Previously Unenforced, Utility Now Applying Variable Rate Recalculation to Customers Leaving Default Service

Beginning in December, Unitil in New Hampshire began applying an existing tariff provision retroactively subjecting default customers departing for competitive supply to variable default service rates, prompting customer complaints.

Unitil residential and small commercial customers are typically charged a fixed default service rate for six months, though monthly variable prices may be elected by the customer, and are also applicable to customers returning to default service from competitive supply. For customers departing for a competitive supplier, Unitil's tariff provides that a default service customer who had been subject to the fixed pricing shall be retroactively billed the variable default service rate for the prior months in the default service period.

However, Unitil had not historically been applying this default service rate recalculation to customers leaving default service.

According to New Hampshire PUC Staff, Unitil, upon advice of its counsel, began enforcing the default service rate recalculation of its tariff effective December 1, 2014.

In February 2015, the PUC Consumer Affairs Division began to receive complaints from Unitil customers who had been billed for the difference between the fixed rate default service and the variable rate default service upon switching to a competitive supplier. These customers had already received and paid their monthly Unitil bills, based on the fixed rate for default service. As a result of choosing a competitive supplier, they were now being billed an additional amount from Unitil for that same service. PUC Staff understands that Unitil has received customer complaints as well.

Staff requested that the issue of the default service rate recalculation be included for review in Unitil's current default service procurement plan, which the PUC granted.

In a memo in support of its request, Staff said that, "Staff believes the ability to adjust upward or downward the bills of customers who choose to purchase their energy service from a competitive supplier, in the first instance, could operate as a barrier to participation in the competitive retail energy market and, in the second instance, is confusing to customers."

Docket DE 15-079