Tentative Pennsylvania Order Would Require Suppliers to Meet Deadline in Submission of Switches

Pennsylvania electric suppliers would be required to submit switches to electric distribution companies (EDCs) prior to a customer-specific deadline under the PUC's tentative order to accelerate the switching process (M-2011-2270442).

The written tentative order was published this morning. As first noted by Matters last week, the order would eliminate the 10-day waiting period and EDC confirmation letter which are currently part of the switching process (11/10).

With respect to new obligations for electric generation suppliers (EGS), the tentative order would establish interim guidelines holding that, "An EGS should obtain information about a customer's meter read cycle and the switching deadline so that the EGS is able to advise a customer about the date that the customer's account can be transferred to the EGS."

The switching deadline would be provided by the EDC, and is the date by which the EDC must receive a customer account transfer notice from an EGS so that the customer's account can be transferred to the EGS at the customer's next immediate meter read. The switching deadline shall be established in the EDC's tariff based in part on its operational requirements.

Under the draft interim guidelines, "An EGS shall submit an account transfer notice to an EDC or DSP [default service provider] before the switching deadline to ensure that the customer's account is transferred to the EGS at the customer's next immediate meter read date."

An EGS would be permitted to delay the submission of an account transfer notice when the customer has agreed that the EGS would not begin to provide service until after the customer's next immediate meter read date.

"In marketing generation service to a customer, an EGS should provide information about the customer's meter read date, the switching deadline and the estimated date that the customer's account will be transferred to the EGS so that the customer will understand the switching process," the proposed guidelines state.

The required EGS disclosure statement, "shall include information about the length of the agreement, including the starting date for the service with the EGS."

Furthermore, "[t]he EGS shall include a good faith estimate of the starting date of service for the customer's service based on the customer's next immediate meter read date and the switching deadline for that date," the proposed guidelines hold.

Also notable in the proposed interim guidelines is that the submission of an account transfer notice to an EDC by an EGS shall serve as evidence, to the EDC, of a customer's authorization to transfer his or her account to the EGS. Such account transfer notice provided by the EGS to the EDC may not be used as evidence to prove that the customer authorized the EGS to transfer the account in a Commission proceeding on a customer complaint.

Additionally, the proposed interim guidelines provide that, "An EGS may not rescind the transfer of a customer's account to another EGS without written evidence of the customer's authorization to rescind the transfer."

"Prohibiting an EGS from rescinding the transfer of a customer account to another EGS without written customer consent eliminates the opportunity for mischief and helps to ensure that customer's choices are respected," the PUC said.

As noted above, the PUC's tentative order would eliminate the current 10-day waiting period during which time the EDC holds an enrollment request in order to give the customer an opportunity to respond to the EDC confirmation letter. With this period eliminated, the current confirmation letter would be replaced with a "customer account transfer letter," which will alert the customer to the change in EGS, will provide pertinent information about the EGS, and will direct the customer to contact the EGS with questions and concerns.

The PUC's tentative order dismisses as impractical the use of mid-cycle meter reads as an interim measure to shorten the switching process for customers, due to current metering technology.

However, the PUC proposed that supplier switching be fully integrated into all smart meter deployment plans, with the expectation that, once smart meters are in use, supplier switching will be able to occur at any given point in time.

The PUC also said that, because of existing Pennsylvania consumer contract law, a change to the 3-day rescission period is not feasible.

The PUC's tentative order also offers the following discussion regarding EGS responsibility for delayed enrollments:

"EGS procedures were also examined to determine if some could be changed to shorten the switching time frame. What was found was that some supplier practices actually adversely affect the switching process timeframes. For instance, the practice of batching enrollments before sending them to the EDC instead of sending them to the utility one at a time may unnecessarily delay account transfers. While there may be good practical, operational reasons for batching enrollments, such as processing a batch of enrollments is more efficient than processing them individually, it is also possible that suppliers or their employees are stockpiling and delaying enrollments to make a weekly quota.

"As noted above, the Commission has [previously] waived the provision of 52 Pa. Code § 57.173 that requires the EGS to notify the EDC of the customer's selection 'by the end of the next business day following the customer contact' in instances where the customer's service is not to start until some distant, future date. However, under the color of the waiver, EGSs may be holding enrollments for reasons other than future service dates. Additionally, some EGSs hold enrollments and do not submit them to the EDC until the last day of the 3-day right of rescission period provided for in 52 Pa. Code § 54.5(d).

"In reference to customer frustration with the length of time necessary to transfer suppliers, EGSs themselves could do more to ease that frustration. Suppliers do have access to utility meter-reading schedules, and with this knowledge, should be able to communicate to the customer a good approximation as to when that customer's new supply service will start. The failure of suppliers to provide customers with this information, while not necessarily delaying the switching process, could contribute to customer anxiety about shopping. More importantly, suppliers can use meter-reading schedules to ensure that enrollments are submitted to the EDC in a timely fashion in order to target the desired meter read date so the switch is not unnecessarily delayed, and full customer savings are achieved."