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State Adopts Separate "Written" Notice for Variable Rate Increases Greater Than 20%, Additional Disclosures

Retail Suppliers Must Provide Customers With High Price Alerts For Certain Products, At Customer-Selected Levels

Advanced Posting Of All Variable Rates Required

June 2, 2017

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Copyright 2010-17
Reporting by Paul Ring •

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

The second notice order will be submitted to the Secretary of State to begin the second notice period.

Notably, the second notice order retains a proposal from a first notice order that requires 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" is defined as meaning, "the charge for electric power and energy service changes at any time during the term of the contract, but does not change more than once per month."

"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 second notice order states

"Written" is defined as meaning a hard copy, and the rules provide that an electronic copy satisfies the requirement for "written" notice so long as both RES and customer have agreed to electronic communication.

The written notice requirement (as well as the required posting of variable rates in advance described below) does 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, and the rule establishes various requirements for the disclosures of such formulas and inputs such that the customer must be able to calculate the upcoming rate from such disclosures

Under the second notice order, 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 and time-of-use rates for its residential customers applicable for that billing cycle. 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 and time-of-use rate customers who request it through the RES's toll-free number.

Per the second notice order, if the RES uses the utility's single bill to bill its residential variable or time-of-use rate customers, the RES shall use the allotted space on the bill to disclose the customer's variable or time-of-use rate that is in effect at the time the bill is received by the customer and the percentage change, if any, of the variable or time-of-use 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 or time-of-use rate customer receives consecutive monthly bills that fail to disclose upcoming variable or time-of-use rates in the bill's message section. If the RES bills its residential variable or time-of-use rate customers directly, the RES shall ensure that those customers' bills always contain the required variable or time-of-use rate information. 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 or time-of-use rate information can be obtained by the customer. The requirements 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.

Per the second notice order, a RES that currently enrolls residential customers on a variable or time-of-use rate for three consecutive months in any electric utility's service territory must, for a variable or time-of-use 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. A RES shall not rename a product in order to avoid disclosure of price history.

As noted in the above language, the second notice order extends certain rate disclosure requirements to time-of-use rates as well as variable rates. "Time-of-use rate" is defined as meaning, "the charge for electric power and energy service changes more than once per month."

To the extent the RES provides a formula for the customer to calculate the time-of-use rate (and avoid otherwise required notices and postings), the second notice order requires that, "for time-of-use rates, high price notifications shall be given when the rate meets or exceeds a level set by the customer; notice shall be given as soon as practicable by telephone, email, or text message, as authorized by the customer."

Furthermore, for a time-of-use rate in which the specific prices per kWh for the duration of the contract are not specified in the contract, a written notice is required if a change in the time-of-use rate structure leads to a 20% or greater increase in an estimated bill for the customer’s next billing cycle based on a reasonable proxy of that customer’s usage patterns for the upcoming billing cycle without any modifications to the customer’s consumption patterns.

The second notice order requires written notice for a change to a fixed to variable rate.

Specifically, "If a contract includes a provision that results in a change to the residential customer's rate plan, the RES shall send a separate written notice of the upcoming change at least 30 days, but no more than 60 days, prior to the switch. "

The provisions described above would only apply to residential customers

Docket 15-0512

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