Pennsylvania Maintains Retail Shopping "Waiting Period" Under New Switching Timeline

Walking back an earlier tentative proposal, the Pennsylvania PUC has decided to maintain a current "waiting period" in the retail electric market that requires utilities to withhold completion of switches until expiration of the waiting period.

The PUC will shorten the waiting period, however.

Electric distribution companies are required to mail a confirmation letter to customers of switches. Under the former process, a 10-day "waiting period" began on the date the EDC letter was mailed.

This 10-day waiting period is intended to give the customer time to contact the EDC to cancel the switch of supplier in cases where the customer did not authorize the switch of supplier. Note that this 10-day waiting period is made available to cancel switches in instances of slamming; it is not intended to act as a contract rescission period.

In an effort to accelerate to switching timeline, due to customer frustration with the lengthy process, the PUC had tentatively proposed to completely eliminate the 10-day waiting (confirmation) period.

However, in a final order issued yesterday, "[u]pon careful review and consideration of the comments, we agree with those participants who have argued that a complete elimination of the 10-day confirmation period at 52 Pa. Code § 57.173 is too ambitious for this type of proceeding. In addition, we are mindful of the ongoing RMI [retail market investigation] and the examination of the potential for mid-cycle reads in that proceeding."

The PUC elected to maintain the waiting period, but will shorten it to five days from 10 days.

"We believe that a 5-day period provides sufficient notice for customers and time to act to prevent an unauthorized switch. This will also provide some shortening of supplier switching timeframes," the PUC said.

The PUC expects that eliminating 5 days from the confirmation period will allow EDCs to reduce the 16-day switching rule to an 11-day rule -- meaning that some customers may be able to see a switch in suppliers in as little as 11 days

The PUC also ordered that the natural gas shopping waiting period shall be reduced from 10 days to 5 days.

Given that the PUC is maintaining the waiting period, and not adopting a host of rules proposed in light of its elimination, the PUC will not require retail suppliers, at this time, to identify and communicate definitive switching dates to customers.

Additionally, the interim guidelines adopted by the PUC require:

"When a contact occurs between a customer or a person authorized to act on the customer’s behalf and an EGS to request a change of the EGS, upon receiving direct oral confirmation or written authorization from the customer to change the EGS, the contacted EGS shall: (1) Notify the EDC of the customer’s EGS selection by the end of the next business day following the customer contact ... "

A similar guideline imposes the same requirement on retail natural gas suppliers.

"Although we have eliminated much of the proposed guidelines set forth in the Tentative Order, we repeat our concerns that some EGSs may not be moving customer switches through the EDC enrollment process as quickly as possible. We acknowledge that batching of customer requests may be an acceptable approach in certain instances for efficiency. However, it is unacceptable to hold customer enrollments that could have been processed more quickly on the basis of efficiency or, worse, target dates based solely on agent compensation considerations. We continue to urge EGSs to move enrollments through the process as quickly as possible," the PUC said.

"[W]e still believe our switching regulations should be reviewed in the context of today's marketplace. These regulations were written in the late 1990s, when experience with consumer shopping in the competitive retail market was limited. Given the experience all parties have since acquired and the advent of new technologies like advance metering, we believe it is appropriate to examine our switching regulations. Therefore, we will direct staff to initiate proposed rulemaking proceedings, within one year after entry of this order, using information gleaned from implementation of these Interim Guidelines, to review and propose changes to our electric switching regulations at 52 Pa. Code §§ 57.171 – 179 and gas switching regulations at 52 Pa. Code §§ 59.91 – 99," the PUC added.

The PUC said maintaining, but shortening, the current waiting period, "sufficiently narrows the focus of this proceeding to maintain all due regard for the Commonwealth Documents Law."

Certain utilities had argued that the PUC's original proposal, styled as interim guidelines, were not consistent with the Commonwealth Documents Law requirement concerning guidelines, since they established binding norms or obligations, rather than providing a statement of policy or guideline.

Docket: M-2011-2270442