PUCT Commissioners Wrestle With Minimum Balance Issue for Disconnections of Prepaid Service

PUCT Commissioners discussed pending changes to rules applicable to prepaid electric service under Subst. R. 25.498 yesterday, though Commissioners did not vote on a final order (38675).

As only noted in Matters, Staff had sought guidance on several threshold issues from Commissioners (see 2/18), though Commissioners said that it was difficult to isolate adjudication of single issues given the interrelated nature of the rule.

Regarding whether REPs should be allowed to disconnect customers when their prepaid balance falls below a minimum balance, but is not yet below zero, Commissioners did not reach a consensus, and desired Staff to further develop various options, though Staff noted there are not likely additional approaches not already outlined as possibilities in Staff's memo. Commissioners struggled with how to balance the need to assure that customers are not disconnected when having ample funds in their account, while still recognizing the potential for delays in disconnections and the need for REPs to initiate a disconnect order prior to the account reaching zero to account for such delays.

Regarding the permissible fees REPs may charge for various non-supply services under prepaid service (such as a fee for making a payment, etc.), Commissioners leaned toward prohibiting fees for any transition from prepaid to postpaid service (excluding permissible deposits consistent with the Subst. Rules) or the cessation of prepaid service, but otherwise would allow REPs to charges fees at their discretion with proper disclosure of such fees. Commissioner Kenneth Anderson was a bit more hesitant on the latter issue, especially given the higher pricing of prepaid products which seemingly recovers additional costs such as payment agents, but Commissioner Donna Nelson said that such fees, when properly disclosed, align costs with cost causation, by allowing REPs to charge disconnect fees to customers who are disconnected. Nelson noted that even as TDUs set disconnection charges to zero with advanced meters, REPs will still incur administrative and staffing costs to internally process disconnections.

Regarding the offering of so-called financial prepaid or advance pay products (e.g. those relying on estimated usage and not smart meters), Commissioner Nelson was hesitant to eliminate the product for those customers not yet receiving a smart meter, given it is a product customers have desired. Nelson said that a few REPs which may be abusing the advance pay model should not lead the Commission to eliminate the product entirely, and said that enforcement action should instead by instigated against any such REPs.