RESA Raises Concern on BGE Prepay Pilot

The Retail Energy Supply Association has raised concerns with a prepaid pilot proposed by Baltimore Gas & Electric

The proposed pilot, to be funded by the Customer Investment Fund created as a result of the merger of Constellation and Exelon, was first reported by Matters

"RESA is concerned that BGE's proposed pre-pay pilot program may be premature and may have unintended competitive market impacts," RESA said in comments to the Maryland PSC. "It is important to bear in mind that retail suppliers often differentiate themselves by offering innovative billing and product design options, including pre-pay products. Accordingly, pre-pay product offerings generally are considered competitive service options offered by competitive market participants, not by a utility in its capacity as the standard offer or default service provider. Although RESA generally does not oppose allowing BGE, or any electric distribution company, to develop new methods for billing their distribution services to customers, the issue of a utility-offered pre-pay product presents important operational, policy, and competitive market concerns that warrant full consideration," RESA said.

"RESA members, and likely other competitive suppliers, are interested in offering pre-pay in the Maryland market. However, any initiative to implement pre-pay products must first address a myriad of market design and infrastructure matters including but not limited to customer usage data access, remote connect/disconnect capability, regulatory restrictions governing service termination, and metering deployment. Without resolution of these issues, unfortunately the Maryland market is not conducive to such product offerings from competitive suppliers. Moreover, it would be inappropriate to allow BGE to monopolize such an offering simply because it is the only entity that can access customer usage data, remotely connect and disconnect customers, terminate service and deploy advanced meters," RESA said.

"Under BGE's proposed pre-pay pilot program, certain utility technology infrastructure will be developed and utilized for BGE's service offerings (it is RESA's assumption that the pre-pay option would only be available for SOS customers). A prepay product offered by BGE may also require modification to certain regulatory requirements concerning service termination. This is because under the basic structure of a pre-pay program, whether for electricity or any other product, the customer no longer receives service once the pre-paid amount is fully expended. Because retail suppliers cannot pursue pre-pay products given the current infrastructure and regulatory limitations, BGE would experience an undue competitive advantage if such a pilot program were to be implemented and approved for BGE," RESA said.

RESA said that it would welcome a stakeholder initiative, "to identify the necessary infrastructure improvements and regulatory policies that would enable competitive suppliers to develop and deploy pre-pay and other value added products and services."

"RESA encourages the Commission to undertake a rulemaking or other stakeholder process to properly explore the policy issues surrounding the provision of pre-pay products and to develop rules that will allow retail suppliers to deliver these, and many other, new products and services to customers while at the same time ensuring customers are protected."