Regulator Provisionally Orders Earlier Utility Provision Of Sync Lists Of Hardship Customers, Who May No Longer Be Served, To Retail Suppliers

Regulator Denies Reconsideration Of Decision Requiring That All Hardship Customers Shall Be Returned To Default Service

January 17, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA denied reconsideration of its previously reported decision which requires all hardship electricity customers to be returned to Standard Service no later than July 1, 2020, including those on existing contracts with retail suppliers, but did provisionally modify a schedule concerning the provision of sync lists

Under PURA's order, which had been first reported by EnergyChoiceMatters.com, EDCs shall implement system programming to prevent hardship customers from enrolling with an electric supplier. See more details on the order in our prior story here

PURA denied a motion for reconsideration from Direct Energy, finding that Direct's arguments either had already been raised and considered in the order, or otherwise lacked merit

PURA noted that, in its Decision, the Authority found: from October 2016 through September 2018 hardship customers paid $7.2 million more during that time period than they would have if they had purchased electricity through standard service; seventy-eight percent (78%) of hardship customers receiving service from an electric supplier paid more than they would have on standard service; during the time period in question hardship customers contracting with a supplier paid sixty-nine percent (69%) more than non-hardship customers contracting with a supplier; and hardship customers receiving supply from third-party suppliers during the period studied on average paid $143 more than they would have paid for standard service during that period.

In denying reconsideration, PURA stated, "In its Motion, Direct argues the means chosen to implement the Decision were not reasonable and necessary because there was no emergency need to place all hardship customers on standard service immediately. Motion, p. 2. The Authority disagrees. The Authority analyzed the two most recent years’ of data available at the time this docket began. As the Authority explained in its Decision, there is no reason to believe the data analyzed is an anomaly or that an analysis of 2019 data would produce any different result. Decision, p. 8. The emergency exists due to the suppliers’ own actions. Suppliers choose the rates they charge customers. Had they not overcharged hardship customers for the two years’ of data available to analyze, there would have been no need to return hardship customers to standard service at all. However, because of hardship customers’ overpayment to electric suppliers, there is now an immediate need to stop the overpayment as soon as possible, as detailed in the Decision."

PURA further said, "Direct argues the Authority’s reasonable option was to let existing contracts expire. Direct consistently fails to address that supplier contracts contain automatic renewal clauses. See e.g., Conn. Gen. Stat. § 16-245o(g)(1) (permitting automatic renewals in supplier contracts); Tr. July 17, 2019, p. 276-84 (discussing renewal of supplier contracts); Tr. July 17, 2019, p. 322, 324-25 (RESA expert stating that a customer affirmatively elects to participate in the renewal terms and conditions when she agrees to the terms and conditions that provide for automatic renewal); Pre-filed Testimony of RESA, p. 42 (acknowledging that suppliers renew contracts). It is disingenuous for Direct to represent that those contracts would 'expire in a timely manner,' as the automatic renewal clauses ensure the contracts never expire. If the Authority did not terminate the existing contracts and return all hardship customers to standard service, hardship customers currently charged excessive supplier rates would continue being billed at those rates indefinitely, until the customer took an affirmative action to terminate the contract. Allowing certain hardship customers to continue to be charged excessive rates undermines the purpose of the statute."

PURA stated, "Furthermore, as the Authority noted in its Decision, the Parties offered no legal argument for the proposition that preventing a contract from automatically renewing constitutes any lesser interference with a contract under the Contracts Clause of the United States Constitution than terminating the contract immediately. Decision, p. 13. Direct again does not address this issue in its Motion. The continued silence from suppliers on this issue indicates their plan for ensuring Conn. Gen. Stat. § 16-245o(m) can never be implemented -- suppliers will claim a Contracts Clause violation whether the Authority terminates contracts now or declines to let contracts automatically renew later, and if the Authority allows the contracts to expire then suppliers will continue overcharging hardship customers under existing contracts that renew indefinitely."

PURA stated, "Direct recycles arguments that it raised in the underlying docket regarding alternatives, namely that 'The Authority could order that Hardship customers be placed on a separate tariff, or that Hardship customers be allowed to shop for products that are guaranteed to be lower than EDC Standard Service.' The Authority specifically sought briefs on other options available under the statute. No supplier party offered any other option and the OCC correctly argued that the alternatives proposed were beyond the scope of the statute."

PURA stated, "As the Authority clearly articulated in its Decision, the harm caused by suppliers to hardship customers, and therefore to all ratepayers subsidizing hardship customers, is prevalent and ongoing. It must be addressed immediately to ensure Connecticut residents do not continue to support hardship customers overpaying electrical suppliers. Because of the inclusion of automatic renewal clauses in supplier contracts, the Authority must terminate the contracts at this time to ensure the purpose of the statute is achieved. Otherwise, hardship customers will linger with suppliers indefinitely and Connecticut residents will never see the benefits of the Decision. The Authority found in its Decision, and continues to find, that allowing hardship customers to remain in their contracts with electric suppliers harms the hardship customers and all Connecticut ratepayers. As a result, the Authority’s orders in the Decision stand. By July 1, 2020, the EDCs shall return all customers coded as hardship in their billing systems to standard service and prevent future hardship customers from enrolling with a third-party electric supplier."

However, PURA said that, although the Parties presented no evidence that a customer would not know or disclose their hardship status, the Authority heard from suppliers that they preferred the EDCs send them sync lists containing hardship customers. "To diminish the number of marketing calls to customers that are unable to contract with a supplier, the Authority will order the EDCs to provide sync lists to suppliers a minimum of annually, or as often as the suppliers and EDCs agree after the meeting discussed below. Once determined, the EDCs shall submit a compliance filing indicating the method and frequency determined for provision of sync lists and indicating that the EDCs have entered into appropriate non-disclosure agreements with the suppliers and, if necessary, suppliers’ third-party vendors, regarding the exchange of such information," PURA said

Concerning sync lists, PURA in its decision said that The Authority found that the most efficient method for suppliers to implement the decision is to ask customers at the beginning of the marketing transaction if that customer has a designated hardship status.

PURA specifically said, "As the Authority has articulated herein, it envisioned implementation would involve a process whereby the EDCs performed the necessary IT upgrades to both return hardship customers to standard service and prevent them from being enrolled with a supplier in the future, and the EDCs would notify hardship customers of this change. Although the Authority does not share the suppliers’ concerns regarding difficulty with implementation, it recognizes the importance of effective communication regarding the implementation. To facilitate the implementation of this Decision’s Orders the Authority will order the EDCs and suppliers to meet by May 15, 2020 for the sole purposes of allowing the EDCs to provide an update to the suppliers regarding the status of implementation and notification and to determine the frequency of the provision of sync lists containing hardship customers."

PURA's decision ordered that, no later than May 15, 2020, The Connecticut Light & Power Company d/b/a Eversource Energy and The United Illuminating Company shall meet with all suppliers to determine the method and timing of providing sync lists to suppliers indicating hardship customers and to discuss the status of implementation.

PURA's decision ordered that, no later than June 1 2020, The Connecticut Light & Power Company d/b/a Eversource Energy and The United Illuminating Company shall submit a compliance filing indicating the method and frequency determined for sync lists and indicating that the EDCs have entered into appropriate non-disclosure agreements with the suppliers regarding the exchange of such information.

Town Square Energy raised certain concerns with the sync list provisions

According to PURA, "In its Letter, Town Square requests the Authority also reconsider the time frame of the meeting ordered between the EDCs and suppliers during which the EDCs would provide sync lists. Letter, p. 2. Town Square argues that delaying the meeting to May does not offer suppliers sufficient time to identify hardship customers and mitigate losses."

In addressing the letter, PURA said, "Town Square misunderstands the purpose of the sync lists. The sync lists are a tool to assist suppliers in avoiding marketing to and contracting with hardship customers, not a prerequisite to the requirement that they not market to and contract with hardship customers. As the Authority explained in its Decision, suppliers should immediately begin inquiring during marketing if the customer has hardship customer status. If the answer is affirmative, the supplier is on notice that it should not enter into a contract with the customer that lasts beyond July 1, 2020, as all hardship customers will be returned to standard service as of that date and the EDCs will block enrollment of hardship customers with electric suppliers after that date."

PURA further said, "The Authority cannot allow the release of hardship customer identification to suppliers until suppliers are in the process of implementing the Decision. Conn. Gen. Stat. § 4-183 allows parties forty-five days after a ruling on a motion for reconsideration to appeal a final decision. To ensure suppliers do not access lists of hardship customers that they may then use for marketing purposes pending an appeal, the Authority must allow the forty-five day window to pass before requiring the EDCs and suppliers to meet to exchange customer-specific information. In the intervening time, to assist suppliers in planning for mitigation, the EDCs may inform suppliers of the numbers of hardship customers each has."

As such, PURA ordered an earlier meeting concerning sync lists, provided that no appeal has been filed

Specifically, the Authority revised Decision Order No. 5 as follows: "No later than January 31 2020, The Connecticut Light and Power Company d/b/a Eversource Energy and The United Illuminating Company shall provide each supplier with the number of hardship customers the supplier serves. If no Party has appealed this Decision by March 2, 2020, then no later than March 9, 2020, The Connecticut Light and Power Company d/b/a Eversource Energy and The United Illuminating Company also shall meet with all electric suppliers to determine a process to enter into confidentiality agreements, determine a process to provide an initial sync list to each supplier indicating the supplier’s current hardship customers, and to determine the method and timing of future sync lists indicating hardship customers. If not possible to enter into confidentiality agreements and provide sync lists during the initial meeting, confidentiality agreements shall be implemented by and initial sync lists shall be provided to suppliers no later than March 16, 2020. If a Party appeals this Decision, then the EDCs shall not be required to meet with the suppliers or provide sync lists during the pendency of the appeal."

Docket No. 18-06-02

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