Maine Opens Inquiry into Retail Market, Default Service, Customer Protection

Citing an increase in market activity, the Maine PUC has opened an inquiry into potential changes to residential and small commercial Standard Offer service, and to other rules and practices related to retail competition in the residential and small commercial sectors.

"The Inquiry will also include the possible need to address customer protection issues in light of the increase in CEP [competitive electricity provider] activity in the residential and small customer classes," the PUC said.

The PUC's inquiry follows a petition from Electricity Maine for an investigation of such issues, as first reported by Matters last month.

Among other things, the inquiry will address the appropriate length for default service contracts, and whether staggering is appropriate; uncollectibles, CEP receivables and collections, and partial payment priority; retail supplier and standard offer rate comparisons; and contract renewal pricing disclosures.

Specifically, the PUC sought comment on the following:

1. Please discuss whether, given the recent increase in competition for residential and small commercial customers, the Commission should phase out its staggered term approach so that standard offer prices more closely mirror market prices. If so, should the Commission solicit standard offer service bids for the entire load every year or every six months?

2. Please discuss whether the Commission should amend its current standard offer rules to eliminate a pre-established uncollectible adder for standard offer service.

3. Please discuss the implications for standard offer prices if the rules were amended to remove the pre-established uncollectible adder for standard offer service.

4. Please discuss the proposed change in light of the fact that unlike CEPs [competitive electricity providers], SOPs [standard offer providers] have no access to information about the identity or creditworthiness of their customers, must provide service to any and all customers that want to take standard offer and, therefore, cannot manage uncollectible risk in the same manner as competitive CEPs who know who their customers will be and who are not required to provide service to any customer.

5. Please discuss any impact the proposed change may have on a utility's incentive to collect standard offer debt on behalf of a standard offer provider.

6. Please discuss whether the Commission should amend the current partial payment rules so that partial payments are allocated proportionally to the T&D utility, SOP, or the CEP, based on the percentage of the charges on the customer's bill, with all past due charges covered before any current charges.

7. Please discuss whether a partial payment allocation proposed by Electricity Maine would violate or be inconsistent with the statutory requirement in Title 35-A, section 3203(14) which specifies: "A transmission and distribution utility may not disconnect service to a consumer due to nonpayment of generation charges or any other dispute with a competitive electricity provider, except that the commission may permit disconnection of electric service to consumers of electricity based on nonpayment of charges for standard-offer service provided under section 3212." In this regard, please consider a situation in which a customer receives a disconnection notice for an overdue utility account, but some amount of a partial payment must go to a CEP before the utility account is satisfied. In the event that the utility includes the amount owed to a CEP which must be paid to, in essence, avoid disconnection, is section 3203(14) implicated?

8. Please discuss whether the Commission should amend its current rules so that utilities would be required to enter into payment plans that include outstanding CEP charges. If so, should CEPs be charged for this service?

9. Please comment on the extent to which such a change would eliminate any efficiencies that would otherwise accrue in a competitive market in that one of the activities for which entities compete is performance in terms of credit and collections. With respect to the competitive CEP market, please discuss the advantages and disadvantages of a utility taking a major role in the collection activities of a competitive business.

10. Please discuss generally whether the Commission should modify or supplement its current customer protection rules and, if so, in what respect(s).

11. Please discuss whether and if so how the rules should ensure clarity and accuracy of information provided by CEPs with respect to price comparisons or savings compared to standard offer service.

12. Please discuss whether the CEP notice required by section 4(B)(5) to customers regarding the renewal of a contract term should specify any change in the new contract rate compared to the existing contract rate.

13. Please discuss whether the rules should specify that it is violation for a CEP or a representative or agent of a CEP to state or suggest that it is associated with a utility.

14. Please discuss whether the standard offer opt-out fee should be applied to residential and small commercial customers or, if not, please discuss how to address potential increases in the cost of standard offer service as a result of frequent and strategic customer migration between CEP and standard offer service, for example, to avoid periods of high market prices.

15. Please identify any other issue that should be included in the inquiry, and discuss the implications of the issue for residential and small commercial CEP and standard offer service.

Docket No. 2013-00200 & 2013-00180