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Maryland PSC Approves Supplier Consolidated Billing, Implementation Not Immediate, Subject To Working Group
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Note: EnergyChoiceMatters.com was first to report at 2:38 p.,m. on May 7 that the Maryland PSC authorized SCB, with an exclusive alert to our email alert subscribers
The Maryland PSC today issued an order providing that, "supplier consolidated billing for retail electric and gas
supply customers is authorized in Maryland"
However, supplier consolidated billing (SCB) implementation will not be immediate, as the PSC directed a working group to address implementation
Other highlights of the order include:
• The PSC will not allow retail suppliers using SCB to initiate disconnection for non-payment
• Subject to specifics in a working group, EDCs will be required to purchase outstanding distribution-related receivables for SCB customers returned to SOS (due to non-payment)
• A supplier's SCB bill must include the utility’s price to compare
• The PSC declined to adopt specifics regarding supplier qualifications for SCB and cost recovery at this time
A coalition of retail suppliers (NRG Energy, IGS Energy, Just Energy Group, Direct Energy and ENGIE Resources) provided the following statement on the PSC's order: "The decision to allow retail suppliers to send electric and natural gas bills to customers is a victory for consumers because it will increase competition and give customers access to more innovative products and services that meet their individual needs. Supplier Consolidated Billing, as it is known, is a natural and necessary next step in moving Maryland toward the robust market that has been envisioned for years. We are grateful for the PSC’s leadership on this issue and we look forward to working with the PSC and the rest of the industry to implement Supplier Consolidated Billing."
Regarding implementation, the PSC said, "Staff and OPC are correct
that the complexity of the SCB proposal does not lend itself to immediate implementation
at this time, and interested stakeholders should have sufficient opportunity to consider the
many implementation issues raised by the Petition, including unintended consequences."
"Accordingly, the Commission directs that a workgroup led by Staff be convened
that is comprised of representatives of the retail suppliers, the utilities, OPC, MEA, and
other interested stakeholders ('the SCB Workgroup'). The SCB Workgroup will have 60
days from the date of this Order to file a timeline for implementing SCB, including a
procedural schedule with deliverables for Commission approval. The Commission also
directs Staff to form a Technical Implementation Workgroup ('TIWG') in conjunction
with the existing EDI workgroup to address technical issues pertaining to the
implementation of SCB, including tariff issues related to gas and electric billing and the
resolution of system differences between utilities and suppliers," the PSC said
Regarding disconnection under SCB, the PSC said, "Without resolving the legal arguments addressing the Commission’s authority to
allow SCB providers to direct utilities to disconnect customers for nonpayment, the
Commission finds for policy reasons that it is not appropriate at this time to authorize SCB
providers to direct service terminations."
"The Commission finds that service terminations directed by SCB providers could
interfere with the utilities’ ability to ensure that any disconnection is fully consistent with
the customer protections contained in the PUA and the Commission’s regulations. For
example, once the utility receives a supplier direction to disconnect a customer, the utility
could be left unaware if the customer subsequently makes a payment or qualifies for a
customer assistance program, or qualifies under one of the many COMAR provisions
prohibiting or requiring delay of termination. Additionally, the Commission finds that the
involvement of intermediate parties could delay application of low-income or emergency
funds and put customers at unnecessary risk of disconnection. Furthermore, the Joint
Utilities demonstrated that it is not clear how normal payment posting rules would be
followed for customers that have existing utility arrears and then enroll with an SCB
provider," the PSC said
"At least at
this time, while the SCB Workgroup addresses the implementation details of how to
achieve SCB, the Commission finds it is not appropriate to extend termination authority to
suppliers. However, in response to the concerns raised by the suppliers, including
management of bad debt, the Commission will require that utilities purchase the
outstanding distribution charges of a delinquent customer account upon the customer’s
return to standard offer service, as further discussed below. For other charges, the SCB
provider should resort to the traditional remedies of other non-regulated businesses,
including reporting to credit agencies, seeking monetary judgments in court, and pursuing
collection activities," the PSC said
"In implementing SCB, the Commission finds that suppliers should provide
purchase of receivables to the utility on substantially the same terms as provided under
UCB [utility consolidated billing]. The Workgroups should fully explore this arrangement and propose regulations,
tariffs, and sufficient protocols (e.g., EDI/XML) to effectuate this relationship. The
particulars of this process should be reviewed to ensure no undue impact on the utility.
In addition, where different treatment of utility and supplier POR is justified or where
additional clarity is needed, the SCB Workgroup or TIWG (collectively, 'Workgroups')
should raise these issues for Commission consideration," the PSC said
"Even without allowing a supplier to direct termination of utility services, allowing
suppliers to undertake SCB and POR necessarily means that supplier billing and collection
practices will have some impact on a customer’s distribution-related balance. As such, the
Commission finds that certain SCB and POR practices are necessary to ensure that any
charges contributing to a disconnection are properly handled. The primary safeguard is
requiring SCB providers to follow a payment posting priority that will minimize
distribution arrearages. The Workgroups should identify and propose a fair and equitable
payment posting priority and any other protections that may be necessary," the PSC said
"When a supplier is no longer serving a customer, after reasonable efforts to collect, the supplier should not be required to hold any debt
attributable to the customer’s distribution charges paid under POR. Where a supplier can
demonstrate the amount of unpaid distribution charges, the utility should repurchase
those charges. The discount rate when a utility re-purchases distribution-related debt
should be at a zero discount rate unless the SCB Workgroup can provide alternative
calculations which are supported by a compelling analysis," the PSC said
The supplier will retain any debt related to its own supply
charges and any non-utility costs, and the supplier can use any legal collection methods available.
The PSC noted that, "implementing this
process will require the Workgroups to engage in a careful review and consideration of
existing regulations and tariffs. Careful consideration should be given to any requirements
for supplier collection notices to ensure they clearly outline what charges will and will not
be eligible for utility termination. In addition, the Workgroups should develop regulations
to ensure that customer energy assistance payments are being applied to the appropriate
charges on the SCB. Finally, the Workgroups should develop specific record keeping
requirements for suppliers offering SCB, which will satisfy the utilities and the
Commission that any re-purchased debt is accurately accounted for."
Regarding the content of SCB bills, the PSC said, "The Commission finds that a supplier that offers SCB is required to provide all the
same consumer protections, disclosures (including the utility’s price to compare), notices,
and billing information required of a regulated utility. Under PUA § 7-505, the
Commission has a number of obligations related to ensuring that customers receive
information related to emissions and fuel mixes as well as unbundled charges for
distribution, transmission, universal service charges, customer charges, taxes, and other
charges identified by the Commission. Through PUA § 7-604, the Commission has
authority to 'provide for contracting, enrollment, and billing practices and procedures' for
gas suppliers seeking to offer SCB. Finally, the protections provided to electric and gas
customers must be consistent 'unless the Commission determines that the circumstances do not require consistency.' Therefore, any consumer protections related to SCB should
cover both electric and gas bills."
"These statutory requirements represent the minimum disclosures required by law.
In addition, suppliers offering SCB will need to provide all surcharge line items and comply
with all applicable COMAR requirements related to consumer protections. These
requirements are embodied throughout our COMAR regulations. It may be appropriate
to leave some of these responsibilities with the utility, and the SCB Workgroup should
explore the appropriate entity to provide each service," the PSC said
"The SCB Workgroup should carefully review the PUA, existing Commission
precedent on SCB, and the filings in this docket to propose electric and gas SCB
regulations in COMAR that will meet these minimum consumer protection requirements.
Where compliance is not possible or there is a justification to deviate from these standards,
the SCB Workgroup should identify any deviations along with the potential justification.
The SCB Workgroup should also identify any additional consumer protections that should
be adopted to ensure customers are protected under SCB," the PSC said
"The Petition and party comments identify some new and additional protections
specific to SCB that must be explored and presented for Commission consideration. The
SCB Workgroup should ensure that Staff’s and Potomac Edison/SMECO’s concerns
regarding customer service levels, including dispute resolution, and access to billing and
payment histories is adequate to provide necessary utility services. The SCB Workgroup should consider new disclosure and notice requirements for how both utilities and SCB
suppliers communicate the varying relationships to the customer, the content of past due
notices by SCB suppliers, and utility notices for customers selecting SCB. These
requirements should not act as a barrier to the new and innovative offerings identified in
the Petition, such as flat bills. For example, as the Commission found in reviewing the
license application of Deca, the requirements of § 7-505 do not prevent a flat bill offering
provided that the necessary information is available on the bill for the customer’s review," the PSC said
The SCB
Workgroup was directed to examine customer education issues relating to informing customers of a new billing method, including who will
be responsible for conducting consumer education as well as how it will be funded.
Regarding cost recovery, the PSC said that the Commission does not have sufficient information to determine either the costs
or the appropriate cost recovery mechanism for SCB implementation at this time
The Commission directed the SCB
Workgroup to identify and estimate, with as much detail as possible, these and any other
costs and benefits related to SCB.
"Historically, utility investments necessary to enable the retail supply market have
been recovered from ratepayers through base rates or from participating suppliers through
the utility POR mechanism. SCB is an important and timely evolution in customer choice,
and the SCB Workgroup should also consider varying cost recovery mechanisms and
present either a consensus approach or options for Commission consideration," the PSC said
Regarding increased supplier qualifications for suppliers to use SCB, the PSC said, "a comprehensive set of supplier qualifications that protects ratepayers
while balancing market access for new entrants and the interests of both participating
utilities and suppliers is necessary. Thus, while the Commission does not adopt the
qualifications as currently presented, any proposed regulations should comprehensively
address the capabilities necessary to ensure that these functions are performed on par with
existing utility offerings. Further, the regulations should be tailored to demonstrate that a
supplier can meet the rigorous demands of increased customer service and dispute
resolution functions, complex billing requirements, and the quality assurance and record
keeping necessary to handle utility charges that may contribute to potential utility
disconnections. These regulations should be developed through the workgroup process to
incorporate the varying stakeholder perspectives."
The PSC found that it has authority to adopt SCB under statute, and further said SCB is consistent with policy goals
"Having found that it has the authority to order the implementation of SCB, the
Commission determines that as a matter of policy, SCB represents the next logical step for
Maryland to fully implement the Electric Choice Act and the Natural Gas Act. A direct
relationship between retail suppliers and their customers resulting from direct billing could
support the growth of retail competition in Maryland," the PSC said
"The Commission finds that the existing billing arrangements of UCB and dual
billing should be augmented with SCB at this time. Utilizing UCB, suppliers are limited
to a section of the utility’s bill and limited in the number of characters they can use to
describe their product as well as the products they are permitted to list. Dual billing
requires the customer to receive multiple bills, an outcome customers generally dislike.
Supplementing utility bills with offers for value-added products or services can be less
effective for suppliers as some customers may view non-utility correspondence as junk
mail. The number of customer complaints received by the Commission from customers
professing surprise that they have been served by retail suppliers is an example of the
confusion the current billing methods have engendered. In contrast, SCB should assist
suppliers in establishing brand identity and clarifying the products available to utility
customers," the PSC said
"Finally, the Commission finds that SCB should be available to retail suppliers as
an option, not a requirement, at this time. This Order does not mandate that any retail
supplier adopt or offer SCB. For many small suppliers, the expense and time required to
offer SCB may be prohibitive. Other suppliers may simply find SCB incompatible with
their business models. The billing methods of UCB, dual billing, and SCB are not mutually
exclusive options and should be available for qualified retail suppliers, at their election.
Additionally, allowing all these methods provides a greater variety of competitive offers
for consumers," the PSC said
Case 9461
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Retail Suppliers Not Granted Disconnection Authority
May 7, 2019 -- 2:38 p.m.
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Reporting by Paul Ring • ring@energychoicematters.com
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