|
|
|
|
|
Texas PUC Staff Formally Propose Rule To Change Definition Of Fixed Rate To Include Ancillary Service Charges
The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com
Staff of the Texas PUC have filed a draft proposal for publication containing proposed rule changes to implement HB 16, which generally bans wholesale energy market index plans to mass market customers, and relevant portions of SB 3. The proposal for publication also includes new customer protection changes not mandated by statute.
Under the rules applicable to residential and small commercial customers, the draft proposal for publication would explicitly add ancillary service charges to the costs that must not vary under a fixed rate product
Specifically, the draft proposal for publication would define "fixed rate product" to mean, "A retail electric product with a term of at least three
months for which the price (including all recurring charges and ancillary
service charges) for each billing period of the contract term is the same
throughout the contract term, except that the price may vary from the disclosed
amount solely to reflect actual changes in TDU charges, changes to the Electric Reliability Council of Texas
(ERCOT) or Texas Regional Entity, Inc. administrative fees charged to loads
or changes resulting from federal, state or local laws that impose new or
modified fees or costs on a REP that are beyond the REP’s control."
The draft proposal for publication would also define the term "price" as including the cost of ancillary services
Specifically, the draft proposal for publication would define "price" as, "The cost for a retail electric product that includes all recurring charges,
including the cost of ancillary services, excluding state and local sales taxes,
and reimbursement for the state miscellaneous gross receipts tax."
The draft proposal for publication would define "Wholesale Indexed Product" to mean, "A retail electric product in which the price a
customer pays for electricity includes a direct pass-through of real-time
settlement point prices determined by the independent organization certified
under the Public Utility Regulatory Act (PURA) §39.151 for the ERCOT
power region."
The draft proposal for publication provides that a REP, aggregator, or broker is prohibited from offering a wholesale
indexed product to a residential or small commercial customer.
Furthermore, the draft proposal for publication provides
that a REP, aggregator, or broker may enroll a residential or small
commercial customer in an indexed product or a product that contains a
separate assessment of ancillary service charges only if the REP,
aggregator, or broker obtains before the customer’s enrollment an Acknowledgement of Risk (AOR), described below.
.
New Signed Acknowledgement of Risk Requirement - Small Customers
The draft proposal for publication requires, for residential and small commercial customers, a new signed Acknowledgement of Risk for any product with a separate assessment of
ancillary service charges, and any indexed product
Specifically, for residential and small commercial customers, the draft proposal for publication provides that, before a residential or small commercial customer’s
enrollment in an indexed product or a product that contains a separate assessment of
ancillary service charges, an aggregator, broker, or retail electric provider must obtain an
Acknowledgement of Risk (AOR), signed by the customer, verifying that the customer accepts the potential price risks
associated with the product, as follows:
(1) for indexed products other than wholesale indexed products the AOR must include
the following statement in clear, boldfaced text: "This is an indexed product. I
understand that if I enroll in this product, the rate I will be charged for electricity
can change for reasons beyond my control. These changes may result in
unexpectedly high bills, potentially significantly higher than previous bills, and I
must pay any amount I am properly billed. I understand the risks involved with
this plan. [sic]
(3) [sic] for products that contain a separate assessment of ancillary service charges the
AOR must include the following statement in clear, boldfaced text: "This product
contains a separate assessment of ancillary service charges. I understand that if I
enroll in this product, the rate I will be charged for electricity can change for
reasons beyond my control. These changes may result in unexpectedly high bills,
potentially significantly higher than previous bills, and I must pay any amount I
am properly billed. I understand the risks involved with this plan."
New Signed Acknowledgement of Risk Requirement - Large Customers
The draft proposal for publication requires, for large customers, a new signed Acknowledgement of Risk for any product with a separate assessment of
ancillary service charges, and also Wholesale Indexed Products. Unlike for small customers, an AOR is not required to serve large customers on an indexed product that is not a Wholesale Indexed Product
Specifically, for large customers, the draft proposal for publication provides that, before a customer other than a residential or small
commercial customer is enrolled in a wholesale indexed product, or a product that contains
a separate assessment of ancillary service charges, an aggregator, broker, or REP must
obtain an AOR, signed by the customer, verifying that the customer accepts the potential
price risks associated with the product, as follows:
(1) For Wholesale Indexed Products, the AOR must include the following statement
in clear, boldfaced text: "I understand that the volatility and fluctuation of
wholesale energy pricing may cause my energy bill to be multiple 1 times higher in
a month in which wholesale energy prices are high. I understand that I will be
responsible for charges caused by fluctuations in wholesale energy prices."
(2) For products that contain a separate assessment of ancillary service charges the
AOR must include the following statement in clear, boldfaced text: "I understand
that my energy bill may include a separate assessment of ancillary service charges,
which may cause my energy bill to be multiple times higher in a month in which
ancillary services charges are high. I understand that I will be responsible for
charges caused by fluctuations in ancillary service charges."
POLR Pricing
The draft proposal for publication would revise the maximum rate that non-volunteer POLRs (large service providers or LSP) shall charge
The draft would retain the existing formula for such POLR pricing, but would revise the energy charge component of such LSP rate. For brevity, the following discussion focuses solely on the energy charge; other components (e.g. TDU pass-through, and, where applicable, customer and demand charges) are not proposed to be changed
For residential customers, the LSP energy charge would be, "the average of the actual
Real-Time Settlement Point Prices (RTSPPs) for the customer’s
load zone for the previous
12-month period ending September 1 of the preceding year multiplied by the number of
kWhs the customer used during that billing period and further multiplied by 120%."
For small and medium non-residential customers, the LSP energy charge would be, "the average of the actual
RTSPPs for the customer’s load zone for the previous 12-month period ending September 1
of the preceding year, multiplied by the number of kWhs
the customer used during that billing period and
further multiplied by 125%."
In brief, the proposed revisions would remove the use of hourly RTSPPs from the LSP energy charges described above, and would use instead an average of past RTSPPs for a prior 12-month period.
Additionally, the draft proposal for publication would revise the definition of "market-based product" under the POLR rules to mean, "A month-to-month product that is either offered to
or matches the rate of a product offered to non-POLR customers of the REP for
the same TDU territory and customer class. A month-to-month contract may
not contain a termination fee or penalty. For purposes of this section, a rate for
residential customers that is derived by applying a positive or negative multiplier to the rate described in subsection (m)(2) of this section [e.g. the LSP energy charge definition described above] is not a
market-based product."
The LSP energy charge is not proposed to be changed for large non-residential customers
Contract Expiration & Renewal
For residential and small commercial customers, the draft proposal for publication provides that, "Each contract for service must include the terms of the default renewal
product that the customer will be automatically enrolled in if the
customer does not select another retail electric product before the
expiration of the contract term after the customer has received all
required expiration notices."
The draft provides that, "If a REP does not provide proper notice of the expiration of a fixed rate
contract and the customer does not select another REP before
expiration of the contract term, the REP must continue to serve the
customer under the pricing terms of the fixed rate product until the REP provides notice in accordance with applicable requirements of
subsection (e)(2)(A)(i) or (ii) [described below] or the customer selects another retail
electric product."
For fixed rate products, the draft provides that the REP must provide the customer with at least
three written notices of the date the fixed rate product will expire. The
notices must be provided during the last third of the fixed rate contract
period and in intervals that allow for, as practicable, even distribution of
the notices throughout the last third of the fixed rate contract period. For
fixed rate contracts for a period:
(i) Of more than four months, the final notice must be provided at
least 30 days before the date the fixed rate contact will expire.
(ii) Of four or fewer months, the final notice must be provided at least
15 days before the date the fixed rate contract will expire
The draft provides that, if a REP does not provide the required notice of the expiration of a
customer’s fixed rate contract and the customer does not select another
retail electric product before expiration of the fixed rate contract term, the
REP must continue serving the customer under the terms of the fixed rate
contract until sufficient expiration notice is provided or the customer
selects another retail electric product.
If a customer takes no action in response to the final notice of contract
expiration for the continued receipt of retail electric service upon the
contract’s expiration, the REP must serve the customer pursuant to
a default renewal product that is a month-to-month product that the
customer may cancel at any time without a fee. "The month-to-month
product price may vary between billing cycles based on clear terms
designed to be easily understood by the average customer," the draft states
The draft provides that, if the REP defined the contract end date by reference to the first
meter read on or after a specific calendar date, the written notice of contract expiration shall include a statement in
bold lettering no smaller than 12 point font that no termination
penalty applies to residential customers for 14 days prior to the
date provided as the "on or after" date included in connection
with the first meter read language referenced in the notice, or that no termination penalty applies
to small commercial customers for 14 days prior to the
contract end date.
Waiver Of Customer Protection Rules
Under the draft proposal for publication, the only additional restriction on the ability of large customers, or a non-residential customer which is part of an aggregation whose load is in excess of 50 kilowatts, to waive any customer protection rule is that the customer may not waive the new Acknowledgement
of Risk Requirements
Load Shed & Critical Care Info In YRAC, Bills
The draft provides that, in April and
October of each year, or as otherwise directed by the commission, the REP must
provide information to each customer along with the customer’s bill about:
(1) The electric utility’s procedures for implementing involuntary load shedding
initiated by the independent organization certified for the ERCOT power region
under PURA §39.151;
(2) The types of customers who may be considered critical care residential customers,
critical load industrial customers, or critical load according to commission rules
adopted under PURA §38.076;
(3) The procedure for a customer to apply to be considered a critical care customer, a
critical load industrial customer, or critical load according to commission rules
adopted under PURA §38.076; and
(4) Reducing electricity use at times when involuntary load shedding events may be
implemented.
Additionally, the draft provides that the YRAC provided by REPs to customers must provide information the REP has received from the TDU pursuant
to PURA §17.003(e) regarding the TDU’s procedures for implementing
involuntary load shedding initiated by the independent organization certified under
PURA §39.151 for the ERCOT power region, and, if applicable, where any
additional details regarding those procedures or relevant updates may be located. The draft provides that the REP may fulfill this requirement by providing a website address with the
required information. Each TDU must develop such information and resources by September 1, 2021 and make the website address where such information can be
viewed available to REPs. A REP may provide this information at a website
address other than the website addresses made available by the TDUs.
The YRAC must also include special policies or programs available to residential customers, "designated as
chronic condition or critical care under §25.497 of this title and the
procedure for a customer to apply to be considered for such designations."
Project 51830
ADVERTISEMENT Copyright 2010-21 Energy Choice Matters. If you wish to share this story, please
email or post the website link; unauthorized copying, retransmission, or republication
prohibited.
Proposal Retains New "Signed" Acknowledgement Of Risk For Products With Ancillary Service Pass-Through, And Also Any Mass Market Index Product
Proposal Includes New POLR Pricing For Mass Market Customers
July 28, 2021
Email This Story
Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Senior Account Operations Analyst -- Retail Supplier
• NEW! -- Energy Procurement Manager
• NEW! -- Natural Gas Retail Analyst -- Retail Supplier -- Houston
• NEW! -- Associate Director of Market Strategy -- New York/Anywhere
• NEW! -- Energy Risk Professional -- Retail Supplier -- Houston
• NEW! -- Energy Customer Support Specialist -- Retail Supplier -- Houston
• NEW! -- Business Development Account Executive - Indirect Broker Sales -- Retail Supplier -- Houston
• NEW! -- Customer Engagement Manager -- Retail Supplier -- Houston
• NEW! -- Energy Customer Service Specialist
• NEW! -- Energy Sales Executive
• NEW! -- Senior Energy Intelligence Analyst
• NEW! -- Energy Advisor
|
|
|
|