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PUC Proposes To Require Advance Notice of Variable Rate Changes In Excess of 10%

Rules Appear To Prohibit "Variable" Pricing Products With Terms Longer Than One Month

November 29, 2016

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

The New Hampshire PUC is proposing to revise its retail electric supplier marketing rules to include new variable rate disclosures, including a requirement to notify customers in advance of a variable rate change exceeding 10%.

The draft rules provide that a competitive electric power supplier (CEPS) shall include the following on both its website and in its terms of service for a variable price offer to residential and small commercial (<20 kW) customers:

(1) A clear statement that the variable price being offered is based on market prices as shown or indicated by the ISO-NE locational marginal price for New Hampshire or some other identified price index, if applicable;

(2) If the variable price being offered is not based on market prices or some other price index as described in (1) above, a clear statement that the variable price being offered is not based on market prices as shown or indicated by the ISO-NE locational marginal price for New Hampshire or some other identified price index, if applicable;

(3) A description of the variable pricing structure including each applicable component used in determining the variable price and the frequency of variation;

(4) The monthly average price a customer would have paid the CEPS over the preceding 12 months using either the actual variable prices charged by the CEPS to customers during such period or the currently offered:

a. Variable pricing structure; and

b. The applicable price index for the past 24 months if any;

(5) A graphical display by month of the variable prices required in (3) above;

(6) The maximum and minimum monthly price, stated separately, that a similarly situated retail customer in New Hampshire would have paid over the preceding 12 month period;

(7) Any applicable price cap;

(8) Any applicable price floor; and

(9) The website address where the current publicly available price per kWh required by rule (noted below )is identified.

A CEPS charging a variable price or variable prices shall maintain a publicly available website where residential and small commercial customers may readily obtain the applicable variable price per kWh no less than 5 calendar days in advance of the effective date of the price, the proposed rules provide

"Residential and small commercial customers shall be notified 30 days prior to the effective date of any increase in a variable price projected to increase by 10 percent or more or one cent per kilowatt-hour, whichever is less, using the customer's preferred form of communication," the proposed rules provide. The customer may select U.S. mail or e-mail as their preferred method of communication

Such >10% variable rate change notice, "shall confirm that the actual variable price per kWh shall be available on the CEPS website no less than 5 days in advance of the effective date of the price increase," the draft rules provide

"Residential and small commercial customers shall be notified no less than 45 days and no more than 60 days prior to the effective date of any change in the terms or structure of a variable price using the customer's preferred form of communication," the draft rules provide

Additionally, "No variable price contract with a CEPS shall bind a residential or small commercial customer for a period longer than a one-month billing cycle," the draft rules provide

Notably, the draft rules do not define, "variable price contract," and whether the term encompasses plans with sophisticated pricing that does not fit neatly into a fixed rate category (which is also not defined).

Furthermore, it is not clear what the prohibition of "binding" a customer to a variable rate contract longer than a one-month billing cycle means. Is the provision meant only to prohibit early termination fees for variable rate contract, or does it more broadly prohibit any variable rate contract with a term exceeding a one-month billing cycle, even where there is no early termination fee, because such longer-term contracts do "bind" the customers to their terms even where there is no penalty for early termination.

See Related Stories Today on Proposed Rules:

U.S. State To Ban Door-to-Door Electricity Sales ; Restrictions on Telemarketing Also Proposed

Proposed PUC Rules Would Require Disclosure To Customer of Whether Aggregator Is Compensated By Retail Supplier

Mandatory Public Price Posting, Longer Rescission Period, Contract Cancellation Via Supplier Website Among Changes Under PUC's Proposed Supplier Rules

Docket DRM 16-853

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