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OCC Seeks To Require Written Authorization For Default Service Customers To Elect Optional Time Of Use Utility Supply Rate

Recommends Bill Guarantee For Non-Shopping TOU Rate Customers

February 24, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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The Ohio Consumers' Counsel has recommended that the FirstEnergy Ohio utilities be required to obtain written customer authorization for customers to be placed on an optional Time of Use generation rate

As previously reported by, FirstEnergy Ohio utilities (The Cleveland Electric Illuminating Company, Ohio Edison Company, and The Toledo Edison Company) have filed at the Public Utilities Commission of Ohio to revise the Generation Service Rider (Rider GEN) to add a time-varying rate offering for non-shopping customers. See our prior story here for more details

OCC specifically recommended that the TOU tariff should explicitly state, "No residential customer shall be enrolled in the Time-o- Day [sic] Option unless the customer affirmatively elects such option in writing following full disclosure, in clear, plain English, or all terms and conditions. A customer may terminate its participation in this time-of-day option at any time, including in the middle of a billing cycle, without incurring any penalty."

OCC suggested that the utility TOU supply rate be marketed to customers as follows: "When a customer receives an advanced meter under FirstEnergy’s grid modernization plan, the customer should be informed about the availability of the Residential Time-of-Use Rates. The utility should provide full disclosure, in writing, in clear, plain English, of all terms and conditions of the Residential Time-of-Use Rates. The PUCO should approve the language to be provided in this disclosure, following input from stakeholders. The customer should be informed that he or she can terminate participation in the program at any time, including in the middle of a billing cycle, without paying any penalty (i.e., the utility shall not charge, for example, a $5 fee for canceling). And before a customer is enrolled in the proposed Residential Time-of-Use Rates, the utility should receive written confirmation from the customer that they have received, reviewed, and understand the information provided by the utility regarding the time-of-use rates."

OCC also recommended that, "To build customer confidence in the adoption of time-of-use rates, customers should be protected from excessive bill increases resulting from participation in the Residential Time-of-Use Rates."

"For the first year of participation, customers should be guaranteed to pay no more than they would have paid under the standard SSO rates. Customers exceeding the rate cap for this one-year period should be provided a monthly bill comparison showing the charges they would have paid without the rate ceiling," OCC said

"Providing limited-in-duration bill limitation guarantees adequately balances several goals of time-of-use rates. It allows for a transition period as customers learn about how the rates work and how they impact bills. It allows customers to obtain real life data about how their own usage patterns contribute to higher or lower rates. It prevents rate shock if customers sign up for time-or- use [sic] rates and would otherwise pay much higher bills. And it preserves consumer autonomy (a foundational aspect of competitive markets) by requiring consumers to live with the consequences of their choices, following the initial six-month trial period," OCC said

OCC also said that customers participating in the Residential Time-of-Use Rates should receive monthly statements on their bills showing how their actual bill compares to what they would have paid under non-time-of-use SSO rates.

OCC said that, once time-of-use rates begin to be offered by retail suppliers, the PUCO’s apples to apples website should include FirstEnergy’s SSO Residential Time-of-Use Rates so that customers can use that as a point of comparison in evaluating marketer time-of-use offers.

OCC said that it asked FirstEnergy in discovery whether it will collect lost revenues resulting from the Residential TOU Rates (for example, if a customer’s total charges under the Residential TOU Rates are less than they would be under standard rates).

OCC said that, "FirstEnergy responded that these charges would in fact be 'reconciled through the Companies’ Generation Cost Reconciliation Rider.'"

OCC said that, "FirstEnergy’s proposed TOU program is supposedly advancing competitive market supply and demand principles; however time-of-use customers (and all other SSO customers) will guarantee FirstEnergy revenues for lost standard service offer payments resulting from this program[.]"

PUCO Staff recommended approval of Ohio Edison Company’s, The Cleveland Electric Illuminating Company’s, and The Toledo Edison Company’s proposed time-varying rate (TVR) structure for residential customers.

Staff recommended that the Commission direct the EDCs to submit a customer education and marketing plan to Staff for discussion and approval prior to implementation of the TVR structure.

Case No. 20-50-EL-ATA

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