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Regulator Adopts Interim Order Implementing Change In Law Regarding Hardship Customers' Shopping Eligibility

Interim Order Does Not Require Suppliers To Serve Customers Below Supplier's Cost

April 24, 2024

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Copyright 2010-24
Reporting by Paul Ring •

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The Connecticut PURA adopted an interim decision addressing the requirement in General Statutes § 16-262o(m) allowing certain customers (generally hardship and similar customers) to enroll with an electric supplier provided that the supplier's rate is at or below the EDC’s standard service rate.

The interim order, which largely adopts a previously reported draft, narrowly addresses the question of the EDCs' compliance with the revised statute allowing hardship customers to shop, at a rate that does not exceed the default service rate, and does not specifically address a broader question in the proceeding concerning the "appropriate limitations" (if any) with which all customer contracts with electric suppliers, entered into on and after a determined date, must comply

As such, it is noted that PURA's decision is labeled as an interim decision, implying that the decision is not intended to resolve in toto the investigation under Docket 18-06-02RE02, and that further action should be expected

See more background on the "appropriate limitations" investigation here

PURA's adopted interim order approves the previously reported EDCs' proposal on hardship customer shopping, which generally will automatically move shopping customers back to default service upon such a shopping customer becoming a hardship customer, if the customer's rate exceeds the standard service rate

PURA's interim decision does not specifically address proposals from certain parties that would require suppliers to resume service to the customer, at the original rate, if the default service rate later increases above the supplier rate.

PURA's Office of Education, Outreach, and Enforcement (EOE) had also proposed that rather than moving hardship customers to default service, suppliers should instead be required to continue serving hardship customers at a capped rate not exceeding standard service (e.g. changing the supplier's contracted rate, see background here). Though the interim decision does not discuss EOE's proposal, the decision necessarily rejects this approach, at this time, in adopting the EDCs' proposal, which moves applicable customers back to standard service

Furthermore, in adopting the EDCs' proposal, the interim order necessarily does not, at this time, adopt EOE's argument that, due to non-discrimination language in statute, suppliers cannot refuse service to hardship customers, and thus suppliers must be required to enroll hardship customers if so desired by the customer, with the supplier's rate capped at the standard service rate. In contrast, the EDCs' proposal adopted under the interim order requires the EDCs to reject any enrollments for a hardship customer where the enrolled rate exceeds the standard service rate

As summarized by PURA in the interim order, suppliers will be able to obtain information concerning customer contracts that are at or below the standard service rate. Suppliers will receive information concerning the hardship status of current or prospective customers under changes to the EDC’s electronic data interchange systems.

For existing customers, the EDCs will send the supplier a notification when a customer becomes coded for hardship.

The EDCs will reject enrollment requests for hardship customers if such a request is to enroll at a rate higher than standard service.

The EDCs will monitor supplier rates charged to hardship customers on a daily basis and will, "return customers to standard service if the supplier is charging the hardship customer a rate that is above the standard service rate."

The monitoring will initially be a manual process for Eversource, and UI will do so, "by running a nightly query to monitor rates."

Eversource estimates the technical changes to automate the hardship rate monitoring will take 6 months with estimated total costs of approximately $600,000. UI estimates that the costs associated with compliance with General Statutes § 16-245o(m) will total $32,000, and UI anticipated any changes in implementing the EDCs’ Proposal would be completed in approximately two weeks.

Statute explicitly requires that, "Any billing system costs incurred by an electric distribution company to comply with this section shall be recoverable from all licensed electric suppliers."

The interim order states, "The Authority reminds the Companies that the burden of demonstrating prudently incurred costs to make IT changes rests with each company. The Companies will need to provide sufficiently detailed cost information and evidence to demonstrate prudency, 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. For the avoidance of doubt, the Authority is not pre-approving the costs associated with the billing system changes."

The interim order directs the EDCs to provide info concerning suppliers serving the residential market and their market share, suggesting that PURA may assign costs to retail suppliers based in whole or in part based on residential market share, though the interim order itself makes no decision on cost assignment

The Authority directed each EDC to file a motion itemizing any costs for which the EDC seeks recovery along with supporting documentation

PURA ordered that the EDCs shall include with each of their respective motions a list of licensed suppliers serving residential customers in their territories as of the date of the motion filing, the number of residential customers served by each supplier, and their most recent twelve-month residential kWh.

In an additional ordering paragraph that had not been included in a draft order, PURA's adopted interim decision requires the EDCs to report on the amount of kWh associated with hardship customers served by each supplier each month at a specific rate

The EDCs shall report, "(1) billed supply rates being charged in dollars per kWh by each supplier, (2) number of customers at each rate, and (3) kWh at each rate for financial hardship customers."

Docket No. 18-06-02RE02


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