Glass Houses: Constellation Didn't Send Renewal Notices to 1,500 Fixed Price Customers Just Before Polar Vortex Hit, Customers Were Moved to Variable Rates

Constellation, which has been among the suppliers (though not as forcefully) advising the Connecticut PURA that tougher licensing standards, and the attendant more robust community of suppliers, are among the appropriate remedial measures to prevent a recurrence of the rate volatility experienced by customers this winter, has informed PURA that it did not send renewal notices to over 1,500 fixed price customers leading into December 2013, right before the polar vortex hit.

As a result, these customers did not receive notice that their fixed prices were expiring, and the customers were rolled over to variable rates.

Specifically, "Constellation identified a group of 1,548 residential customers whose fixed price contracts expired during the month of December 2013 and who then rolled from their fixed price contracts to a variable rate product but did not receive the required renewal notification."

"This occurred because of insufficient resources and employee training on Constellation's new automated processing system, which was implemented in late Fall 2013," Constellation said.

Constellation told PURA that it has already begun the process of reconciling the accounts of the affected customers, and said that any customers negatively impacted by the variable rate product will be credited or refunded the difference between what they paid and the lower of the standard offer rate or the fixed rate from the customer's previous contract. No affected customer will be billed any additional costs for the missed renewal period.

Constellation will send affected customers a renewal notification, along with a letter explaining the error. The explanatory letter will include a statement that such customer may terminate their variable rate product without incurring an early termination fee.

"To ensure that this issue does not re-occur, Constellation has established new processes, provided additional employee training and allocated more resources so that employees now are able to timely identify customers who are due for renewal notification and to process their renewal notifications correctly," Constellation said.

Additionally, Constellation said that it identified a second group of residential customers that rolled from a fixed price product to a variable rate product at the end of the fixed rate product's term. "All of these customers were sent a renewal notification letter but did not receive the attachment containing the complete Terms and Conditions," Constellation said.

"This occurred because of a faulty process change during the integration of MX Energy's processing systems with those of Constellation. Constellation proposes to provide this group of customers with their complete Terms and Conditions in the one-time notice set forth in the Public Utilities Regulatory Authority's ('Authority') Draft Interim Decision dated April 17, 2014. Constellation believes that proceeding in this way will create the least amount of confusion for customers."