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Retail Supplier Revising How Monthly Fee Charged, Presented To Customers At Regulator's Direction

March 7, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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At the direction of the Connecticut PURA, Public Power, LLC is changing the manner in which it charges and presents to customers a fee which is charged on a monthly basis over the contract's term

At issue is a fee under Public Power's Monthly Fee Capacity Plan (MFCP) which is charged on a monthly basis.

In response to a prior PURA interrogatory concerning the fee, Public Power had said that the monthly fee is not an early termination fee, but is a form of an enrollment fee. Public Power noted that PURA has accepted plans with enrollment fees on its public EnergizeCT rate board. Public Power previously charged an up-front enrollment fee, but had said that, over time, it found that some consumers would prefer to pay the enrollment fee on a monthly basis rather that in one lump sum, therefore Public Power created the MCFP product which allows for this.

In response to a prior interrogatory from PURA, Public Power had said that, if a customer terminates the MFCP contract prior to the end of the term, then "logically the customer would be responsible for paying the remainder of the enrollment fee that was spread out over the entirety of their contract, however, Public Power has never continued to charge a customer the monthly fee after termination."

In response to a prior interrogatory from PURA, Public Power noted that the MFCP monthly fee is not called an "enrollment fee" so that the product can be accurately displayed on the EnergizeCT rate board. Under the mechanics of the site, "enrollment fee" signals an upfront fee prior to enrollment. Public Power said that referring to the MFCP monthly fee as an enrollment fee would cause consumer confusion and lead it to be inaccurately displayed on the EnergizeCT rate board.

Public Power also said that it has never charged early termination fees on either its one-time enrollment fee contracts or MFCP contracts.

PURA had also previously inquired about language in Public Power's terms of service which indicated that the monthly fee could increase.

In response to such inquiry, Public Power had previously stated that, "Public Power has never increased a customer’s monthly fee. Public Power used this language in the MFCP Terms and Conditions because many of the MFCP products are long term products and the future can be uncertain. Public Power does not currently have any plans to increase its monthly fees, however, the MFCP Terms and Conditions reserve this right in the event of future circumstances the occurrence of which cannot be predicted at the present. In the event that Public Power was required to increase a monthly fee, it would first provide 30 days’ notice to the customer and allow the customer to cancel without penalty in accordance with the MFCP Terms and Conditions."

In response to Public Power's responses above, PURA on March 6 directed Public Power to revise how the product is presented to customers.

PURA said that, "An enrollment fee is a one-time fee that may not increase and labeling this offer as a Monthly Fee Capacity Plan is confusing and potentially deceptive since the monthly fee currently is subject to multiple increases. Moreover, it is unclear in Public’s offer that a customer will be responsible for the entirety of the monthly fee for the duration of the contract in the same way they would be responsible for paying an enrollment fee, either as a one-time upfront payment or over time through an installment plan."

"As a result, the Authority instructs Public to alter the information that is provided under this offer. Public must charge a fixed monthly fee for the duration of the contract (i.e., a monthly fee not subject to increase). Public must clearly indicate to customers in its marketing and on its website that they will be responsible for the total amount (i.e., fixed monthly fee multiplied by number of months in the contract) and to provide the total amount that will be owed. When posting this offer to the EnergizeCT rate board, Public must upload the entire amount of the enrollment fee. The Rate Board will then calculate the monthly impact of the fee on a customer’s savings. Public must then include the following language in the Other Information field on the Rate Board. 'Even if the contract is terminated, customer owes the full enrollment fee which may be paid in monthly installments of $XX.XX. Other conditions apply.' The Authority will include this language in its Rate Board supplier self-reporting help portal regarding this type of offer," PURA directed

PURA on March 6 directed Public Power to send the Authority its updated Contract and Terms and Conditions reflecting the above directives on or before March 20, 2019. Specifically, the revised documents must indicate that the monthly fee is an enrollment fee of $XX.XX and is being recovered through a fixed monthly installment fee of $XX.XX that will not increase. The documents must also state that the customer will be responsible for the remaining balance of the enrollment fee if they cancel the agreement.

PURA also said on March 6 that it would remove Public’s MFCP offers from the EnergizeCT rate board until it receives verification that the contracts have been updated. On or before March 20, 2019, Public must provide all current MFCP customers with the revised Terms and Conditions

In a statement to EnergyChoiceMatters.com, Public Power stated, "We appreciate PURA’s guidance in this matter and have already begun compliance."

Public Power has already filed with PURA updated contracts and Terms and Conditions removing the language which had provided Public Power the right to charge the monthly fee for the entirety of the contract term, regardless of whether the customer left the contract early.

"Going forward, the monthly fee will solely be charged while the customer has indicated an intent to receive, or is receiving, the product," Public Power said in the filing

"Public Power believes this modification addresses the Authority's concerns, and requests that the Authority reactivate the MCFP products on the EnergizeCT rate board. Public Power has notified all current MCFP customers of the change in the terms of service," Public Power said in the filing

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