PUC Staff Favor's Utility Proposal To List Amount Of Shadow-Billed Default Service Cost On Shopping Customers' Bill, Prominently On First Page

OCC: Utility Data Shows Residential Customers Paying More By Shopping, Compared To Default Service

November 3, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Staff of the Public Utilities Commission of Ohio filed comments in support of the application of Ohio Power Company (the 'Company' or 'AEP Ohio') for approval of a modified bill format that would provide the shadow-billed total supply cost that a shopping customer would have paid, had the customer been on the Standard Service Offer, on the first page on a utility consolidated bill for residential customers

As exclusively first reported by EnergyChoiceMatters.com, 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).

"Staff recommends approval of the Company's bill format change," Staff said in comments

Note that while Staff's justification for the change discussed below emphasizes the sharing of the Price to Compare (PTC) in a prominent location, the new bill language, as noted above, would go beyond listing a PTC and would also include shadow-billed default service costs. As noted above, Staff recommended approval of AEP Ohio's bill format change, which includes this shadow-billed default service cost.

Staff stated, "Staff supports adding a top-level message displaying the PTC rate to the first page of customer bills. Utility bills are generally designed so that most of the relevant information is on the first page. To this end, the first page of the bill contains the following information: the amount to due to pay, due date for the payment, date of bill, summary of current delivery charge and supplier charge, method of payment permitted, and usage history. The PTC rate information belongs on this first page as well."

"The Company's attempt to further assist customers by bringing the PTC rate onto the first page of the bill is necessary. Customers call the Commission when there is an increase in their total customer bill. Staff has observed that many of those calls are due to an increase in the customer's generation charge (i.e. supplier charge). Regardless if the PTC rate is lower or higher than what the customer is paying, the message will inform customers about the different charges that make up the customer bills. An informed customer is less likely to call with questions and/or complaints about their bill because they will understand how the bill was calculated," Staff said

"Furthermore, the success of the competitive market in Ohio depends on informed and educated customers making informed choices. The success is equally dependent on maintaining the integrity of and consumer confidence in the market," Staff said

"In Ohio, there are two primary educational tools to assist electric customers in deciding whether to choose a CRES provider. The first educational tool is the Commission's Energy Choice Ohio website (see http://energychoice.ohio.gov). The Energy Choice Ohio website is a searchable listing of current CRES offers, categorized by EDU territory. The website provides customers with the essential information for a customer to shop for CRES offers as well as nontraditional terms such as green energy. The second educational tool is the PTC. The PTC is the rate the customer would have paid for generation service if the customer were serviced under the Standard Service Offer rate. An EDU's SSO rate is open to all customers. But without knowing the PTC, reviewing offers on the Energy Choice Ohio website, or on the matrix makes choosing an offer difficult for the consumer. Thus, placing the PTC information in a prominent location on the customer's bill is a significant enhancement to the value of the PTC as an educational tool," Staff said

The Ohio Consumers' Counsel also recommended approval of AEP Ohio's proposal

"AEP proposes an improvement to its bill for customers who buy their electricity from marketers. AEP's improvement would allow the customers to compare their current electricity charges (paid to a marketer) to what they would have paid under AEP's standard service offer ('SSO') for electricity. AEP's proposal is a good protection for Ohio consumers, and we commend AEP for it," OCC said

Citing data provided by AEP Ohio provided on a confidential basis, OCC said that, in aggregate, shopping has been a losing proposition for AEP Ohio residential customers over the past six years on the whole. Because the information was provided to OCC on a confidential basis, OCC said that it could not disclose the specific amounts paid by shopping customers in excess of default service, but said that the data should be made public

The Northeast Ohio Public Energy Council and various retail supplier parties each filed comments in opposition to AEP Ohio's proposals

Concerns raised by NOPEC and retail suppliers, made during motions to intervene and requests for PUCO to suspend an automatic approval process, were previously discussed at length in our prior story here

In brief, the Retail Energy Supply Association said that, "The issue is whether the Commission should allow an electric distribution utility to leverage a noncompetitive retail electric service (billing) to influence consumer decisions about a competitive retail electric service (generation). AEP Ohio seeks approval of a bill message that overtly promotes SSO generation service as a superior product to CRES service. This would constitute an anticompetitive subsidy, and the Commission cannot allow it. AEP Ohio's application should be denied."

The NRG retail suppliers said, "The proposal is an unreasonable use of utility market power by taking advantage of space in its bills to favor one offer over all others and discriminating against shopping."

RESA also said that, "promoting the SSO as a benchmark for 'savings' is false and misleading," noting that, "AEP Ohio does not propose to inform customers that the PTC varies."

"Indeed, in the short time since AEP Ohio filed its Application, the PTC increased nearly 10%, from $0.046/kwh to $0.0505. Put simply, AEP Ohio's messaging falsely suggests that past performance is indicative of future results," RESA said

Likewise, NOPEC said, "A one-month snapshot provides a skewed and inaccurate view of the value of the contract between a customer and supplier. Such a narrow time period fails to account for the long-term price or other benefits customers may reap from their contract with a supplier. The proposed bill message fails to explain that the SSO rate listed for that particular month's service period is not fixed -- it fluctuates throughout the year. Generally, the PTC changes as frequently as quarterly; thus, a one-month snapshot does not account for customers overall savings over a longer period. In fact, customers may pay more under the SSO rate over a longer time period than if they had shopped with a competitive supplier, including governmental aggregators. The bill message may encourage customers to switch from competitive retail electric service ('CRES') providers and governmental aggregators such as the Northeast Ohio Public Energy Council ('NOPEC') based on this one-month snap shot only. Rather than providing customers with accurate and complete information, the proposed bill message confuses and distorts rate comparisons with AEP-Ohio's SSO rates."

The NRG retail suppliers argued that,"proposing a special message on only the shopping customer bills is another indication that AEP Ohio seeks to interfere with the supplier-customer relationship."

"AEP Ohio has not proposed to provide any message to the non-shopping residential customers. The utility did not suggest that non-shopping residential customers need to receive a special shopping-related message. This too shows that AEP Ohio is targeting the shopping customers and intending to hinder their existing shopping relationships by instructing all residential shopping customers to reconsider their shopping decision," the NRG companies said

Case No. 20-1408-EL-UNC

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