Texas PUC Chair Proposes Changes To REP Reimbursement, Electricity Relief Program

Addresses Start Date For Invoices Eligible For Reimbursement

Walker Proposes Shorter Duration For ERP, Subject To Future Extension

Also Proposes Change To Late Fee Exception

April 16, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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In a memo in advance of tomorrow's open meeting, Texas PUC Chairman DeAnn T. Walker has proposed changes to the Electricity Relief Program, which provides certain reimbursements to retail electric providers for customers who cannot be disconnected for non-payment

See background on the Electricity Relief Program here

In brief, REPs will be reimbursed for energy charges at a rate of $0.04/kWh for customers in the program, and delivery charges (except securitization charges) will not be charged to REPs

Walker's proposed changes note that the ERP became effective on March 26, 2020

As such, Walker proposes that the ERP, "is applicable to invoices received from the transmission and distribution utility (TDU) by the Retail Electric Provider (REP) and electric bills issued to eligible residential customers after that date."

The ERP, "does not apply to invoices or electric bills received prior to the effective date of the program," Walker proposes

Walker further proposes that, "The COVID-19 Electricity Relief Program financial assistance is forward-looking and will begin for each customer at the time that the customer would otherwise be subject to disconnection for non-payment, absent the Program. To provide for consistent implementation, when a REP submits a request to suppress TDU charges, the TDU will reissue the most recent TDU invoice with the charges suppressed. Only one invoice may be reissued. Following the suppression request, future TDU invoices to the REP will have delivery charges suppressed."

Walker proposes that, "REPs must contact residential customers to attempt to place the customer on deferred payment plans before submitting any claims for financial assistance from the program."

Walker noted that the Commission has issued an order under 16 Texas Administrative Code (TAC) §§ 25.480(j)(l)(B) and 25.498(i)(1)(B) requiring REPs to offer deferred payment plans to customers who have experienced financial hardship due to COVID-19. As provided by those rules, REPs may implement switch-holds for customers who enter into a deferred payment plan.

"When a customer contacts a REP and indicates an inability to pay a bill, or to make a deferred payment plan installment, the REP will inform the customer of the COVID-19 Electricity Relief Program and will provide instructions for the customer to contact the Low-Income List Administrator (LILA) to self-enroll if the customer is experiencing unemployment due to the impacts of COVID-19," Walker proposed

Walker proposes that, "A REP must make meaningful attempts to offer the customer a deferred payment plan. A meaningful attempt to offer a customer a deferred payment plan does not include mass electronic communications to the REP's customers. A REP must demonstrate that it has made these customer specific attempts prior to qualifying the customer to receive financial assistance."

"If a customer enters into a deferred payment plan, the REP must allow the customer an opportunity to fulfill the terms of the plan prior to qualifying the customer to receive financial assistance," Walker proposes

As before, financial assistance under the COVID-19 Electricity Relief Program is a single benefit that consists of two components: (1) the suppression of delivery charges by the TDU and (2) an energy charge reimbursement of $0.04 per kWh to the REP on behalf of the customer.

Walker proposes a new end date of July 17, 2020 for the program

"The COVID-19 Electricity Relief Program, including the suspension of disconnections for non-payment and addition of eligible residential customers to the COVID-19 Electricity Relief Program, will end on July 17, 2020, unless extended by the Commission. The COVID-19 Electricity Relief Program may be extended for an additional period if, after a reassessment of the COVID-19 Electricity Relief Program, the Commission determines that the need for the program continues to exist," Walker proposed

Walker proposed that the TDUs' riders will remain in place and reimbursements to the TDUs and REPs will continue after the COVID-19 Electricity Relief Program has ended to complete any remaining COVID-19 Electricity Relief Program cost recovery and to disburse all reimbursement amounts or remaining balances.

Under Walker's proposal, final claims for reimbursement must be submitted to TDUs not later than 90 days after the end of the COVID-19 Electricity Relief Program.

"For any amounts recovered under the [funding] rider that remain after the end of the COVID-19 Electricity Relief Program, the TDUs will issue a refund through REPs to end-use customers in the same manner the rider was charged. REPs must pass through any monies refunded to customers," Walker proposes

Concerning REP reimbursements, Walker proposes a requirement that, "Concurrent with each request for energy charge reimbursement, a REP must file with the Commission a sworn statement from an executive officer of the REP attesting to the accuracy, in all material respects, of the information provided to the TDU in the requests for delivery charges to be suppressed and energy charge reimbursements. The Commission may request additional reporting from REPs during the program."

Under Walker's proposal, REPs must reflect reimbursement sought through the COVID-19 Electricity Relief Program on the affected customer's account and cease to seek continued collection where funds are received from the program during the pendency of the program.

"REPs are allowed to recover the remaining balances from the qualified residential customer after the cessation of the program," Walker proposes

Under the proposed changes to the ERP, the Commission waives all relevant deadlines within its rules related to required changes to the REP's Terms of Service, Prepaid Disclosure Statement, and Electricity Facts Labels contract documents relevant to the COVID-19 Electricity Relief Program.

See Walker's full revised proposal for the ERP here

Late Fee Changes

Walker proposed that a prior exception applying to the rule that otherwise allows REPs to charge late fees to residential customers should end on May 15, 2020. "I believe that the Commission should set an end date for the exceptions to the rules to provide certainty," Walker said. If the Commission needs to extend that date, then it can do so at the open meeting on May 14, 2020, Walker said

In a separate memo, Commissioner Shelly Botkin said concerning late fees, "I would like to discuss the application of late fees for customers not in the ERP. This modification would result in a more focused waiver of the Commission’s rules and would be in keeping with the policy goal that those who can pay their bills should continue to do so on a timely basis."

REP Concerns

The revised ERP proposal follows REP concerns, noted in the story below

Texas Retail Providers Seek To Include Past Due Balances Since Start Of Disconnection Moratorium In ERP Reimbursement Program

Seek Extended Time To Receive Reimbursement, After Close Of Program, For Deferred Payment Plan Customers

REP Seeks Ability To Place Switch Hold On ERP Customer, Even If Customer Does Not Enter DPP

REP Seeks Earlier End To ERP, DNP Moratorium

Texas retail electric providers have sought to include, as eligible for reimbursement under the PUC's Electricity Relief Program (ERP), past due amounts accrued since the disconnection for non-pay moratorium began

See background on the Electricity Relief Program here

In brief, REPs will be reimbursed for energy charges at a rate of $0.04/kWh for customers in the program, and delivery charges (except securitization charges) will not be charged to REPs

As previously reported, the PUC has said that the reimbursement process shall begin April 20, 2020. As currently contemplated, compensation for prior energy charges would not be included.

In comments filed on April 13, the Alliance for Retail Markets said the reimbursements should be provided as of an earlier start date, such as March 17

ARM in such comments said, "However, the proposals filed by the Joint TDUs in this project would limit the reimbursement period to only after the date of delivery charge cessation, or possibly one invoice prior to the cessation date. ARM understands the need to have a defined period for which reimbursement requests will be accepted for the COVID-19 ERP to be functional and operational. A natural limit to the reimbursement date could be March 17, 2020, which is the date that the TDUs in ERCOT instituted their system wide disconnection moratorium. Both the proxy energy charge of $0.04 per kilowatt hour ('kWh') and associated delivery charges should be eligible for reimbursement beginning on that date."

ARM further said in such April 13 comments, "Under the Joint TDUs' proposed implementation, eligible customers (and REPs) are effectively penalized if they enter into a DPP with REPs and REPs are penalized if they offer DPP terms that are more generous than minimum terms required by the Commission's rules (i.e., downpayment less than 50% of the amount due, more than five installments) because the REP would only be allowed to submit a request for reimbursement of proxy energy charges for invoices following the delivery charge cessation date. The Joint TDUs' proposed implementation of the reimbursement period is inconsistent with the words of the Commission's order that specifies that the COVID-19 ERP will help to reimburse unpaid, past-due balances, and that REPs will have at least 90 days after the COVID-19 ERP ends to submit reimbursement claims. As a practical matter, it also would create untenable tension between the Commission's policy objectives for the COVID-19 ERP (i.e., financial relief on unpaid bills and encouragement to enter into DPPs)."

Although a workshop was held subsequent to ARM's comments, Pulse Power, in separate and newly filed comments, indicated that there has been no change in effective start date for reimbursements

"According to the latest TDU conference call, retailers will have no opportunity to recoup their cost of power or their continuing payments to the TDUs for the periods before the customer enrolls in the ERP (energy charges) or before April 20 (TDUs)," Pulse said

The end date for the energy charge reimbursement is also a concern for REPs

REPs noted that REPs are being encouraged to work with customers on deferred payment plans. However, the nature of a DPP means that any ultimate past due payments and disconnection notice (which would trigger eligibility for reimbursement) may not come into the future -- beyond a proposed hard end date for the ERP

"If a REP and customer agree to a DPP, then multiple months may pass before a customer becomes past-due and subject to disconnection for non-payment," ARM said on April 13

"ARM maintains that a REP's proxy energy charge reimbursement request should also be subject to that starting date but not be tied to the delivery charge suppression date as proposed by the Joint TDUs,' ARM said on April 13

Separately, Pulse Power requested that the Commission issue an order that retailers may place switch holds on their customers that qualify for the ERP. "For any customer who has their disconnection prevented by the ERP, the retailer should be able to place a switch-hold on the account — irrespective of the customer agreeing to a DPP. This is to ensure the recovery of the balance owed to the REP upon termination of the program. Customers currently have zero incentive to enter into a DPP and have every incentive to switch providers without paying their balance at the conclusion of the program," Pulse said

"As it stands now, fewer than 4% of Pulse's ERP customers have agreed to a DPP, although all have been offered multiple times. If the Commission thinks it necessary, a requirement could be added that the retailer offer a DPP to the customer again at the expiration of the ERP to lessen the impact of the accumulated balance that will be owed," Pulse said

"It is important to note that the vast majority of customers being enrolled now in the ERP already have significant unpaid past-due balances. According to the latest TDU conference call, retailers will have no opportunity to recoup their cost of power or their continuing payments to the TDUs for the periods before the customer enrolls in the ERP (energy charges) or before April 20 (TDUs). Even then, the retailer is not able to obtain full recovery or subsequent energy charges unless their energy charge is less than $0.04. Allowing switch holds to be placed on customers in the ERP program -- whether or not they enter into a DPP -- would substantially mitigate the financial harm to the retailers without imposing unfair or unjust burdens on customers," Pulse said

Pulse said that with federal stimulus money now reaching Texas, the ERP has served its purpose

"Meanwhile, the ERP imposes a significant burden on the people of Texas. The total cost of the ERP has been estimated to be as high as $400 million. This additional tax is being applied across all customer classes and will create additional economic hardship on businesses coping with the economic downturn as well as residential customers that may be impacted but may not qualify for ERP," Pulse said

"From the retailers' perspective, the administration of this program is a logistical, operational, and economic nightmare. As previously predicted, the manual requirements for the administration of this program (both DPP extensions and ERP) are dramatically increasing the cost to serve customers in general and will inevitably lead to errors. Customers are mistakenly thinking that all DNPs are suspended, so they are ignoring disconnect notices, even secondary notices that Pulse has recently implemented. This actually results in more DNPs, not fewer. Aside from increased work on its salaried staff, Pulse has had to double its customer service staff to be able to respond to the significant increase in the number of customer inquiries since the ERP was announced," Pulse said

"The program should end much earlier than the original 6-month term. Discussions are already underway to reopen Texas businesses. The Commission always intended this program to be a temporary help to eligible customers. That time has passed — other programs are now delivering funds to affected Texans — and certainly one intended use of these funds is the payment of basic necessities such as utility bills. Pulse recommends ending new enrollments into the program on May 1, 2020 and removing existing enrollees on June 1, 2020," Pulse said

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