Energy Choice
                            

Matters

Texas Retail Provider To Pay $160,000 Under Settlement With PUCT Staff Over Practice Of Placing Reinstated Disconnected Customers On Different Rate

Some Customers Saw Rate Increases of Almost 10¢/kWh From Practice

November 9, 2018

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

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

Ambit Texas, LLC would pay $160,000 under a settlement with Staff of the Public Utility Commission of Texas to resolve alleged violations of Public Utility Regulatory Act §§ 17.008 and 17.151, as well as 16 Texas Administrative Code (TAC) §§ 25.475 and 25.481 as a result of Ambit's prior practice of placing customers reinstated after a disconnection onto a variable rate plan known as the Ambit Standard Plan, rather than the customer's pre-disconnection plan.

As stated in the settlement agreement, "Beginning on April 3, 2008, Ambit employed a policy such that if a customer was disconnected for non-payment during the term of a fixed rate product or a variable rate product, and the customer reconnected service by paying the past due balance, Ambit would reinstate the customer with a variable rate plan known as the 'Ambit Standard Plan.' The policy prohibited the reinstated customer from enrolling in any other plan with the company for six months. If a customer experienced no additional disconnections during the six-month period, the customer could then enroll in another Ambit plan of the customer's choosing. Ambit asserts that, in practice, it generally allowed customers to immediately switch to a new product."

As stated in the settlement agreement, "Effective August 13, 2010, Ambit modified the policy so that customers would only be reinstated on the Ambit Standard Plan following a second disconnection for non-payment."

As stated in the settlement agreement, "Before including any charges on a customer's bill, Ambit must thoroughly inform the customer about the Ambit Standard Plan, including all associated charges, and obtain clear and explicit consent to obtaining the product or service under PURA § 17.151(a) and 16 TAC § 25.481(b). Ambit must also document the authorization in accordance with 16 TAC § 25.474, relating to Selection of Retail Electric Providers."

As stated in the settlement agreement, until Ambit ended such policy, its Terms of Service (TOS) disclosed the policy to customers.

As stated in the settlement agreement, the text used in the TOS to describe the policy was the same size as the text surrounding it, and it was not distinguished with capitalization, bolding, italics, or special headings.

As stated in the settlement agreement, Ambit also disclosed the existence of the policy in each disconnection notice sent to customers for non-payment.

As stated in the settlement agreement, "Ambit's EFL for the plans customers originally chose did not disclose the existence of the Ambit Standard Plan."

As stated in the settlement agreement, "The customer's only indication that they had been reinstated on the Ambit Standard Plan was when the plan name and price changed in their first subsequent bill after service resumed."

As stated in the settlement agreement, "Commission Staff contends that this practice was a violation of PURA § 17. 151(a) and 16 TAC § 25.481(b) because Ambit did not thoroughly inform the customer about the Ambit Standard Plan, nor did it obtain the customer's clear and explicit consent to be reinstated onto the Ambit Standard Plan."

Ambit contends that the notification provided in the TOS was sufficient to comply with applicable disclosure requirements.

As stated in the settlement agreement, "Under 16 TAC § 25.475(f)(8), Ambit is required to conspicuously contain within the TOS a statement describing the conditions under which the contract can change and the notice that shall be provided. Ambit described the conditions under which the contract can change, but the description was in plain text and not distinguished by size, capitalization, bolding, italics, or otherwise. Ambit's TOS is also required to be complete, meaning it must include all provisions required under the Commission's rules."

As stated in the settlement agreement, "Commission Staff contends that Ambit's practice of reinstating a customer onto the Ambit Standard Plan violated 16 TAC § 25.475(f)(8) because the TOS did not conspicuously contain a statement describing the conditions under which the contract can change and the notice that will be provided if there is a change. Further, because the lack of such a statement meant that the TOS was incomplete, Commission Staff contends that this practice violated 16 TAC § 25.475(c)(2)(A)."

Ambit contends that the notice was sufficient under the rule.

As stated in the settlement agreement, "Under PURA § 17.008(e) and 16 TAC§ 25.475(c)(2)(E), Ambit is prohibited from using a customer's credit history as the basis for determining the customer's price. PURA defines 'credit history' as, in part, 'payment habits.'"

As stated in the settlement agreement, "Commission Staff contends that reinstating customers exclusively on the Ambit Standard Plan after two disconnections for non-payment is using the customer's payment habits, and therefore, credit history, as the basis for determining the customer's price is in violation of PURA § 17.008(e) and 16 TAC § 25.475(c)(2)(E)."

Ambit contends that the customer's credit score and payment history were not used to establish the rates; rather, customers were reinstated on a different plan following disconnection as disclosed in their initial TOS and in the disconnection notice.

As stated in the settlement agreement, "Ambit is prohibited from changing the term of the contract without having the customer enter into a new contract under 16 TAC § 25.475(d). Ambit contends that the Ambit Standard Plan was a different electric product, distinct from the original plan the customer enrolled on."

As stated in the settlement agreement, "Commission Staff contends that Ambit changed the term of the contract by unilaterally terminating it, and then enrolling a customer onto a new plan without first entering into a new contract."

Ambit contends that customers were moved to a different electric product, at a different price, following disconnection consistent with the TOS.

As stated in the settlement agreement, "Under 16 TAC § 25.481(c), if Ambit charges a customer for any product or service without proper customer authorization, it is required to, within 45 days, discontinue the product or service, remove the unauthorized charge, and refund or credit the customer."

As stated in the settlement agreement, "Commission Staff contends that Ambit violated 16 TAC § 25.481(c) because it did not uniformly remove the charges for the Ambit Standard Plan or provide refunds or credits to all customers within 45 days."

Ambit contends that the services were authorized based on the customers agreement to the original retail contract TOS, which disclosed the policy of reinstating disconnected customers on the Ambit Standard Plan.

As stated in the settlement agreement, "According to information obtained by Commission Staff from Ambit, in the first six months of 2017, approximately 8,695 customers were moved by Ambit to its Standard Plan following disconnections. At the time Ambit provided this information to Commission Staff, the rate of the Ambit Standard Plan was $0.174 per kWh, and some customers experienced a rate increase of almost $0.10 per kWh when Ambit reinstated the customer on the Ambit Standard Plan. By June of 2017, a third of these customers had switched away from Ambit or been changed to a new product plan with Ambit."

Ambit has discontinued the policy of reinstating disconnected customers onto the Ambit Standard Plan and will not move any other customers onto that plan.

As stated in the settlement agreement, "Ambit voluntarily terminated the Ambit Standard Plan effective December 21, 2017. Since that time, no customers have been placed on the Ambit Standard Plan due to disconnection of service. Customers that were on the Ambit Standard Plan were given the option to move to a different plan. Those customers who did not choose another plan remained on the Ambit Standard Plan, because Ambit cannot change their plan without consent. For the customers remaining on the Ambit Standard Plan, Ambit reduced the rate to match the variable rate applicable to the majority of Ambit's variable rate customers. A total of 2003 customers remain on the Ambit Standard Plan as of September 25, 2018."

As stated in the settlement agreement, "This Agreement represents a compromise of claims and allegations, and the execution of this Agreement does not admit the truth or accuracy of any such disputed claims."

Docket 48859

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Director of Sales & Marketing -- Retail Supplier -- Houston
• NEW! -- Sales Director -- Houston
• NEW! -- Director of Sales
• NEW! -- Energy Sales Representative
• NEW! -- Manager Business Field Sales -- Retail Energy
• NEW! -- Senior Energy Consultant
• NEW! -- Supply Analyst -- Retail Supplier
• NEW! -- Controller -- Retail Supplier -- Houston
• NEW! -- Outside Sales Executive -- Retail Energy
• NEW! -- Channel Sales Manager -- Retail Supplier
• NEW! -- Sr Analyst, Supply and Pricing -- Retail Supplier -- Houston
• NEW! -- Customer Retention Analyst -- Retail Supplier -- Houston