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Constellation: Utility's Proposed Bill Change, "Threatens Constellation's Relationship With Its Customers"

Constellation Alleges Bill Change Intended To, "Hinder Shopping"

Utility Suggests Suppliers Are Not Complying With "Clear And Understandable" Requirement For Pricing On Bills

Utility: "Reforms" Relating To Unregulated Supplier Charges Should Be Pursued

Utility Encourages Regulations That Would Require "Effective" kWh Rate Or More Granular Comparisons

September 25, 2020

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Copyright 2010-20
Reporting by Paul Ring •

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Constellation NewEnergy, Inc. alleged in comments to the Public Utilities Commission of Ohio that a proposal from AEP Ohio to provide, on the first page on a utility consolidated bill for residential customers, the shadow-billed total supply cost that a shopping customer would have paid had the customer been on the Standard Service Offer, "threatens Constellation's relationship with its customers."

Constellation moved to suspend the automatic approval process for the bill change, and said that PUCO should set a procedural schedule for further consideration of the changes, to the extent the proposal is not rejected outright.

AEP Ohio's proposal to add shadow-billed default service costs prominently on residential utility consolidated bills had been exclusively first reported by in August

Specifically, AEP Ohio's proposed language would state, "The supply portion of your bill using AEP Ohio's Standard Service Offer rate (also known as the Price-to-Compare) of $0.0xx per kWh would have been $xx.xx. Compare with your current supplier charges listed below on this bill for potential savings."

The information would appear near the top right of a customer's bill, under the heading "Notes from AEP Ohio". See a sample bill with the change here (page 4)

Constellation noted that the Price to Compare (without total shadow-billed costs) is already listed on utility bills.

"AEP Ohio is now proposing to go a step further with a second and more direct message intended to hinder shopping and impact the supplier-customer contractual relationship," Constellation alleged

"Put otherwise, AEP Ohio wants authority to instruct shopping customers to reconsider their shopping decision," Constellation alleged

"The proposed message inappropriately interjects AEP Ohio into the residential customer's shopping decision, and interferes with the contractual relationship that customers have with Constellation or another CRES provider," Constellation alleged

"Ohio law does not permit AEP Ohio to use its monopoly position to include bill messages that interfere with and discriminate against the shopping customer's decision, and to use its market power as the electric distribution company to encourage customers to select the SSO. R.C. 4928.03 established from the start of the CRES market in Ohio, that CRES providers 'shall have comparable and nondiscriminatory access to noncompetitive retail electric services of an electric utility,' which includes the customer bills. Approval of AEP Ohio's bill message that points the shopping customers to the SSO through a 'higher profile' bill message violates the prohibition against the nondiscriminatory billing," Constellation alleged

"AEP Ohio's proposed message is also potentially misleading. As the Northeast Ohio Public Energy Council noted in its Motion to Intervene, AEP Ohio's message indicates that customers could realize 'potential savings' based on a comparison to the current month's PTC. But the PTC is not an apples-to-apples comparison to all competitive market offerings. The PTC typically fluctuates throughout the year, while some customers are in fixed-price contracts that can be more favorable than the PTC over the term of the fixed-price contract. Other customers are on introductory or month-to-month contracts that cannot be accurately compared with the PTC by considering only a one-month snapshot. And nowhere does the message explain that the PTC can fluctuate at a later date and result in higher costs over the long term versus shopping with a CRES provider. Simply put, the message's promise of 'potential savings' will confuse and mislead shopping customers. And in focusing on price alone, AEP Ohio's proposed message discounts other benefits that customers may receive from their CRES provider, such as having generation sourced from renewable resources. Regardless that AEP Ohio's bill format today contains a general PTC message on page 3 of the bill, AEP Ohio's attempt to include a second message with specific language intended to promote the SSO over shopping should be rejected," Constellation alleged

"AEP's proposed message is not only inappropriate in its content, but also in its timing and its prominence on the bill page. For one, AEP Ohio proposes to permanently include this message every month, thereby repeatedly questioning the customer's decision to shop with a CRES provider. And AEP Ohio seeks to place this message at the top of the first page of the bill, immediately below the bill amount information, and under the heading 'Notes from AEP Ohio.' Its placement at the beginning of the bill suggests obvious importance. AEP Ohio admits as much, stating in its application that the message is a 'higher profile message.' Application at 1. Indeed, this is the same position that AEP Ohio used recently to notify customers about the utility resuming electric service disconnections," Constellation alleged

NOPEC previously filed a motion to suspend the automatic approval process

AEP Ohio filed a response to NOPEC's motion

AEP Ohio stated, "the Company is only proposing a small incremental change even though additional reforms are needed in the minimal regulations that apply to CRES pricing and disclosures ... This higher profile message will help ensure that residential customers see and understand their options for shopping or not shopping."

"This simple bill message would show the total price that the customer would pay using the SSO for the actual usage and same billing period. That is accurate and useful information for a shopping customer; the calculation is essentially another form of the PTC that simply incorporates the customer's usage. As with the PTC and the Commission's own apples-to-apples website, it is still up to the customer to compare that PTC with their supplier charges. But until such time that the Commission clarifies such matters through regulatory requirements imposed on CRES providers (which AEP Ohio would encourage), the Company lacks the ability to provide additional help to residential customers in this regard by providing a more granular or specific bill comparison or disclose the 'effective kWh rate' being paid by the customer through supplier charges that are often complex and opaque. Nonetheless, even the Company's simple PTC bill message is being opposed," AEP Ohio said

AEP Ohio alleged, "NOPEC's real issue is the PTC, not AEP Ohio's simple enhancement of it. Of course, the PTC is a Commission-sanctioned tool to assist residential customers with their shopping decisions."

"In any case, the reason customers may not be able to make an apples-to-apples comparison between the SSO and supplier offers is the complexity and opacity of unregulated supplier rates and charges, not the SSO rate structure, the PTC or the bill message proposed by AEP Ohio in this proceeding," AEP Ohio said

AEP Ohio said that all of NOPEC's arguments against the total SSO cost statement are equally applicable to the PTC which has already been approved by the Commission

"First, NOPEC points out that a supplier contract may extend fixed rates while the SSO may change quarterly. This criticism is equally applicable to using the PTC and is yet another form of challenging the well-established use of the PTC. It is the supplier's job to market to non-shopping customers and explain why their rates or rate structure is better than the SSO. AEP Ohio's PTC calculation proposal is no different from the PTC itself in this regard; calculating that a 1,000 kWh residential customer will pay $45 for SSO service when the PTC is 4.5 cents/kWh is no more misleading than referencing the PTC itself," AEP Ohio said

"Second, NOPEC argues that the PTC calculation does not account for 100% renewable power costs or non-commodity products or services. Again, the same is true for the PTC and again it is the supplier's job to market green power and explain why the price premium exists because the customer is getting a different product. If a non-commodity product or service is being sold to the customer, is it not fair to assume that the CRES will inform the customer and include a separate charge or explanation of the product or service? Regardless, as reflected in Ex. A to the Company's Application in this case, the customer is merely advised to 'compare with your current supplier charges listed below on this bill for potential savings.' Just like the PTC, the proposed message does not say how to compare or address whether the customer may be purchasing additional products or different products – only that they have the information to use for a comparison," AEP Ohio said

"Finally, NOPEC argues that the proposed bill message should not be used '[u]nless it is clear that AEP Ohio's customers will recognize 'savings' from switching to the SSO...' In other words, only if AEP Ohio definitively determines that the customer will save should the Company provide the PTC calculation. Of course, the proposed message refers to 'potential savings' (not 'savings') and merely advises the customer to compare, not to switch. Moreover, NOPEC's response is a 'trick answer' because on the very same page (NOPEC Memo at 3) it agrees with AEP Ohio's statement that 'it is not possible to determine in all cases what the suppliers effective charge is for commodity services in order to make an 'apples-to-apples' comparison with the PTC.' Yet, that is what the shopping residential customer must do," AEP Ohio said

"Frankly, it is ironic that NOPEC cites OAC 4901:1-10-33(F)'s requirement that consolidated bills be accurate and contain clear and understandable language. The barrier to clear and understandable information for consumers is not the Company's straightforward PTC proposal; rather, it is the lack of transparency that is often embedded in supplier charges and the use of rate structures and charges that, at times, actually appear to be designed with the express goal of making it difficult to compare with the Commission-sanctioned PTC. So, the variable that would improve the ease and accuracy for customers to make a comparison with the PTC is if suppliers would provide additional or different information to enable the PTC comparison," AEP Ohio said

"Absent a method to calculate effective kWh rates, fully accurate comparisons cannot be made by all customers when suppliers compete with the SSO by offering rates for commodity service that include kWh rates plus monthly service charges, daily non-commodity charges, administrative fees, separate capacity charges, loss charges, ancillary charges, etc. The SSO pricing structure and PTC are approved and fully regulated by the Commission, as are the details of bill formatting and presentation (as evidenced by this case). So if anyone is violating OAC 4901:1-10-33(F)'s requirement that consolidated bills be accurate and contain clear and understandable language, it is suppliers, not AEP Ohio," AEP Ohio said

Finally, AEP Ohio stated that, "AEP Ohio did not initiate this docket to address or reform the many consumer issues unregulated supplier charges – though it agrees such measures should be pursued."

Case No. 20-1408-EL-UNC

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