New Hampshire to Review Retail Supplier's Complaint Alleging Double Charging of Switching Fee by PSNH, Withheld Funds

The New Hampshire PUC has opened a formal proceeding (IR 13-233) to adjudicate a complaint against Public Service Company of New Hampshire lodged by PNE Energy Supply, LLC, in which PNE alleges, among other things, that PSNH is inappropriately applying a switching fee to both the losing and gaining retail suppliers under a customer switch.

The PUC noted that PNE Energy Supply has alleged that PSNH has been withholding $100,000 in customer payments due to PNE for its retail supply services in alleged violation of the terms of the PSNH Electricity Delivery Service Tariff-N.H.P.U.C. No. 8, and PNE's Electric Supplier Services Master Agreement and Electric Supplier Trading Partner Agreement with PSNH.

PSNH disputed the complaint, and claimed that only $92,961.39 is at issue. According to the PUC, PSNH argued that its withholding of this amount is permitted under the terms of PSNH's tariff and agreements with PNE, and requested that the Commission dismiss PNE's complaint.

Specifically, PSNH said that it made the determination to exercise, "its common law rights of setoff and recoupment," in February when PNE Energy Supply was subject to a default at ISO New England. PSNH elected to withhold payments that would otherwise have been remitted to PNE, "to cover any potential costs or damages incurred by PSNH to address PNE's default."

"By the end of February, PSNH determined that the reasonable amount of retention was $100,000, and all amounts in excess of that amount were remitted to PNE. Ultimately, PSNH determined that the amounts owed PSNH for tariff services provided PNE in February and March totaled $54,391.39, which, when added to the $38,570 cost to PSNH/NUSCO for work required to assume load responsibility from PNE, totaled $92,961.39."

PSNH further said that the Electric Supplier Services Master Agreement provides that, "Each party represents that it is and shall remain in compliance with all applicable laws, tariffs and NHPUC regulations during the term of this Master Agreement." Due to its default, "PNE was not in compliance with the Commission's regulations and, as such, PNE has no basis upon which to claim that PSNH is in violation of any portion of the ESSMA by withholding funds since any performance by PSNH was excused by PNE's voluntary default at ISO-NE and consequent inability to obtain supply in the New England energy market," PSNH said.

PNE says that PSNH justifies $48,000 of the withheld amount as appropriate by claiming that PSNH had the right to impose a "selection charge" (switching fee) on PNE accounts which were dropped. PNE argued that the tariff does not provide for a selection charge in this instance, and that the charge was only applicable to the new supplier.

The tariff, as listed on the PUC website, specifically provides that:

"The Company will be entitled to make a Selection Charge for any changes initiated by a Customer, Supplier, or an authorized agent to a different Supplier or to Default Service or Self-Supply Service. For customers who are currently taking Supplier Service, Default Service or Self-Supply Service, the Selection Charge will be assessed to the new Supplier at the time the Company receives an enrollment transaction from the new Supplier. For Customers who are currently taking Supplier Service, the Selection Charge will be assessed to the existing Supplier at the time the Company receives a drop transaction from the existing Supplier. The Selection Charge will be assessed to the Customer if the Customer terminates Self-Supply Service and receives Default Service or initiates Self-Supply Service when receiving Default Service or Supplier Service."

PSNH said that, "Under PSNH's tariff, when a new supplier submits a customer enrollment, that supplier is assessed a selection charge and the supplier that is to be dropped is also assessed a charge."

However, the tariff appears to only provide for the losing supplier to be charged the selection charge when PSNH receives a, "drop transaction from the existing Supplier." PNE avers that it never submitted any drop transactions (enrollments were submitted for a portion of the customers by another competitive supplier, while the balance of the customer book was dropped to default service, due to PNE's default at ISO-NE and not specifically a, "drop transaction from the existing Supplier").

"Accordingly, PNE will be amending its Complaint to recover additional improperly billed Selection Charges since at least July 2010. PNE also believes that this matter — of potentially double-charging for Selection Charges — may well be of substantial interest to many of the other competitive electric power suppliers. The issue thus raised is one of substantial public importance in the operation, management and regulation of the competitive electricity market, and PNE respectfully believes it merits the Commission's attention and resources," PNE said.

"On the basis of an initial review of the parties' submissions, and without determining the ultimate facts, it appears to the Commission that there may be a basis for the complainant PNE's dispute. Accordingly, the Commission directs Staff to conduct an independent investigation pursuant to RSA 365:4," the PUC said.

The Commission directed Staff to draft a report that elucidates the factual and legal issues and that is sufficient for the Commission to determine whether PNE's complaint may warrant further action by the Commission. The Office of Consumer Advocate may, if it so elects, prepare its own separate report to the Commission.

Staff and OCA shall file their reports on or before September 30, 2013.