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Pa. PUC Adopts Single Product Type For Price Capped Service To Low-Income Customers At FirstEnergy EDCs

Warns Suppliers On "Fixed Means Fixed" For Any Supplier Seeking To Revise Contract

February 28, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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The Pennsylvania PUC issued a final order addressing various terms of the Pennsylvania Customer Assistance Program (CAP, or PCAP) 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 was exclusively first reported by EnergyChoiceMatters.com, 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

The PUC's order issued today follows a tentative order issued in December which had been first reported by EnergyChoiceMatters.com

In its final order, the PUC ruled that under the PCAP shopping program at the FirstEnergy EDCs, retail suppliers may only serve such customers on a product with a per-kilowatt-hour price that is set at the price-to-compare or a percentage-off the price-to-compare (selected by the EGS) for the duration of the contract, with the product only permitted to be billed through rate-ready billing by the utility via utility-consolidated billing. Such PCAP customers served by retail suppliers shall be included in the FirstEnergy EDCs' Purchase of Receivables (POR) program

"[W]e note that EGSs are free to continue to use both bill-ready and rate-ready billing and select the billing method on a customer-by-customer basis, as long as all PCAP customers are billed via rate-ready as described above," the PUC said

This standard product-type offered to PCAP customers by retail suppliers shall be labeled as a "PCAP Customer Product" when presenting the product to potential customers by retail suppliers

"EGSs are expected to comply with the disclosure requirements at 52 Pa. Code § 54.5 (relating to disclosure statement for residential and small business customers) including § 54.5(c)(2). However, the requirements at § 54.5(c)(14)(i) and (ii) to provide a 24-month price history is not applicable. The requirement at 52 Pa. Code § 54.10(2)(ii)(A)1 to provide 30-day notice of any subsequent price changes also does not apply," the PUC said

The PUC declined to address, as outside the scope of the proceeding, further disclosure requirements for residential index price or percentage off product for non-PCAP customers, as sought by OCA

The product PCAP customers receive from an EGS shall never include any fees in addition to the per-kWh unit price. This prohibition includes any early termination fees, the PUC ruled

"Any EGS caught violating these requirements will be subject to all enforcement mechanisms available to the Commission, including civil penalties and license suspension and revocation in accordance with the Commission’s authority under Section 3301 of the Pennsylvania Public Utility Code, 66 Pa. C.S. § 3301," the PUC said

The PUC adopted the following process 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.

The Commission reiterated that existing contracts in place remain in effect -- including early termination fee provisions.

The PUC directed the FirstEnergy EDCs to routinely update its sync lists and the ECLs (eligible customer lists) it makes available to EGSs to identify customers that participate in PCAP. The FirstEnergy EDCs were also directed to identify PCAP customers in the account number access portals in a similar fashion.

"EGSs are obligated to access and use this information to identify PCAP customers and to then treat the PCAP customers in the manner described in this Order and the approved PCAP shopping program," the PUC said

The PUC addressed contract change, renewal and notice procedures as follows.

The PUC first addressed situations in which a supplier wishes to "revise" an existing contract with a PCAP customer to offer the customer the PCAP Customer Product.

RESA had recommended that the Commission not apply the PUC's Fixed Price Label Order ("Fixed Means Fixed") to require affirmative consent before the EGS may revise the existing contract in the case where the customer is placed on the PCAP Customer Product

The PUC said, "concerning suppliers who want to revise an existing contract -- we first want to reiterate that we are not requiring suppliers to revise existing contracts -- nor are we encouraging suppliers to revise existing contracts. We have stated repeatedly that customers served under a fixed-duration contract who subsequently enroll in PCAP may remain with their EGS until the expiration date of the fixed duration contract or the contract is terminated, whichever comes first. In proposing rules and procedures for suppliers to revise an existing contract, we are merely outlining the rules and expectations for doing so if the supplier so chooses -- this is not intended to require or encourage suppliers to revise existing contracts. If a supplier chooses to pursue this option -- we direct them to the Commission’s 2013 Guidelines for Use of Fixed Price Labels for Products With a Pass-Through Clause (Fixed Means Fixed Order)."

"Accordingly, we decline to make the exception that RESA requests. Suppliers who wish to propose changes to an existing contract are directed to the guidance provided in the Fixed Means Fixed Order. This includes obtaining affirmative customer consent and the expectation that the customer’s disclosure statement provides for the possibility of the supplier proposing changes during the duration of the contract. As for RESA’s question as to what is expected if the customer does not provide an affirmative response – we direct EGSs to page 26 of Fixed Means Fixed Order, where the Commission stated that a 'lack of a customer response would be deemed a rejection of the new terms.' The Commission further stated that '[i]n the event of a rejection by the customer, the customer is then free to pursue other opportunities in the market with no penalty.' This infers that the EGS is free to cancel the contract in such an event – but we again note that this is assuming that the disclosure statement provides for such an eventuality."

"Concerning an EGS that wants to drop a customer to default service upon contract expiration or cancellation, we agree with RESA that this should be governed by the cancellation provisions of the disclosure provided to the customer. RESA is correct in that we have few rules addressing contract cancellation -- these matters have generally been left to the agreement between the EGS and the customer as expressed in the disclosure document. Accordingly, while we will maintain our proposal -- we will also include an exception for those instances where the disclosure statement provides for cancellation of the contract and the notices outlined within," the PUC said

"Concerning a contract that is expiring and the supplier is offering to enroll the customer onto a PCAP-compliant product, we still see no good reason why the customer should not receive the conventional two notices required by 52 Pa. Code § 54.10. As discussed above, the new PCAP-compliant product may or may not be more advantageous from a customer’s perspective. As such, the customer should have the same right to be provided notice of the product and their options the same as any other customer. And one of those options could be the customer obtaining a PCAP-complaint [sic] product -- from a different EGS if they so choose. We see no good reason why the PCAP participant should not have the same information, and the same time period, to consider and shop as any other customer," the PUC said

As such, the PUC adopted the following regarding contract expiration notices for PCAP customers

a. A supplier who intends to drop a customer to default service upon contract expiration or cancellation (is not offering the customer a PCAP-compliant product): the contract cancellation and notice provisions described in the disclosure statement applies. In instances where the disclosure statement does not address cancellation and notices, the EGS shall provide at least one notice 30-days in advance of the drop. EGSs remain free to provide two notices at their discretion.

b. If a contract of a current customer is expiring and the supplier is offering to renew the customer onto a PCAP-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 PCAP-compliant product if the customer affirmatively agrees to the contract or does not respond to the notices. However, the requirement at 52 Pa. Code § 54.10(2)(ii)(A) to provide 30-day notice of any subsequent price changes shall not apply.

c. If the supplier wants to revise an existing contract with a customer, by moving the customer onto a PCAP-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 PCAP-compliant product.

In terms of ordering language, the PUC held:

a. A supplier who intends to drop a customer to default service upon contract expiration or cancellation: the cancellation and notice provisions of the disclosure agreement between the supplier and the customer applies. In instances where the disclosure does not address cancellation and notices, the supplier shall provide at least one notice 30-days in advance of the drop.

b. If a contract of a current retail electric supply contract is expiring and the supplier is offering to enroll the customer onto a compliant contract, the two notice requirements of 52 Pa. Code § 54.10 shall apply. The supplier may proceed to enroll the customer into the compliant contract if the customer affirmatively agrees to the contract. The supplier may also proceed to enroll the customer into the compliant contract if the participant does not respond to the notices, however, the supplier is not required to provide 30-day notice of any subsequent price changes.

c. If a supplier seeks to revise an existing non-compliant contract with a participant, by offering to move the participant into a compliant contract, the two notice requirement of 52 Pa. Code § 54.10 shall apply. The participant must affirmatively accept the new terms to be enrolled onto the new compliant contract.

The PUC also addressed a "safe harbor" period to reflect instances where the supplier renews a customer and the customer, after receiving the renewal notices, becomes a PCAP customer

For the purposes of renewing all customer contracts, all electric generation suppliers are obligated to determine if the customer is participating in the PCAP program at the time the second (options) notice is provided pursuant to 52 Pa. Code § 54.10(2) at least 30 days prior to the expiration of the contract. If the customer is not a participant in the PCAP program at the time the electric generation supplier sends the second (options) notice, the electric generation supplier is free to treat that customer as a non-PCAP participant. If the customer is enrolled in PCAP at that time, the EGS is obligated to follow the procedures and product rules for PCAP participating customers.

The PUC reiterated that EGSs are free to include in their disclosure statements a cancellation provision based upon a customer’s PCAP status.

The PUC directed that the FirstEnergy EDCs shall have enough EDI testing resources and capacity available to prevent unreasonable delays in certifying suppliers for rate-ready billing. The EDCs are to complete rate-ready EDI testing for each eligible EGS within 30 days of the EGS requesting certification during the three months before and the three months after it implements the PCAP shopping program on June 1, 2019. These testing timeframes are only applicable to EGSs that are already certified for bill-ready billing on the FirstEnergy EDCs' system.

The FirstEnergy EDCs were also directed to convene a workshop for EGSs to educate EGSs on the new PCAP shopping program rules and procedures. The EDCs shall also post information about the PCAP shopping program on their supplier web-portal and shall ensure that new EGSs coming onto their systems are directed to the necessary information.

Customer Referral Program Scripts

The PUC's order also addressed scripts for the Customer Referral Programs at the FirstEnergy EDCs, generally revering to the pre-May 2017 scripting with only one significant revision

The script, if/once the customer is transferred to the CRP vendor, will maintain a reference to the initial 7% discount early in the script. OCA had sought removal of the use of the term "7%" in an initial sentence, with only the term discount used instead, with the 7% to be referenced later

The only significant revision adopted by the PUC as compared to its tentative proposal is that language stating, "You can cancel this contract anytime without penalty and select another supplier or return to default service with [EDC NAME] for service at the Price To Compare," was added at the end of the script

P-2017-2637855 et al.

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