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Complaint Alleges Another Retail Supplier Is Newly Passing-Through Changed ISO Capacity Costs Under Fixed Rate Contract

November 29, 2018

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

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A non-residential customer complaint received by the Connecticut PURA alleges that Spark Energy, L.P. has informed the complainant, who is on a fixed rate contract, that Spark will be passing-through certain changes in ISO New England capacity costs

In a letter to Spark concerning the complaint, PURA stated that the non-residential customer alleges that the customer had entered into a 24-month fixed rate contract with Spark Energy L.P. that commenced in December 2017 at a rate of $0.0689/kWh.

In a letter to Spark concerning the complaint, PURA stated that the non-residential customer alleges that Spark notified the customer, via correspondence dated August 13, 2018, that, pursuant to Section 4 of the contract, the customer's rate would increase to $0.0708/kWh within 30 days of the notification, i.e., on or before September 12, 2018.

In a letter to Spark concerning the complaint, PURA stated that the non-residential customer alleges that Spark stated in such correspondence the following: "We are writing to inform you of a change to your account in accordance with your Master Electricity Agreement. ISO-New England dictates the amount of capacity (the resources required to meet the future demand for electricity) a supplier is required to purchase in order to serve its customers. The interpretation of how those costs are calculated has changed resulting in an increase in those costs under section 4 of your contract. As a result, the new rate on your contact will be as shown below for the remainder of each contracted term."

In a letter to Spark concerning the complaint, PURA stated, "The Authority notes that the Sales Confirmation provided with the contract identifies 'Capacity (non-ERCOT)' costs among the charges that are included in the contract’s fixed price."

In a letter to Spark concerning the complaint, PURA further stated that the non-residential customer alleges that, through a letter dated October 1, 2018, Spark notified the customer that its contract for generation supply would be transferred to Verde Energy effective on approximately November 20, 2018, with such notification stating, "Your current rate with Spark Energy is $0.0689/kWh and this plan expires on 12/12/19. You have 30 days from the date of this notice to cancel your service without an early termination fee. After this initial 30-day grace period the early termination fee as outlined in your original Spark Energy contract will apply should you choose to cancel. You may opt-out of the assignment by calling Spark Energy at [number]. If you have a fixed rate plan with Spark Energy, your service will continue with the same fixed rate and terms until the end of your contract or upon cancellation of service. You may also contact Verde Energy directly to see what other options are available to you, including new options with Verde Energy when your contract expires."

PURA directed Spark to respond to several questions, including the following:

• "Referring to the August 13, 2018 letter, explain the basis for increasing the rate under this fixed price contract, specifically indicating how a change in the interpretation of how costs are calculated qualifies as a change in law under Section 4 of the contract. Did Spark notify other customers served under a fixed rate contract that their rate would increase for the same reason?"

• "Referring to the October 1, 2018 Transfer Notification, the correspondence states that the customer’s current rate with Spark is $0.0689/kWh and that the plan expires on December 12, 2019. The letter does not mention the rate increase identified in the August 13, 2018 letter, which increase would have become effective on or before September 12, 2018. As a result, the letter does not reflect the correct rate the customer would pay after the transfer to Verde. Has Spark reissued this letter to correct this error? "

Spark Energy provided the following statement to EnergyChoiceMatters.com concerning this matter: "Spark received an informal regulatory inquiry regarding commercial contract terms between Spark and a commercial customer today. While Spark does not discuss its contractual relationships with the press, we look forward to resolving any outstanding customer and regulatory concerns."

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