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State Moves Closer To Adopting Separate "Written" Notice for Variable Rate Increases Greater Than 20%, Additional Disclosures

March 27, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

An Illinois ALJ has issued a proposed second notice order to adopt a host of new retail electric marketing rules, including new rules requiring the advance posting of variable rates, including a separate notice for rate increases above a set threshold.

The draft second notice order retains a proposal from a first notice order that would require retail electric suppliers (RES) to notify customers, via a separate notice, of an increase in a variable rate that is in excess of 20%.

"Variable rate" would be defined as, "the charge for electric power and energy service changes at any time during the term of the contract."

The proposed second notice order would provide that, "At least 30 days prior to the start of a billing cycle, each RES shall make available on its website, or through the customer's account login, the variable rates for its residential customers applicable for the billing cycle starting during the following calendar month. The RES must disclose the one-month period to which the rates will apply. In addition, each RES shall provide the rate information to its variable rate customers who request it through the RES's toll-free number. The customer's contract shall contain the website address and toll-free phone number for the customer to obtain variable rate information in accordance with this Section."

The proposed second notice order would further provide that, "If the RES uses the utility's single bill pursuant to Section 16-118(d) of the Act to bill its residential variable rate customers, the RES shall use the allotted space on the bill to disclose the customer's variable rate that is in effect at the time the bill is received by the customer and the percentage change, if any, of the variable rate from one monthly billing period to the next. When there is insufficient available allotted space on the bill for the RES to make these disclosures each month, the RES shall ensure that no residential variable rate customer receives consecutive monthly bills that fail to disclose upcoming variable rates in the bill's message section. If the RES bills its residential variable rate customers directly, the RES shall ensure that those customers' bills always contain the variable rate information described in this Section. If the electric utility's implementation of Section 16-118(d) prevents an RES from complying with this Section, the RES shall be required to include a bill message that contains the toll-free phone number and/or website address where the variable rate information can be obtained by the customer. The requirements of this subsection to provide notifications in customer bills do not apply if the RES sends the notifications required by this subsection via a written communication sent at the same time as the customer's monthly bill."

Most notably, the proposed second notice order would further provide that, "If a residential variable rate customer's rate increases by more than 20% from one monthly billing period to the next, the RES shall send a separate written notice to the customer, informing the customer of the upcoming rate change."

The proposed second notice order would define "Written" as meaning a hard copy. Under the proposed second notice order, for any information required to be "written," an electronic copy satisfies that requirement so long as both RES and customer have agreed to electronic communication.

In a modification under the proposed second notice order, the provisions described above, "shall not apply to contracts which disclose the formula that will allow a customer to determine the variable rate based on a publicly available index or benchmark."

However, in such case, "The RES shall provide sufficient information on its website to identify the inputs to the formula used to calculate the variable rate, including the timing and location of the index or benchmark price, if any, and any other information necessary to calculate the rate."

Additionally, the proposed second notice order clarifies that the requirement for the RES to identify inputs to the variable rate calculation only applies if the RES is seeking to rely on such formula to avoid the otherwise required variable rate change disclosures.

Under the proposed second notice order an RES that currently enrolls residential customers on a variable rate for three consecutive months in any electric utility's service territory must, for a variable price product, disclose on the RES's website and through a toll-free number the one-year price history, or history for the life of the product if it has been offered less than one year. An RES shall not rename a product in order to avoid disclosure of price history.

In newly proposed language under the draft second notice order, to address concerns about time of use rates, the section containing all of the variable rate provisions described above, "does not apply to customers on RES service where the rate for electric service changes, or has the potential to change, more frequently than once a month."

The provisions described above would only apply to residential and small commercial customers (under 15,000 kWh annually)

Docket 15-0512

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