Regulator Directs Workgroup Concerning Implementation Of Retail Supplier Rate Cap

Group To Consider, "Potential Legal Considerations Associated With Changing The Customer’s Rate To A Rate That Is Different From The Rate In The Contract Between The Customer And The Supplier"

August 18, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA has requested that the electric distribution companies organize, facilitate, and otherwise lead a working group to identify, troubleshoot, and resolve any issues in relation to the implementation of a Rate Cap for retail electric suppliers

As previously reported, recent legislation (Public Act 23-102) requires a rate cap, equal to standard service, for hardship customers served by retail suppliers. PURA is also separately considered whether a rate cap should be applied to all retail choice customers

PURA directed that workgroup to consider, among other issues:

(1) should the financial hardship Rate Cap be assessed at the time of enrollment or at the time of billing, or a combination of both;

(2) the implementation of a process that will ensure customers remain at or below the standard service Rate Cap through the duration of the customer’s retail supplier contract term;

(3) the creation of any new programs or processes to identify a customer whose supplier price exceeds the standard service price;

(4) the creation of any new programs or processes to monitor the rate each month to ensure the supplier rate is at or below the standard service rate for the duration of the contract;

(5) the types of IT changes required to implement a Rate Cap;

(6) exploration of programs and/or procedures in other jurisdictions, if any, wherein a price cap is maintained at or below the standard service rate;

(7) potential legal considerations associated with changing the customer’s rate to a rate that is different from the rate in the contract between the customer and the supplier;

(8) a communication mechanism between the customer, supplier, and EDCs concerning a change in rates;

(9) a practicable and cost-effective approach for the EDCs to provide suppliers information about which customers are designated as hardship at any given point in time to enable suppliers to proactively comply with the requirements of Conn. Gen. Stat. § 16-245o(m), as amended by Public Act 23-102; and

(10) a compliance mechanism to ensure that the Rate Cap is observed by all suppliers between January 1, 2024, and when any IT changes are put into effect, to the extent that the EDCs do not fully modify their billing systems by January 1, 2024.

The EDCs, in consultation with the working group, shall file a final report by Wednesday, October 18, 2023, PURA directed

Separately, PURA said that any EDC costs related to utility billing system changes to implement a rate cap or related implementation required under § 31 of Public Act 23-102, Conn. Gen. Stat. § 16-245o(m) [relating to allowing hardship customers to shop, subject to the rate cap] shall be assigned to retail suppliers

PURA cited language in Public Act 23-102 which stated, "Any billing system costs incurred by an [EDC] to comply with this section shall be recoverable from all licensed electric suppliers."

PURA stressed that, "Out of an abundance of caution, the Authority is in no way pre-approving the costs associated with the billing system changes."

PURA said, "The Authority also reminds Eversource and UI that the burden of demonstrating prudently incurred costs to make billing system changes rests with each EDC. To demonstrate prudency, Eversource and UI will need to provide sufficiently detailed cost information and evidence to support the finding that all efforts were taken to minimize costs, including, but not limited to, evidence that: (1) reasonable competitive procurement processes were held, as applicable; (2) existing internal resources were leveraged to the extent possible; (3) investments in new resources were selected with current and future investments, programs, and public policies in mind; and (4) unnecessary costs were avoided."

Docket No. 18-06-02RE02

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