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Utility Opposes Collection of Deposits On Behalf Of Retail Suppliers

October 17, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Emera Maine opposed requiring the T&D utilities to collect deposits from customers on behalf of competitive electricity providers (CEP).

Emera Maine's comments came in a Maine PUC proceeding evaluating deposit allocation procedures with respect to retail supply service (click here for background)

Emera Maine does not collect a deposit for the supply portion of the bill from applicants or customers who receive supply service from a CEP at the time the deposit is quoted. For customers on the Standard Offer, the Emera Maine deposit amount does include supply service.

Emera Maine said, "Utilities should not be required to collect a deposit on behalf of a CEP. The additional collection responsibility would increase the administrative burden on utilities."

The Office of Public Advocate opposed collection of a separate CEP-requested deposit, but would permit any deposit collected for the Standard Offer to be used to pay CEP charges if a customer later takes CEP service.

OPA said, "We agree with the Commission’s prior conclusion that customers should pay a deposit for both the T&D and supply portions of their bill but do not support requiring utilities to collect a deposit if requested to by a CEP ... The CEP market in Maine has seen robust development without such deposits, and absent evidence of need we are reluctant to support this additional requirement."

However, OPA did recommend that, "If a customer does not switch to the standard offer but requires use of the funds from its deposit (e.g. disconnection or closure), the supply portion of the customer’s deposit should first be made available to pay any supply-related customer charges, including any amounts owed to a CEP."

Central Maine Power currently collects deposits related to supply, regardless of whether the customer is on the Standard Offer or CEP supply. The supply portion of the deposit is based on the standard offer rate that is applicable at the time the deposit is collected. CMP said that its current practice should continue

Electricity Maine, LLC said that utilities billing a customer on behalf of a CEP should be required to collect a deposit for the CEP if requested to do so.

"The deposit amount should be calculated based on the average supply bill or by a similar method that the T&D Utility currently uses to calculate customer deposits. Second, deposits that the T&D Utility collects should not be separated between supply, whether SO or CEP service, and T&D service, but rather be a unified deposit amount for both the supply and T&D Utility portion. Electricity Maine believes that requiring multiple deposits would likely create substantial confusion among customers and carry an administrative burden, with little, if any, resulting benefit to the T&D Utility, SO Provider, or CEP. Accordingly, when a customer is disconnected or closes an account, that single deposit should be allocated in proportion to the total unpaid bill, with no preference given to T&D charges or SO charges over CEP charges of a similar age," Electricity Maine, LLC said

Electricity Maine also reiterated comments made in previous proceedings in which Electricity Maine sought to eliminate the Standard Offer uncollectible adder, which it said unfairly provides Standard Offer a measure of certainty with respect to bad debt, which retail suppliers do not enjoy. Electricity Maine also said that partial payments should be allocated proportionally on a customer’s bill, rather than favoring payments to T&D Utilities and SO Providers, and said that any payment plans arranged by the T&D Utility should include the amount due to the CEP.

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