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Retail Supplier Disagrees With Regulator's Characterization Of Plan As Variable Rate

March 22, 2019

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

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Public Power, LLC in a response to the Connecticut PURA disagreed with PURA's characterization of the company's Monthly Fee Capacity Plan (MFCP) as a variable rate plan, which are prohibited in Connecticut.

The plan includes a fee charged on a monthly basis, and the potential change of such fee during the plan's term prompted PURA to characterize the plan as a variable rate

As exclusively reported by EnergyChoiceMatters.com, PURA had noted that, in a filing including revised terms and conditions for the product submitted by Public Power, "Public’s response included Additional Terms & Conditions For Select Plans, which states that the Company reserves the right to increase the Monthly Fee by up to 100% of the then current Monthly Fee by providing the customer with at least 30 days’ notice, and sets no limits on the number of times throughout the contract term the Company may increase the Monthly Fee. This document also states that the Company reserves the right to increase the Monthly Fee if the customer’s monthly usage changes by more than 20%."

Public Power noted that it has never increased a Connecticut residential MFCP customer’s monthly fee, and said that it certainly has never increased the monthly fee more than once in a four-month period

Moreover, Public Power said in a response to PURA that the absence of language in the MFCP Terms and Conditions affirmatively confirming that Public Power will not violate the Variable Rate Ban, in and of itself, does not lead to the conclusion that Public Power’s MFCP Terms and Conditions violate the Variable Rate Ban.

Nevertheless, in an effort to resolve the issue with PURA, Public Power has removed any language regarding its ability to increase the monthly fee in updated MFCP Terms and Conditions.

More specifically, Public Power said in its response that, "Public Power, LLC ('Public Power') received the Public Utilities Regulatory Authority's ('Authority') correspondence dated March 12, 2019, directing Public Power to make additional changes to the Contract and Terms and Conditions of its Monthly Fee Capacity Plan ('MFCP') offer (the 'March 12th Correspondence'). The March 12th Correspondence raised issue with the fact that Public Power's MFCP Terms and Conditions did not specifically state that the MFCP would not increase more than once in a four-month period. As a result, the March 12th Correspondence concluded that Public Power's MFCP Terms and Conditions did not comply with the Authority's September 30, 2015 decision in Docket No. 15-06-15 and General Statutes of Connecticut §16-245o(g)(4) banning residential variable rate offers (together the 'Variable Rate Ban')."

Public Power said in its response that, "The absence of language in the MFCP Terms and Conditions affirmatively confirming that Public Power will not violate the Variable Rate Ban, in and of itself, does not lead to the conclusion that Public Power's MFCP Terms and Conditions violate the Variable Rate Ban. As a result, Public Power disagrees with the Authority's position that any prior version of the MFCP Terms and Conditions violated the Variable Rate Ban. In fact, Public Power has never increased a Connecticut residential MFCP customer's monthly fee, and certainly has never increased the monthly fee more than once in a four-month period. Thus, Public Power has not violated the Variable Rate Ban. Nevertheless, in an effort to resolve this matter with the Authority, Public Power has removed any language regarding its ability to increase the monthly fee in the enclosed updated MFCP Terms and Conditions. If in the future Public Power chooses to offer a MFCP product to residential customers where the monthly fee may change, the monthly fee will not be changed more than once in a four-month period in compliance with the Variable Rate Ban."

Public Power further said in its response that, "While Public Power acknowledges the Authority's authority over certain, specified matters related to supplier contracts and offers, it does not believe that the Authority has the power to dictate the terms of suppliers' offers that otherwise comply with applicable legal requirements, or require that suppliers amend existing contracts with consumers. In an effort to expeditiously address the concerns raised in the Authority's correspondence dated March 6, 2019, Public Power voluntarily and immediately updated its MFCP Terms and Conditions and provided such Terms and Conditions to current MFCP customers through an email message on March 6, 2019. This change to the MFCP Terms and Conditions of current MFCP customers, caused inquiries, consumer confusion, and cancellations. Public Power believes that issuing a second version of MFCP Terms and Conditions to consumers within two weeks, will cause further consumer confusion and additional disruption to Public Power's business. Although Public Power is voluntarily making the enclosed changes to its MFCP Terms and Conditions, given that the current MFCP Terms and Conditions do not violate the Variable Rate Ban, Public Power will update the MFCP Terms and Conditions with the enclosed Terms and Conditions document, which will be posted at the hyperlink previously distributed to existing MFCP customers on March 6, 2019, but it will not issue an additional notice to current MFCP customers regarding updated MFCP Terms and Conditions."

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