Regulator Instructs Retail Supplier To Cease Enrolling New Customers

Regulator Cites Concerns With Contracting, Rate Presentation

Wattifi Explains Operations Currently In Beta, Not Actively Marketing, Will Address Concerns

November 28, 2019

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

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The Connecticut PURA has issued a letter to Wattifi, Inc. (Wattifi) in which PURA, "instructs Wattifi to cease enrolling new customers," until Wattifi has resolved various concerns cited by PURA in the letter

See background on Wattifi here, in EnergyChoiceMatters.com's exclusive story on the supplier's creation

Wattifi provided the following statement concerning the matter:

"Wattifi, Inc., a Connecticut based company, has as our mission to provide Connecticut electricity consumers with access to the lowest electricity prices available. This involves enabling customers to benefit from their decisions as to not only how much electricity they use but, more importantly, when they use it. For nearly 20 years, virtually all electricity consumers has had but one option in the electricity product they receive: fixed prices. This means that consumers pay the same kilowatt price for their electricity supply, no matter when they use it. Fixed electricity prices prevent any customer who uses more of their power during low demand hours from receiving the benefit of those decisions and eliminates any incentive for all other customers who might make better decisions if given price signals that reflect actual market conditions. Fixed prices increase costs to all consumers as inefficient use of electricity increases peak demand on the system, increasing investments to meet this demand and increases carbon emissions from dirtier generators that must be called upon to meet the increased demand.

"Wattifi provides customers with access to wholesale prices, specifically hourly prices, to benefit electricity consumers who can take advantage of lower priced hours or shift their usage when prices are higher.

"Wattifi has spent the last year working closely and cooperatively with Connecticut’s two largest utilities, Eversource and United illuminating (UI), to enable customers to receive an interval meter to record their usage at the time they use it, to install the Wattifi Connect device for customers to see their home or business usage in real time, to receive alerts from Wattifi to take advantage when wholesale prices are low or to shift usage when prices are higher, and, most importantly, for customers to have their actual usage profile, rather than a standard profile, used when the customer’s load is settled. (Currently, most customer usage is based on a standard profile which may not reflect a customer’s actual usage pattern.) This last piece is critical for customers to receive the full benefit of not only how much, but when, they use electricity.

"Although Wattifi has been working diligently to put in place the critical pieces necessary to engage customers in their electricity use, the reality is we are cutting a new path that has not been available to consumers as there has been little benefit to fixed price customers to actively engage in their electricity use.

"To fully test the Wattifi Customer Engagement process, customers that have enrolled, in particular residential customers as 'Friends and Family', have done so not as part of a marketing effort, but as part of a beta or development stage. However, notwithstanding where we are in our development, Wattifi will immediately address any issues raised by PURA to ensure that we are in full compliance with all policies and procedures and are maintaining the confidence of the Authority that we are fulfilling our mission: to provide Connecticut electricity consumers with access to the lowest electricity prices available."

--- Wattifi statement

Wattifi on its website states that it, "lowers your electricity bill with game-changing technology and access to the wholesale electricity market" (further discussed below)

In its letter to Wattifi, PURA stated, "On November 18, 2019, the Public Utilities Regulatory Authority (Authority) contacted Wattifi, Inc. (Wattifi) regarding a complaint received by the Authority’s Consumer Affairs Unit (CAU). In response to the CAU complaint, Wattifi indicated that the complainant became a customer as part of the Wattifi 'Friends and Family' plan and therefore did not have a contract with Wattifi."

In its letter to Wattifi, PURA stated, "As of the most recent electric distribution company filings in Docket No. 06-10-22, PURA Monitoring the State of Competition in the Electric Industry, Wattifi has 140 customers (92 with Eversource, 48 with UI). See Compliance Filings dated November 11 and 14, 2019. Pursuant to Conn. Gen. Stat. § 16-245o(f)(2), a supplier shall not provide electric generation services unless the customer has signed a contract or consents to such service by: 1) an independent third-party verification; 2) receipt of written confirmation by mail from the customer after the customer has received an information package confirming any telephone agreement; 3) the customer consents through electronic means, such as a computer transaction. The statute further requires a supplier to maintain records of any signed contract or consent to service for at least two years. By noon on Friday, December 6, 2019, Wattifi must provide documentation to the Authority of: a) contracts or consents from the current 140 customers; and b) the written notices given to those customers pursuant to Conn. Gen Stat. § 16-245o(f)(2) prior to the initiation of electric generation supply."

In its letter to Wattifi, PURA stated, "In response to the CAU complaint, Wattifi submitted residential customer bills. These bills indicate that Wattifi has billed this residential customer a variable rate. The Authority is concerned that Wattifi may be currently billing other residential customers under variable rates. As Wattifi acknowledged in its Response to RA-11, 'Connecticut law prohibits residential supply prices from changing in less than 4 months.' Whether or not Wattifi’s model currently is operational, Wattifi must abide by Connecticut law and cannot charge variable rates to residential customers. See Conn. Gen. Stat. § 16-245o(g)(4). Wattifi must immediately cease charging customers variable rates and must demonstrate to the Authority that it has a model of pricing in place that charges a customer the same fixed rate for at least four months by noon on Friday, December 6, 2019."

In its letter to Wattifi, PURA stated, "The Authority also noted that the Supply Summary is not displayed on the residential customer bills provided by Wattifi. As the Authority held in its Decision in Docket No. 14-07-19RE01, 'Conn. Gen. Stat. § 16 245d(a)(2) requires placement of the Summary Information on the first page of 'each bill for each residential customer receiving generation service from an electric supplier' and does not limit this requirement to bills rendered by the EDCs. The Authority thus concludes that licensed suppliers are required to provide the Summary Information on the first page of electric bills for residential accounts that are receiving Direct Bills.' Decision dated July 24, 2015, p. 4. Wattifi must immediately revise its bills to include the Supply Summary information and demonstrate to the Authority that it has revised such bills by noon on Monday, January 6, 2020."

In its letter to Wattifi, PURA stated, "Review of the residential bills submitted by Wattifi demonstrate that they do not display an all-inclusive rate to allow a customer to easily determine the rate per kWh he is paying. The Authority has held that suppliers must 'use the all-in cost of generation when providing customer facing generation-related information and rates.' Decision dated November 5, 2014, Docket No. 13-07-18, p. 6. As part of Wattifi’s revision of its bills ordered above, Wattifi must revise its bills to display an all-inclusive rate. Display of an all-inclusive rate does not preclude Wattifi from providing a breakdown of individual rate components on the bill, but the customer must be able to readily identify the all-inclusive rate paid during any bill cycle."

In its letter to Wattifi, PURA stated, "Wattifi further stated in its response to the CAU complaint that its website indicates that its real-time rate model is not currently available and states, 'Soon you can get direct access to wholesale prices...' The Authority has reviewed the website and disagrees that a customer would understand if she signs up now she will not receive the real-time rate model. The 'Soon you can get direct access…' language is overshadowed by large letters stating 'Wattifi is now available in Connecticut,' with a link to information about Connecticut that does not indicate the real-time model currently is not available ... The Authority instructs Wattifi to modify its website to reflect that its real-time rate model is not currently in place and customers cannot gain direct access to wholesale market prices at this time. Wattifi must demonstrate to the Authority by noon on Friday, December 6, 2019 that its website has been modified accordingly."

In its letter to Wattifi, PURA stated, "The Authority further instructs Wattifi to remove the vanity identification 'pura' from the following Universal Resource Locator (URL), https://www.wattifi.com/pura and from the label on the tab at the top of the browser ... Inclusion of the Authority’s name within any supplier’s URL implies that the supplier is affiliated with a government agency, in direct contravention of Conn. Gen. Stat. § 16-245o(h)(4). Wattifi must demonstrate to the Authority by noon on Friday, December 6, 2019 that its website has been modified accordingly."

In its letter to Wattifi, PURA stated, "The Authority notes that Wattifi appears to be submitting EDI data to Eversource. However, Wattifi did not file a notice of EDI testing acceptance for Eversource [Wattifi filed an EDI Testing Acceptance with UI on May 31, 2018.]. Furthermore, Wattifi has not submitted an updated bond with the Authority pursuant to its August 14, 2019 letter. The Authority instructs Wattifi to file both of these documents by noon on Friday, December 6, 2019."

In its letter to Wattifi, PURA stated, "Based on the number of concerns cited herein, the Authority instructs Wattifi to cease enrolling new customers until it has resolved the items noted herein to the satisfaction of the Authority. The Authority believes Wattifi would benefit from a Supplier Orientation; therefore, the Authority will conduct an Orientation with Wattifi on December 17, 2019 at 10:30 a.m. The Authority will issue a Notice of Technical Meeting regarding the Orientation under separate cover."

Wattifi on its website states, "There are 3 problems with your electric bill."

Wattifi lists these three problems as:

• "You're overpaying because your supplier charges a premium to deliver a fixed rate."

• "When you're stuck with fixed-price electricity, you have no control over your energy costs because no matter when you use your electricity, your price per kW is the same."

• "Your supplier makes inaccurate assumptions on your energy use because they lack accurate, real-time usage data directly from your home or business."

Wattifi on its website states, "Soon you can get direct access to wholesale prices and your actual electricity consumption using Wattifi Smart Meter Technology and the ability to monitor and modify your usage through the Wattifi app."

Wattifi on a Connecticut-specific page of its website states, "Wattifi is now a licensed electric supplier in Connecticut. Rates as low as 4.45¢/kWh*"

The rate listed above is further explained as follows, on a Connecticut-specific page of Wattifi's website:

Connecticut Average Electricity Costs for April 2018

DALMP CT Zone = $44.56 /Mwh

Per kwh = $ .04456*

* After passed-thru capacity, ancillary charges, taxes and fees, the average Wattifi all-in rate was $.082/kWh[.] Although this is the average price, each hour of each day is a different price. Your actual usage at each hour will determine your price. To see the current ISO-NE Fuel Mix, select the button below.

Wattifi on a Connecticut-specific page of its website states, under "Wattifi’s rates in Connecticut," the following: "Direct access to wholesale market prices and complete transparency is what you can expect from Wattifi. Our price is less because our costs are less. No hidden mark-ups or risk premiums built into fixed prices."

Wattifi on a Connecticut-specific page of its website states, "Wattifi buys energy on behalf of our customer in the 'ISO-NE Day-Ahead Market'. Wattifi purchases green energy credits to ensure a minimum of 25% of your kWh usage is from renewable energy sources. Wattifi will be offering a 100% renewable energy product in the future."

A "standard" residential contract filed by Wattifi in September 2018 (and which therefore may not necessarily reflect its current products) envisioned charging the customer a fixed rate, plus a "Real-Time Rebate"

"Residential customer will be charged monthly the above fixed price consistent with Connecticut State law and will be eligible for a Real-Time Rebate," the 2018 standard contract stated

"The Real-Time Rebate represents net cost savings over a 12 month period the customer can derive based upon their actual energy consumption profile provided by Eversource/United Illuminating’s interval meter and associated interval prices for wholesale electricity generation plus ancillary services and adders, and subject to Utility clearing load in intervals with ISO-NE," the 2018 standard contract stated

"The Real-Time Rebate is driven principally by the customer’s ability to implement modifications to their electricity consumption behavior," the 2018 standard contract stated

Docket No. 17-11-25

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