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PUC Adopts Requirement For Advance Notice of Variable Rate Changes, Modifies Notice Threshold From Original 10%

Suppliers Must Tell Variable Rate Customers That "Price" Will Not Be Known Until Bill Issued, But Suppliers Required To Post Online All Variable Rates 5 Days Before Effective

Variable Rate Plans May Not "Bind" Customer For Longer Than One Month

July 21, 2017

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

The New Hampshire PUC has adopted final revisions, for legislative review, concerning retail electric marketing rules which include new variable rate disclosures, including a requirement to notify customers in advance of a variable rate change exceeding a specific threshold

The final rules provide that a supplier 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

Additionally, under an original proposal from 2016, the PUC had proposed that residential and small commercial customers were to 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

The final rules maintain a requirement for a specific customer notice of certain variable rate increases, but adopted a threshold of 25% for such notices

"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 25 percent or more per kilowatt-hour, using the customer's preferred form of communication," the final rules provide. The customer may select U.S. mail or e-mail as their preferred method of communication

Such 25% increase notice shall confirm that the actual variable price per kWh shall be available on the retail supplier's website no less than 5 days in advance of the effective date of the price increase, the final 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 final rules also provide required disclosures concerning variable rate plans 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. The final requirements differ from the earlier proposal by dropping a requirement for a supplier to list a 12-month historic average rate for the variable product, and instead requiring that the supplier tell the customer the price will not be known until the bill is issued

Specifically, a supplier 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 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 or some other identified price index;

(3) A general description of the components used in determining the variable price and the frequency of variation;

(4) A statement that the customer will not know what price the customer will pay for electricity used until the bill is issued;

(5) A statement that it may take one or more billing cycles for a price variation to become effective;

(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 is identified.

Note that the supplier is required to state that the customer will not know what "price" the customer will pay for electricity used until the bill is issued (rather than the "cost", which would not be known until the bill is issued as the cost requires usage information to calculate), yet the supplier is required to post online the effective variable rate 5 days in advance as noted above.

"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 or impose a fee for termination of the contract by a residential or small commercial customer," the final rules provide

Docket DRM 16-853

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