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New Jersey BPU Staff Provides Path For Retail Suppliers To Resolve Prior BPU Direction Advising That Suppliers' Pass-Through Of New RPS Costs Under Fixed Priced Contracts Violated Rules

Suppliers Must Provide Opportunity For Mass Market Customers To Receive Refunds, Directs Means For Suppliers To Provide Customer Notice

December 2, 2020

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Reporting by Paul Ring •

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The New Jersey BPU has issued a Secretary’s Letter which states that Staff has developed a pathway for third party retail electric suppliers (TPSs) to reach resolution and to close out matters addressed in a January 2019 letter to TPSs from the Director of the New Jersey BPU's Division of Energy, which had advised TPSs that any action to increase the supplier's fixed rate contracts due to P.L. 2018, c. 17, which modified various provisions of the state's renewable portfolio standard, would be in violation of N.J.A.C. 14:4-7.12

Specifically, the January 2019 Letter advised that, pursuant to N.J.A.C. 14:4-7.12, any contract to sell electricity at rates characterized as 'fixed' or 'firm', 'not variable' or other similar language (collectively referred herein as a 'fixed rate'), could not be increased during the pendency of the contract, without the customer’s affirmative consent, as permitted in N.J.A.C. 14:4-7.6(l). The January 2019 Letter set forth Staff’s view that changes to the solar carve-out in the 2018 solar renewable portfolio standard law, P.L. 2018, c. 17 ('2018 Solar RPS Law'), were not an acceptable justification for charging more than the fixed rate. The letter directed the suppliers to provide refunds to all fixed price customers for any such increases.

See background on the 2019 letter here

The Retail Energy Supply Association (RESA) had filed a formal petition with the New Jersey BPU seeking withdrawal of Board Staff's January 2019 letter, stating that such 2019 letter, "overlook[ed] controlling statutory authority that expressly permits RESA members (as well as any and all third party suppliers) to raise prices under the circumstances presented here."

On December 2, the BPU released a Secretary’s Letter stating, "Staff has developed a pathway for TPSs to reach resolution and to close out the matter by certifying that they have substantively complied with the terms of this subsequent Secretary’s Letter."

In brief, the pathway would only require refunds to residential and small commercial customers, and only to such customers affirmatively requesting a refund. Suppliers will only need to provide notice of refund eligibility through a banner on their website, as more fully described below

Specifically, TPSs who charged customers a rate that was higher than the fixed rate, without the customer’s affirmative consent, including because of the charges associated with the 2018 Solar RPS Law, hereinafter referred to as '2018 Solar RPS Costs', may be released from further obligations associated with the January 2019 Letter, if they certify that they have taken the following actions:

1. For any contracts that remain in effect, refrain from collecting additional 2018 Solar RPS Costs from New Jersey residential customers or small commercial customers (defined as those who utilized 11,000 kWh or less per year and hereinafter referred to as 'SCC');

2. Provide a refund to all qualifying residential customers and SCC as follows:

a. TPSs shall place an electronic banner on the main page of its website for residential customers or SCC, which will appear when the webpage is accessed by a New Jersey IP address, that will inform the customer that they may be eligible for a refund of 2018 Solar RPS Costs. The electronic banner will act as a hyperlink to a webpage where the customer may submit information to determine whether the customer is eligible for a refund of the 2018 Solar RPS Costs. For identification purposes, the residential or SCC customer must supply information that includes, but is not limited to, the name, address, telephone number, and e-mail address of the account holder. The customer may, but is not required to, provide the account number against which the 2018 Solar RPS Costs were billed. The electronic banner shall appear on the TPSs’ website within sixty (60) business days from the date of this Notice and remain on the TPSs’ website and available to SCC or residential customers for a period of thirty (30) calendar days after the banner first appears. TPSs shall take all reasonable measures to ensure the webpage and any associated hyperlinks upon which the residential customer or SCC is relying to make a request for a refund is fully functional and operating within the TPSs’ control. TPSs shall address any technical issues within a reasonable period of time once notified of any technical difficulties experienced by any residential or SCC customer seeking information about a refund.

b. Once the residential customer or SCC has been identified as a customer of the TPS, the TPS shall review the customer’s account status, contract terms, and usage in order to determine the customer’s eligibility for a refund of the 2018 Solar RPS Costs and calculate the potential refund within a reasonable period of time. The TPSs shall not unreasonably delay or cause delays in making timely evaluations of the residential or SCC customer’s eligibility for a refund. The evaluation shall consider objectively verifiable metered data in determining the customer’s eligibility.

c. In order for a residential customer or SCC to receive a refund, if eligible, the residential or SCC customer must be in good standing with the TPS. If the residential or SCC customer owes any sum to the TPS, any refund due to the residential or SCC customer shall first be deducted from the customer’s outstanding balance and any remaining refund shall be issued as set out in section (d) below.

d. If a residential or SCC customer is eligible for a refund, the TPS shall issue a check to the residential or SCC customer and mail same to the residential or SCC customer’s address on record within sixty (60) days from the date eligibility was determined.

e. Upon the expiration of the thirty (30) days of the electronic banner appearing on the main page of the TPSs’ webpage, TPSs shall send a letter to the Director of Energy of the Board within ten (10) days detailing the actions taken by the TPS to comply with this Notice. Additionally, the letter shall include the number of customers who sought a refund, the number of customers deemed ineligible and the reasons for the ineligible classification, the number of refunds actually issued and pending, the dates and amounts of the refunds or projected refunds, and all other information that may be relevant in the Board’s evaluation of compliance by the TPS.

f. TPSs are not required to take any additional actions related to non-residential customers, other than those described above as SCC.

TPSs seeking to opt into this settlement may notify the Secretary of the Board of their intent to comply by sending a letter to the Secretary's email address, which is contained in the letter Those who complete compliance with the foregoing requirements will thereafter be released from the January 2019 Letter.

The letter states that entities wishing to discuss options for substantive compliance are encouraged to contact Lanhi Saldana via email (email contained in the letter)

See the Secretary’s Letter here

Docket No. EO20100654

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