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PUC Proposes Additional Notice, Not Required By Statute, To Expired Fixed Rate Customers As Part Of Implementing New Law
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The Public Utilities Commission of Ohio has posted proposed rules to implement two new laws addressing retail supplier notice requirements for the ending of an "introductory" fixed rate -- R.C. 4928.102 (electric) and 4929.221 (gas)
As more fully discussed in our prior story, the new laws generally require retail suppliers to send, to customers on an "introductory" fixed rate that converts to a variable rate, notices concerning the expiration of the fixed rate, as well as an annual notice if the customer remains on a variable rate
While the proposed rules largely track the statutory language (including a previously reported statutory definition for "small commercial" electric customer [details here], to which notices must be sent), the proposed rules notably require an additional notice to electric customers as part of the annual notice
Both the electric and gas statutes require that a supplier shall send an annual notice to each residential and small commercial electric customer (for gas, residential and non-mercantile commercial customer) that has entered into a contract with the supplier that has converted to a variable rate upon the expiration of the contract's fixed introductory rate.
For the annual notice, both the electric and gas statutes only provide that, "The notice shall inform the customer that the customer is currently subject to a variable rate and that other fixed rate contracts are available."
However, PUCO proposes, for the electricity rule only, that this annual notice shall also inform the customer of, "The commission web site that, as a comparison tool, lists rates offered by CRES suppliers." [i.e. PUCO's Apples to Apples]
The electric and gas statutes both require that the two expiration notices to be sent by a supplier to customers in advance of the end of an introductory fixed rate shall inform the customer of PUCO's Apples to Apples site, but statute does not require a statement concerning the availability of the Apples to Apples site in the annual notice
Additionally, PUCO does not propose that the annual notice for natural gas customers include a notice of, "The commission web site that, as a comparison tool, lists rates offered by [retail gas] suppliers."
Also notable is that the statutes provide that, when adopting rules to implement the new laws, PUCO shall require that the rules shall include the following requirements regarding the notices:
(1) [The notices shall] Use clear and unambiguous language in order to enable the customer to make an informed decision
(2) Design the notices in a way to ensure that they cannot be confused with marketing materials
The proposed rules would comply with these directives by essentially re-stating these requirements and requiring suppliers to comply with these two provisions, as opposed to developing and including in the rules themselves specific clear and unambiguous language to be used by all suppliers, and/or a specific design to be used
Generally, aside from the additional Apples to Apples notice described above, PUCO's proposed rules do not include any additional language or provisions not found in the new statutes, including no additional details or definition of what constitutes an "introductory" fixed rate
Notably, in a customary part of the rulemaking form addressing impacts from the proposed regulations, PUCO states that the impacted parties are, "CRES/CRNGS suppliers using fixed rate contracts that convert to variable rates at the end of the contract term." [emphasis added]
Although this description is not part of the proposed rule itself, and although the proposed rule is no more clear on its applicability, and what "introductory" means, than the statute itself as discussed below, this brief description could suggest that the new notice requirements may be intended to apply to all automatic renewals from a fixed rate contract, whose contract term ends, to a variable rate
Other parts of the rulemaking form specifically use HB 15's terminology in describing the rule as applying to "introductory" fixed rates
As previously reported, HB 15's language applies to, "a contract for a fixed introductory rate that converts to a variable rate upon the expiration of the fixed rate." [notably, the statutory language does not state, "upon the expiration of the contract", but rather the expiration of the "fixed rate".]
The term "introductory" was not defined in HB 15, nor was it expressly clear that rollovers from an expired fixed rate contract onto a new variable rate "contract" would be included as within the new law's notice requirements. Several legislature-developed analyses of the bill also did not shed light on this question, as they merely used the language in the bill
As such, it was not clear if all fixed rates which auto-renew onto a variable rate were considered to be an "introductory" fixed rate, or if the law was more narrowly limited to products whose initial term (not renewal) includes an introductory fixed rate with a transition to a variable rate within the original contract term, rather than at renewal
Arguably, a fixed rate contract whose contractual term ends, and where service continues under a new, negative option contract with a variable rate, are two separate contracts, and thus there is no "introductory" fixed rate, as the fixed rate lasted the length of the entire original contract.
The language from the PUCO rulemaking form, quoted above, suggests that such automatic renewals from fixed to variable will be included as being subject to the new notice requirements, which hadn't been clear from HB 15's statutory language
Notably, PUCO's existing rules (OAC 4901:1-21-11 for electric, 4901:1-29-10 for gas) include notice provisions concerning auto-renewal. These auto-renewal requirements vary based on whether the auto-renewal term includes an early termination fee, but in all situations the supplier is required to provide at least one notice which shall, "accurately describe or highlight any changes."
The existing rules also require the auto-renewal notices to include the "specified rate" for service at auto-renewal
Notably, PUCO's proposed rules and notice of the proposed rules do not include any changes to the existing auto-renewal rules, but are rather proposed additional rules contained in their own new sections
Thus, these existing auto-renewal rules duplicate, and possibly conflict with in some instances, certain aspects of the HB 15 notices. This could be interpreted as HB 15, and the proposed new rules, not applying to fixed-to-variable auto-renewals, and that HB 15 rather only applies to true "introductory" fixed rates where the rate becomes variable within the original contract term
Case 25-710-GE-ORD
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Rule Form Also Suggests Broad Applicability To Any Fixed-to-Variable Auto-Renewal, Not Only "Introductory" Fixed Rates
July 2, 2025
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Reporting by Paul Ring • ring@energychoicematters.com
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