Utility Scales Back Proposal to Require Choice Suppliers to Post Rates on Utility Comparison Website; PSC Staff Acknowledges Lack of Authority to Review Pricing

DTE Gas (MichCon) has scaled back certain elements of its proposal to require alternative gas suppliers to post rates to a utility-run rate comparison website, but suppliers and Michigan PSC Staff raised concerns with several remaining proposals.

DTE Gas' mandatory rate posting proposal had been first reported in Matters (click here)

Most notably, DTE Gas is no longer proposing that small commercial rates be subject to a mandatory posting requirement on the utility comparison website.

Residential rates would still be required to be posted, and, "must include the highest publicly offered price(s) but may also note that lower rates may be available," under DTE Gas' latest proposal.

DTE Gas also eliminated its proposed requirement for suppliers to promote the comparison website in marketing materials. Furthermore, suspension of supplier enrollments would no longer be DTE Gas' initial action for non-compliance with the rate board requirements, with the matter instead to be first discussed among the supplier, DTE Gas, and PSC Staff.

DTE Gas still proposes that PSC Staff review supplier pricing, to which Staff objected.

"This may require Staff to include a comprehensive rate review of the AGS's offering in the current residential and small commercial contract and marketing material and a rate comparison to the centralized website offering. Staff has no authority to require an AGS to change their offered rate and believes this rate review option will be misperceived by customers as an endorsement or approval by Staff of an AGS rate," Staff said.

"Staff does not have 'approval' authority over Supplier offerings and does not want to be inundated with already reviewed Supplier contracts, marketing materials and scripts, which would only include rate changes with no other material change. For these reasons, Staff doesn't believe that a rate review option will be beneficial due to the potential perception that Staff is approving the Supplier's rate when Staff has no authority to require a Supplier to change its rate if found to be non-market conforming," Staff said.

The Retail Energy Supply Association objected to DTE Gas' revised proposal, arguing that supplier rate postings should be voluntary.

"Having GCC suppliers post their offers on a DTE Gas website could confuse customers as to the relationship between DTE Gas and a supplier, and could suggest some affiliation between them that does not exist, as well as mislead customers into thinking they are ultimately DTE Gas customers for their natural gas supply," RESA said.

RESA raised various concerns with DTE Gas' price comparison requirement. Under DTE Gas' proposal, "for a variable rate plan, suppliers will be required to post an explanation of how the rate is derived along with an example of the highest variable rate that could be charged."

"DTE Gas contemplates that it could cease processing supplier's enrollments if it deems a supplier's price reporting information is deficient, which could place a supplier in the unenviable position of having to publicly report confidential information on how a price is derived in order to satisfy DTE Gas," RESA said.

"Even DTE Gas does not post the highest Gas Cost Recovery rate that could be charged in the next 12 or 24 month term. So how can a supplier be expected to report the highest price that could occur months, even years, into the future for a variable rate offer," RESA asked.

Case No. U-17487