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Pa. PUC Proposes Requiring Use Of Rate Ready Billing, %-Off-PTC Product For CAP Shopping Program At FirstEnergy EDCs

PUC Proposes Changes To Customer Referral Program Scripts

December 20, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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The Pennsylvania PUC has issued a tentative order addressing various terms of the Customer Assistance Plan (CAP) shopping program at the FirstEnergy EDCs which, effective June 1, 2019, shall be the only means for a CAP customer to take service from a competitive retail supplier

As previously reported, under the CAP program at the FirstEnergy EDCs, the supplier rate must always be at or under the applicable Price to Compare (PTC), which changes each quarter, for the duration of the contract

To implement this provision, the PUC tentatively finds that, "a rate-ready, percentage off the PTC product is the simplest CAP shopping solution and the easiest for FirstEnergy to monitor that meets our requirement in the November Order that CAP customers may only enter into a contract with an EGS for a rate that is at or below each FirstEnergy Company’s PTC for the duration of the contract."

"Accordingly, we propose requiring EGSs seeking to serve customers participating the FirstEnergy’s CAP must use rate-ready billing and provide a percentage off the PTC product," the PUC said

The PUC would also rule that suppliers must use utility consolidated billing (rate ready) for CAP customers, and may not issue their own bill (dual bill or otherwise)

"It would be impossible for FirstEnergy to monitor the customer’s supplier price if the customer is billed separately by the supplier. Accordingly, the Commission proposes prohibiting dual/separate bills for CAP customers. CAP customers should be billed, through rate-ready billing, by the utility via utility-consolidated billing and should be included in the Purchase of Receivables (POR) program," the PUC said

The PUC proposed that FirstEnergy complete rate-ready EDI testing within 30 days during the three months before and the three months after it implements the CAP shopping program on June 1, 2019

The PUC's tentative order also addressed the labeling of the CAP product, as concerns were raised over labeling it variable or fixed.

"We propose that a supplier should simply identify the product as something like a 'CAP Program Product' without labelling it as fixed or variable. This proposed new label would be used to identify for customers that this product is targeted for CAP customers and complies with all the applicable CAP shopping rules in that it will always be at or below the PTC, with no early termination fees (ETFs), etc," the PUC said

"Suppliers would of course be obligated to fully disclose and explain that the customer’s price is pegged to the utility PTC, in that the price will increase and decrease with the PTC at a fixed discount percentage, if any. And while we propose not calling this a variable product, we propose that many of the disclosure rules relative to variable pricing should apply to this product. This includes telling the customer what the starting price is, how often it could change (quarterly) and how the customer can find their current price. However, since this is a new product, the requirement at 52 Pa. Code § 54.5(c)(14)(i) and (ii) to provide a 24-month price history would not be applicable – at least for the first 24 months of the program. The requirement at 52 Pa. Code § 54.10(2)(ii)(A) to provide 30-day notice of any subsequent price changes would also no apply because it is not the supplier determining the price – but rather FirstEnergy, in accordance with FirstEnergy’s approved default service plan. As such, the supplier may not always know the price 30-days in advance. The Commission invites comments on the concepts outlined above, including what to call the product and how it should be disclosed," the PUC said

The PUC also proposes banning any additional supplier fees for CAP customers, other than the percent off the PTC supply rate. Early termination fees (ETFs) were previously banned, but the PUC proposes to expand this to membership fees, monthly fees, etc.

"While it is clear in the November Order that ETFs are to be banned for CAP customers, other fees that suppliers charge customers in addition to the per-kWh rate, such as membership fees, enrollment fees, monthly service fees, etc. are not specifically addressed. These types of fees could have the effect of increasing the customer’s price above the PTC, even if the per-kWh price is below the PTC. Accordingly, the Commission proposes to prohibit any add-on fees; not just ETFs, as they would result in a product offered to CAP participating customers that has a rate that is not at or below the PTC for the duration of the contract," the PUC said

The PUC's tentative order also addressed contract expiration and renewal issues for CAP customers

"Suppliers requested that the Commission modify or waive the contract expiration and change of terms notices required by 52 Pa. Code § 54.10. They claim that in situations where the supplier intends to return the customer to default service, whether terminating an existing contract or not offering a new CAP compliant contract, that multiple notices are not necessary because the customer is not being presented with options, making the options notice unnecessary. The Commission agrees that this is reasonable and proposes modifying the notice requirements in such situations. All that will be required is that the customer be informed that the contract is being terminated or that it will end and that the customer is being returned to default service. The timing of such a notice must be given in accordance with the terms of the then existing contract, but not less than 30-days in advance of the customer being dropped to default service," the PUC said

"Suppliers have also asked that the Commission reiterate that, per the usual regulation procedures, if the customer does not respond to their contract expiration notice, the supplier can still renew the customer onto the new CAP-compliant product. Again, the Commission does not see any reason why a customer participating in CAP should be treated any differently than any other customer in this regard. We propose that a customer can be renewed/rolled into a new CAP-compliant product even if the customer fails to respond to the notices required by 52 Pa. Code § 54.10," the PUC said

"However, if the supplier is seeking to revise an existing contract to offer a new, CAP-compliant product, we think the guidance offered in the November 2013 Fixed Means Fixed Order should be applicable. We propose that the new, revised terms, can only be applied upon an affirmative response from the customer," the PUC said

Accordingly, the Commission proposes the following notice procedures for comment:

a. A supplier who intends to drop a customer to default service upon contract expiration or cancellation (is not offering the customer a CAP-compliant product): one notice, at least 30-days in advance of the drop, is required.

b. If a contract of a current customer is expiring and the supplier is offering to renew the customer onto a CAP-compliant product, the traditional two notices required by 52 Pa. Code § 54.10 must be provided. The supplier may proceed to renew the customer onto the CAP-compliant product if the customer affirmatively agrees to the contract or does not respond to the notices.

c. If the supplier wants to revise an existing contract with a customer, by moving the customer onto a CAP-compliant product, the traditional two notices required by 52 Pa. Code § 54.10 must be provided. The customer must affirmatively accept the new terms to be enrolled onto the new CAP-compliant product.

The PUC also discussed a potential "safe harbor" for expiration and renewal requirements if CAP status changes.

"The stakeholders suggested that perhaps the easiest way to create a 'safe-harbor' period is to tie it to the 52 Pa. Code § 54.10 contract change or expiration notice provisions. Specifically – the supplier should check the customer’s CAP-status prior (within days) to sending the options notice (the second notice that goes out at least 30 days prior to contract expiration). If that customer is now on CAP, the supplier is obligated to comply with the CAP-shopping rules. However, if that customer is not participating in CAP as of the second notice, they are free to proceed to complete the traditional notice procedures and can treat that customer as a typical, non-CAP customer – including offering to enroll the customer into a new product, etc. We invite stakeholders to comment on this proposed rule," the PUC said

The PUC reiterated its previously ordered CAP transition rules as follows: That for the purpose of transitioning PCAP customers who are currently being served by an EGS, as of June 1, 2019:

a. PCAP customers who are served under a fixed duration contract with an EGS as of June 1, 2019 (a “pre-existing fixed duration contract”) may remain with their EGS until the expiration date of the fixed duration contract or the contract is terminated, whichever comes first.

b. Non-PCAP customers served under a fixed duration contract who subsequently enroll in PCAP (also considered to be served under a “pre-existing fixed duration contract”) may remain with their EGS until the expiration date of the fixed duration contract or the contract is terminated, whichever comes first.

c. Upon expiration or termination of a pre-existing fixed duration contract, the EGS must either: (a) enroll the PCAP customer under a contract compliant with the new PCAP shopping rules; or, (b) return the PCAP customer to default service. For EGSs serving PCAP customers under a month-to-month contract as of June 1, 2019, the EGS must either: (a) return the PCAP customer to default service effective June 1, 2019; or, (b) enroll the PCAP customer under a contract compliant with the provisions, above, with an effective date of June 1, 2019.

d. For EGSs serving non-PCAP customers under a month-to-month contract who subsequently enroll in PCAP, the EGS must, within 120 days of the customer’s PCAP enrollment, either: (a) return the PCAP customer to default service; or, (b) enroll the PCAP customer under a contract compliant with the provisions, above.

"Some suppliers asked the Commission to reiterate that when we say a contract remains in effect until expiration or cancellation, that this means all provisions are in effect, including any ETF provisions. The Commission agrees and reiterates that existing contracts in place remain in effect – including ETF provisions," the PUC proposes in its tentative order

The PUC also addressed the customer referral program scripts.

Upon careful consideration of the stakeholder input, the Commission proposes reverting back to the pre-May 2017 scripting as follows:

FirstEnergy Call Center Mover/New Service Script prior to 5-26-17:

Are you satisfied with what I have done for you today? I have completed your order. With your permission, I will transfer you and your order information to our vendor. They will provide you with a confirmation number, offer you potential rate savings through our Electric Choice Program, and help you to set up other services if needed.

First Energy PTC and High Bill Calls Scripting prior to 5-26-17:

In Pennsylvania, you can choose the company that generates your electricity – also known as your electric supplier – without impacting the quality of your service. Would you like to speak to a representative who can offer you a potential rate savings by enrolling with an alternate supplier?

Vendor Call Scripting prior to 5-26-17:

[CUSTOMER NAME], there are many registered electric suppliers doing business in the state of Pennsylvania and you have the option of choosing any of them. In an effort to encourage choice, the State Utility Commission has made the Standard Offer program available to you.

The program offer is a 7 % discount off the Price to Compare that you are currently paying with [EDC NAME] as your default service supplier. There are no fees for selecting an alternate supplier today or any penalties for changing suppliers before the 12 months are up.

The current Price to Compare rate for [EDC NAME] is [X.XX] cents per kilowatt-hour. The rate for this Standard offer is X.XXX cents per kilowatt-hour. The Standard Offer rate may be higher or lower than the price to compare and the percentage savings you will experience compared to [EDC NAME] supplier generation will vary as the price to compare changes. The price to compare changes quarterly in March, June, September and December, however your Standard Offer rate will remain the same for 12 billing cycles and is the same no matter which participating supplier you select.

P-2017-2637855

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