Energy Choice
                            

Matters

Retail Supplier Files New Complaint Against POR Clawback Tariff, Alleges Offset To Receivables Not Authorized Under Tariff

November 17, 2016

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

Respond Power LLC has filed a new complaint at the Pennsylvania PUC against the application of the newly implemented purchase of receivables clawback tariffs at Penelec and West Penn Power.

Click here for background on the POR clawback

In addition to citing arguments in a prior emergency petition to prevent the EDCs from withholding nearly $500,000 as an offset against a clawback charge which Respond is disputing, Respond in the new complaint alleges that such offset is not authorized by the tariffs governing the clawback, and that the EDCs are required to engage in dispute resolution.

"[T]he self-help remedies threatened by Penelec and West Penn of withholding nearly one-half million dollars in POR payments -- for electric generation services already provided to customers -- to offset the Clawback Charge that they have assessed against Respond Power are not authorized by the Supplier Tariffs," Respond Power alleged.

"Although undisputed balances are subject to late payment fees, billing disputes are to be dealt with promptly in accordance with the dispute resolution procedures contained in the Supplier Tariffs. Here, despite Respond Power's challenges to the application of the Clawback Charge, Penelec and West Penn have refused to discuss the Clawback Charge, provide requested supporting calculations or extend the payment date to permit utilization of the dispute resolution procedures," Respond Power alleged.

Respond Power requested that the PUC extend the emergency relief concerning the clawback charge granted on October 27, 2016 and stay the application of the clawback charge during the pendency of the complaint

Respond Power said that the language in West Penn Power's tariff states that the EDC, "has the right to withhold from the Purchases of Receivables ('POR') payment an amount equal to any undisputed outstanding an unpaid balance in excess of thirty (30) or more days associated with EGS obligations to the Company as provided for in Section 12.7," [emphasis by Respond Power]

Respond Power said Penelec's tariff does not authorize Penelec to withhold the clawback charge from the POR payments, and that tariff language related to the clawback instead clarifies that the POR program is no longer without recourse, which the prior tariff provided

Respond Power said that the original proposal for the POR clawback was "buried" in a November 3, 2015 proposal for default service for the period starting June 1, 2017 filed by the FirstEnergy EDCs.

[We'd note that, though buried, readers of EnergyChoiceMatters.com would have been alerted to the proposed clawback charge on November 4, 2015, one day after its formal proposal, thanks to our exclusive story on the proposed POR clawback, which is why EnergyChoiceMatters.com is the only daily must-read publication for retail energy.]

In any case, regardless of whether the default service filing could be used as proper notice to EGSs of a change in the existing POR program, and even if implementation prior to the new default service program date of June 1, 2017 were appropriate, the 12-month backward-looking nature of the clawback subjects EGSs to unjust and unreasonable charges, Respond Power said, because, the clawback is applicable to two months (September and October 2015) prior to any notice of the clawback, as EGS service in such months occurred before the FirstEnergy EDCs even proposed the clawback.

"When the 2017-2019 Default Service Program was filed on November 3, 2015, more than two months of data upon which the proposed Clawback Charge would be based had already accrued. While the 2017-2019 Default Service Program was being litigated, more than six months of additional data upon which the proposed Clawback Charge would be based continued to accrue," Respond Power noted

"By the time the Commission approved the Clawback Charge on May 19, 2016, nearly nine months of data had accrued that would later be used to calculate Respond Power's September 2016 invoice. As a result, three-quarters of the September 2016 Clawback Charge assessed against Respond Power was based on data that was accumulated before the Commission even approved the charge," Respond Power noted

"Moreover, the Commission's approval of the modification of the POR program that is currently in effect required that all affected parties be given notice and an opportunity to be heard under Section 703(g) of the Public Utility Code, 66 Pa. C.S. § 703(g). When the modification was approved, the EDCs were still operating under the DSP for the period beginning June 1, 2015 and ending May 31, 2017. Under the 2015-2017 Default Service Program in effect during that time, EGSs were not subject to a Clawback Charge in connection with POR. Before deciding whether to modify the 2015-2017 Default Service Program, it was incumbent upon the Commission to adopt such proposal as a tentative order, affording affected parties notice and an opportunity to be heard. The failure of the Commission to do so has resulted in Respond Power being denied the due process rights to which it is entitled under Code Section 703(g)," Respond Power alleged

"Further, the Clawback Charge was not included in the EDCs' Supplier Tariffs until October 28, 2016, with an effective date of August 1, 2016. Even if it is appropriate to make a tariff effective nearly three months before filing, the tariff was not in effect for eleven of the twelve months upon which the Clawback Charge assessed against Respond Power in September 2016 was based," Respond Power alleged

Respond Power's complaint challenges the retroactive application of the clawback charge contained in the supplier tariffs for the period of August 31, 2015 through August 31, 2016 and also for all months during the period of August 31, 2016 through August 31, 2017 in which Respond Power does not receive notifications from Penelec and West Penn regarding the factors upon which the charge is based, including write-off amounts and the identification of non-paying Respond Power customers.

"[A]bsent access to the information upon which the Clawback Charge was based while it was accruing, Respond Power had no opportunity to avoid or minimize the Clawback Charge. As a matter of basic equity, it is critical that Respond Power receive this information from the EDCs before any Clawback Charge is applied so that it can make business decisions to manage the impact of the charge, including whether to return non-paying customers to default service," Respond Power said

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Indirect Sales Channel Manager -- Retail Supplier
• NEW! -- Gas Scheduler -- Retail Supplier
• NEW! -- Sales Operations Analyst -- Retail Provider
• NEW! -- Project Manager -- Retail Supplier
• NEW! -- RECs Trader -- Retail Supplier
• NEW! -- Gas Trader -- Retail Provider
• NEW! -- Sr. Utilities Analyst -- Retail Supplier
• NEW! -- Manager, Mass Marketing Operations -- Retail Supplier -- Houston
• NEW! -- Manager of Strategic Financial Planning & Analysis -- Retail Provider -- Houston
• NEW! -- Manager/Director Telemarketing -- Retail Supplier -- Houston
• NEW! -- Senior EDI Analyst
• NEW! -- Indirect Sales Manager -- Retail Supplier -- Houston
• NEW! -- Digital Marketing Analyst -- Retail Supplier -- Houston
• NEW! -- Gas Scheduler II -- Retail Supplier -- Houston
• NEW! -- Credit Manager -- Retail Supplier -- Houston
• NEW! -- Senior Financial Analyst -- Retail Provider -- Houston
• NEW! -- Senior Financial Reporting Analyst -- Retail Supplier -- Houston
• NEW! -- Senior Internal Auditor -- Retail Supplier -- Houston