest draft from the PSC Team Leader concerning changes to the electric and gas marketing regulations under PC 35.

As first reported by EnergyChoiceMatters.com, the latest Team Leader draft eliminated the earlier proposal that would have required affirmative consent for any rate change. Instead, the Team Leader draft would require suppliers to make rate change information available to customers in advance, with directions on how to access such information.

Specifically, when a customer's rate changes, the Team Leader draft would require a supplier to make available to a customer his or her rate for the next billing period as follows:

(1) The rate shall be made available at least twelve days prior to close of the customer’s billing period;

(2) The rate shall be made available in a clear, easy to access format prescribed by the supplier;

(3) The supplier shall give the customer directions on how to access the rate at various times (at enrollment, at the time of other required notices, upon request, or when the method changes).

Of this new method of providing rate change information, Staff said, "it appears that the burden of notice has been shifted from the Supplier to the customer," further noting that, "the Supplier is not obligated to take any affirmative action to inform the customer that there will be a change and what that change will be."

While Staff did not propose requiring the supplier to affirmatively send a rate notice to customers, Staff said that the Team Leader's proposed mechanism should require the supplier to provide the rate change information in "written format."

Specifically, Staff proposed that the new rate, "shall be made available in a clear, easy to access, written format prescribed by the supplier."

Staff said that suppliers should not be permitted to comply with the rate change information requirement through a telephonic system, "because it provides the customer with no indication of the rate to be expected that can be confidently revisited at the time of billing."

It was unclear if Staff's use of the term "written" would preclude an internet-based system to comply with the rate change information requirement. Given Staff's concern that the customer be able to have the advance notice rate change information available to later compare to the rate actually billed by the supplier, Staff, at a minimum, may oppose any internet method which does not record a history of past rate change notices that can be revisited as a retained paper notice can be.

The Team Leader draft would also allow a supplier to provide an estimated rate in the rate change information, provided that the final rate does not exceed the estimate While not opposing the use of an estimate, Staff said that an estimated rate, "should be the exception rather than usual practice," and proposed language stating that estimates may only be used, "[i]n unusual circumstances."

The Office of People's Counsel continues to recommend that the Commission require suppliers to obtain affirmative consent from the customer prior to any change in the material terms and conditions of a contract, which OPC said would also apply to any change to a price term, including a change from a fixed rate to a variable rate

"For any contract with a variable rate price term, the supplier shall provide advance written notice to the customer of the actual variable rate that will be in effect during the following billing cycle 30 days before the start of the billing cycle," OPC proposed

"For a month to month contract, before any changes to the terms and conditions can occur, a supplier shall provide a customer with a written notice of the pending changes to the terms of the contract 30 days before the automatic renewal is scheduled to occur," OPC proposed

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