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PUC Staff Oppose Rule Waiver Sought By Retail Supplier As Part Of Marketing Flat Bill Product

July 26, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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Staff of the Public Utilities Commission of Ohio have recommended denying a petition from Astral Energy, LLC for a waiver of a rule requiring the specific listing of the rate to be charged per month in marketing materials that accompany a contract, for its flat bill product

As exclusively reported by (story here), Astral Energy, LLC filed a petition with the Public Utilities Commission of Ohio asking PUCO to waive application of Rule 4901:1-1-21-05(A)(4) with regards to Astral’s "Ultimate Power Plan" (UPP), which is a flat bill product

For residential customers, Astral has developed the UPP, which is currently offered by Astral in several states, to supply residential competitive retail electric service (CRES) through a flat-rate plan customized to each customer’s energy usage.

Under the UPP, the customer pays a flat-rate dollar amount per month for CRES for a six month contract period. Astral determines the customer’s monthly flat-rate price based on a propriety algorithm that analyzes the customer’s historic usage, peak vs. off peak usage, and other factors. Thus, the flat rate charged is unique for each UPP customer.

In its original waiver petition, Astral said that the mechanics of signing a customer up for a UPP plan work as follows: a prospective customer first contacts Astral to request a quote for a UPP plan. Astral obtains permission from the customer to access the customer’s generation usage history. Astral then uses its propriety algorithm to determine the flat-rate UPP offer, which typically takes 48 hours to generate. Astral contacts the customer with the flat-rate UPP offer and provides the customer with a proposed UPP contract with the flat-rate monthly dollar amount to be charged specifically listed. The customer then decides whether to accept the offer and execute the proposed UPP contract or to decline the offer. If the customer executes a UPP contract, once its six-month term has expired, the customer may choose to drop or switch service from Astral Energy without penalty or fee.

Astral noted that Rule 4901:1-1-21-05(A)(4) provides that each competitive retail electric service (CRES) provider that offers retail electric generation service to residential or small commercial customers shall provide, in marketing materials that include or accompany a service contract, sufficient information for customers to make intelligent cost comparisons against offers they receive from other CRES providers. By rule, offers shall at a minimum include, for flat-monthly rate offers, "a specific listing of the rate to be charged per month for the duration of the contract."

Astral sought a waiver due to the requirement for this "specific listing of the rate to be charged per month" with regards to marketing materials. Such marketing materials are provided before Astral obtains permission from the customer to access the customer’s generation usage history, which as noted above is used to generate a customer-specific offer that is then communicated to customers via a proposed UPP contract with the flat-rate monthly dollar amount to be charged specifically listed therein

Astral has said that while the UPP is a flat-rate offer, by the nature of the program the flat-rate charged can be different for each customer. "Thus, it is not possible to identify a specific dollar amount in marketing materials for the UPP as Rule 4901:1-1-21-05(A)(4) requires. In addition, due to the number of factors that Astral’s propriety formula uses to determine the flat-rate offer, it could be misleading to provide a dollar amount in marketing materials that is identified as an 'average household' price," Astral said

Staff recommended that PUCO deny the waiver request.

"Staff believes that marketing materials should contain sufficient information for customers to make intelligent cost comparisons against offers they receive from other CRES providers. Providing consumers with rate information in marketing material is basic to conducting a cost comparison. Because Astral’s marketing materials would not provide a price, customers would be unable to adequately compare Astral’s price to other CRES providers’ prices," Staff said

Staff noted that Ohio Adm.Code 4901:1-21-05(A)(4) is currently under review by Staff not only in response to the Applicant’s waiver request, but also in the Commission’s five year rule review in Case No. 17-1843-EL-ORD. "Staff believes it is far more beneficial to the Commission and the industry to use the rulemaking process to address the Applicant’s concerns because the rule review process is designed to allow all interested parties to provide their comments and clarifications and, ultimately, the result is that the same rules will apply to everyone," Staff said

Staff further noted that Ohio Adm.Code 4901:1-21-03(D) requires that CRES providers furnish, "at least one current [residential] offer for posting on the [EnergyChoice Ohio] apples-to-apples chart within four calendar days of making such offers to Ohio customers."

Staff said that, "Astral’s flat-monthly rate offer, if approved, would not be specifically listed in its marketing materials or fit the layout and capabilities of the existing EnergyChoice Ohio apples-to-apples chart design. Therefore, this type of specialized offer cannot be posted on the apples-to-apples charts for customers to compare costs. As a result, Astral would need to either request a waiver of Ohio Adm.Code 4901:1-21-03(D), or post another current offer in each of the territories where it will be marketing the flat-monthly rate offer."

"Staff appreciates the innovative product that Astral is attempting to market to its customers. However, the type of specialized offer that Astral is proposing cannot be posted on the website, and therefore goes against the fundamental element of shopping for CRES, cost comparison," Staff said

"In addition to the above concerns, Staff notes that all electric utilities provide monthly summary data to CRES providers. Additionally, electric utilities with smart meter installation are developing programs to provide peak load information to CRES providers as approved in their respective Electric Security Plans or other applicable case. Therefore, Staff is concerned about Astral’s method of obtaining permission to access the customer generation usage history beyond the monthly information that CRES providers already receive. Staff would want to ensure that Astral is following the requirements of Ohio Adm.Code 4901:1-10-24 prior to obtaining such information," Staff said

"Staff is concerned that the customer may be required to provide its customer account number to Astral, when it may not be needed, if the waiver is granted. Staff believes that the monthly information that Astral receives on the pre-enrollment list makes it unnecessary for Astral to obtain permission from the customer to access the customer’s generation usage history," Staff said

If the Commission does grant the sought waiver, Staff alternatively recommended that the Commission ensure that Astral understands that it must comply with the requirements to obtain customer specific information as required in Ohio Adm.Code 4901:1-10-24. In addition, Staff recommended that the waiver expires when the Commission issues its final rules in Case No. 17-1843-EL-ORD.

Astral Energy said in a statement that, "Astral Energy’s Ultimate Power Plan, is a monthly lump sum all inclusive unlimited electricity product! It appears that Ohio wants a per KWh price to compare, our product is custom priced to reflect each consumers unique energy usage! Astral is going to address all Ohio’s concerns!"

The Ohio Consumers’ Counsel also opposed the waiver request, stating that allowing marketing materials without sufficient pricing information is a, "very bad idea[.]"

To the extent PUCO grants the waiver, OCC sought the following conditions: Astral should be required to disclose in marketing materials how its charges over the initial contract period compare with the local public utility’s SSO prices during the past year. Astral should also be required to provide customers on a semi-annual basis a summary of how their charges compare with the local public utility’s SSO and the value of any savings or losses. Finally, Astral should not be permitted to automatically renew customer contracts if there are any changes in the terms and conditions (including price).

Case No. 18-0743-EL-WVR

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