Texas Retail Providers Renew Request For PUC To Rescind Disconnection For Non-Payment (DNP) Moratorium; Alternatively Seek Narrower Moratorium

The Coalition of Competitive Retail Electric Providers (CCR) filed a pleading at the Texas PUC again urging the PUC to rescind its disconnection for non-payment (DNP) moratorium.

CCR noted that, "Through its emergency order, the Commission articulated that the disconnect moratorium was tied to the high prices ($9,000 per MWh) experienced by market participants during the week of February 14-20, 2021 and was seeking to protect the end use customers (1) from receiving bills reflecting these high wholesale prices and (2) from being disconnected if they did not pay bills containing these high wholesale prices. In fact, there were numerous media stories discussing how customers were receiving bills in the thousands of dollars for power consumed over a few days during the week of February 14-20, 2021. Almost every one of these media accounts explained that customers receiving these high bills were on prepay plans whose electricity price was directly indexed to the wholesale price of power. However, nowhere in their order, did the Commission explicitly state that it was only customers on such plans that would be protected by a disconnect moratorium. Rather, the Commission prevented all REPs from submitting disconnect requests irrespective of the type of plan serving the end use customer, and prohibited the Transmission and Distribution Utilities from executing any disconnect requests it did receive."

CCR said, "While the DNP moratorium has a negative impact on all REPs, those REPs offering prepaid service face an added conundrum. Specifically, since deposits cannot be required for prepay customers, REPs providing prepay service have no mechanism to ensure payment during a disconnect moratorium as customers can simply switch away instead of paying the credit balance incurred. As a result, many prepay providers have simply stopped marketing to and acquiring new customers during this moratorium further affecting their ability to financially recover from this winter storm."

CCR said, "The CCR understands that in adopting its order the Commission was protecting consumers who may have been enrolled on prepaid, indexed plans tied directly to the wholesale price of electricity. As we all know, that price spike the week of February 14, 2021 left these customers with enormous balances owed on their accounts. However, it is the CCR’s belief that the REP offering this plan is no longer serving customers in Texas. As a result, the need for this type of emergency, blanket protection has ended."

CCR noted that REPs are already obligated to work with customers who express an inability to pay per the requirement to offer access to deferred payment plans

"As REPs return to their normal billing practices (for both prepay and postpay customers), REPs need customers to pay their bills. REPs are already obligated to work with customers who express an inability to pay per the requirement to offer access to deferred payment plans. The imposition of a broad disconnect moratorium on this market only serves to incent customers to believe they will not have to pay the bills they are accruing for electricity. Further, by imposing a DNP moratorium on REPs while simultaneously allowing ERCOT to resume normal invoicing and settlement timelines under its protocols, only serves to further hamper REPs abilities to meet their ongoing market obligations," CCR said

If the Commission finds elimination of the existing DNP moratorium untenable, CCR offered several alternatives:

• limit the DNP moratorium to bills containing consumption during the week of February 14, 2021; or

• keep the DNP moratorium but allow REPs to automatically place delinquent accounts on a deferred payment plan (DPP) with a switch-hold.

"The Commission could consider limiting the DNP moratorium to a prohibition on disconnecting for bills (or accounts) that include consumption for the week of February 14, 2021. This narrower prohibition would honor the intent of protecting customers who may experience “sticker shock” for any consumption during that week, though properly billed at normal, contracted rates, may result in higher than average bills. This would essentially allow REPs to treat amounts owed for consumption during the week of February 14, 2021 as disputed amounts pursuant to §§25.480(f) and 25.483(e)(5), which prohibit disconnects for nonpayment of disputed charges," CCR said

"Alternatively, the Commission could keep the DNP moratorium in place through March 31, 2021, but allow REPs to automatically place delinquent accounts (or prepay accounts that have a negative account balance greater than $50) on a deferred payment plan (DPP) with a switch-hold for all bills issued (or negative account balances) on or before March 31, 2021. for all bills issued (or negative account balances) on or before March 31, 2021. This solution provides REPs some certainty that the customer bill will be paid while providing the customer additional time to make such payments," CCR said

"By creating a mechanism that incents customer payment, REPs would not be forced to raise their rates in the future to socialize the cost of higher customer defaults created by this DNP moratorium. Should this option be chosen, the Commission could mandate the DPP terms as those already specified in §25.480(j)(2)(B) for postpay customers or §25.498(i)(6) for prepay customers, or other terms the Commission may find appropriate. The CCR would further agree that all DPPs automatically entered into by operation of this provision be provided to the customer as normally required by §25.480(j)(5) for postpay customers or §25.498(i)(9) for prepay customers," CCR said

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