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Texas PUC Staff Draft Proposal For Adoption Would Require That REPs Offer Ability To Pay Deposits >$50 In Two Installments To All Residential Customers

April 6, 2018

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

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Staff of the Public Utility Commission of Texas have filed a draft recommended proposal for adoption which, as part of removing certain low-income customer benefits from the Substantive Rules due to elimination of the System Benefit Fund, would require that retail electric providers extend to all residential customers the ability to pay deposits in excess of $50 in two equal installments

Staff's recommended proposal for adoption provides that, "A customer or applicant shall be eligible to pay any deposit that exceeds $50 in two equal installments."

Under the current rules, this deposit benefit is only extended to low-income customers eligible for the defunct Lite-Up program.

In a draft preamble, Staff says of the recommended decision to extend the deposit installment protection to all residential customers the following: "With respect to the arguments raised by ARM that the split deposit provision would be inconsistent with PURA §17.007(c), the commission notes that the REPs have not provided any evidence of any direct costs incurred by the proposed rule that would require reimbursement in contravention of the statute; it is unclear that there would be any cost as a result of the commission adopting the proposed rule. The split deposit provision as applied to all residential customers would still permit REPs to collect the deposit. Furthermore, the commission has the authority, as noted by OPUC and TCAP, to enforce minimum service standards relating to deposits, as provided for in PURA §39.101(c), and to ensure that customers have access to safe, reliable, and reasonably priced electricity as provided in PURA §39.101(a)(1). With respect to the arguments raised by ARM that the commission previously declined to adopt a split deposit provision for all customers on the basis that it would have negative financial consequences for REPs, the commission notes that such adoption was on the rationale that sufficient alternatives exist that were “more tailored.” Given the expiration of the statutory provisions mandating the provisions by which a low-income customer could be automatically identified, the commission does not have a sufficient alternative to identify these low-income customers and ensure their access to safe, reliable, and reasonably priced electricity. The commission notes that requiring the split deposit provision for all customers will assist in minimizing the administrative burden on REPs, as Texas ROSE/TLSC note. In addition, the commission still permits the REPs to collect a deposit, which should assist to minimize the economic burden on REPs. The commission adopts the language as proposed."

Staff recommends declining extending other customer benefits previously applicable to Lite-Up customers to all residential customers -- such as late fee waivers, required offering of level and average payment plans, and deferred payment plans

The Staff proposal for adoption deletes current language requiring late fee waivers and the offering of level and average payment plans and deferred payment plans to Lite-Up customers, given the termination of the Lite-Up program.

Staff's proposal for adoption includes revised language, versus the proposal for publication, to clarify the allocation of letter of credit proceeds during a mass transition; however, the language still appears to result in disparate treatment of customers on the new Low Income List Administrator (LILA) list based on whether the customer's assigned POLR has voluntarily elected to receive the LILA list (for a cost).

Notably, the draft rules in Staff's proposal for adoption continue to state in the POLR rules that, "At the time of a mass transition, the Executive Director or staff designated by the Executive Director shall distribute available proceeds from an irrevocable stand-by letter of credit in accordance with the priorities established in §25.107(f)(6) of this title. For a REP that has obtained a current list from the Low Income List Administrator (LILA) that identifies low-income customers, these funds shall first be used to provide deposit payment assistance for that REP’s transitioned low-income customers." [emphasis added]

Elsewhere, under revised text discussing the letter of credit proceed waterfall under the REP certification rules, the draft proposal for adoption provides that proceeds from an irrevocable stand-by letter of credit provided under this subsection may be used to satisfy the following obligations of the REP, in the following order of priority:

(i) first, if available, to assist in the payment of the deposits to retail electric providers that volunteer to provide service in a mass transition event under §25.43 of this title (relating to Provider of Last Resort (POLR)) of low-income customers as identified by the Low-Income List Administrator pursuant to §25.45 of this title;

(ii) second, if available, to assist in the payment of deposits to retail electric providers that are designated to provide service in a mass transition event under §25.43 of this title of low-income customers as identified by the Low-Income List Administrator pursuant to §25.45 of this title;

(iii) third, for customer deposits and residential advance payments of customers ...

While the language under (i) and (ii) here is broader, and says that deposits shall first be used for low-income customers as identified by the Low-Income List Administrator, with no explicit mention that the POLR must have obtained a list of these customers, we still read the proposed POLR rule revisions quoted above as only providing first priority proceeds to a POLR that has obtained the LILA list (and creating a requirement for the POLR to use these proceeds for its LILA list POLR customers), and that if a POLR has not elected to obtain the LILA list, then its low income LILA customers would not receive higher priority than other customers in deposit assistance from the letter of credit waterfall payment during a mass transition.

Staff's proposal for adoption maintains a proposed requirement that REPs inform customers of voluntary discounts offered by the REPs to qualified low-income customers; however, the draft proposal for adoption revises the language such that the specific discounts need not be listed on the YRAC document, and instead, a REP may comply with this requirement by providing the customer with instructions, listed on the YRAC, for how to inquire about such discounts.

The draft proposal for adoption does not include any new reporting requirements for REPs receiving the LILA list, or those not receiving the list, concerning their voluntary low-income assistance programs, aside from an obligation for the REP, in an annual report, to state whether it has obtained the LILA list or intends to obtain it.

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