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Is The Commission Always Right?
Source: Regulatory Compliance Service (RCS)
While reviewing customer complaints filed with the Commission last month, it occurred to me that there are differing interpretations of the requirements outlined in Substantive Rule §25.217(f).
A customer on a solar buy-back plan filed a complaint, stating that she was “cheated out of her buy-back credits” when she terminated her contract. The REP’s initial response pointed to language in its contract documents – EFL and Terms of Service – that explained what happens to bill credits upon contract termination.
The Commission found the REP to be in violation, citing Substantive Rule §25.471(a)(4), which states the Customer Protection Rules of this subchapter control over any inconsistent provisions, terms, or conditions of a REP’s terms of service or other documents describing service offerings for customers in Texas.
Staff responded that “Our office reviewed the REP’s contract document and confirmed the company is not following §25.217(f)(3), which states ‘If a REP’s service to a DRGO is terminated, any outstanding amounts due to the DRGO may be used to offset outstanding bill amounts but in all cases shall be remitted by the REP no later than 30 days after the REP receives the usage data and any related in- voices for non-bypassable charges.’”
Staff stated that “the rule is designed to protect solar customers and therefore, our office suggests that the REP revise and update its Terms of Service to align with Commission rules. All customer credits must be reimbursed on the final invoice per Substantive Rule§ 25.217(f)(3).”
According to the REP’s TOS, “Bill credits may be reflected on either your next bill or the subsequent, depending on the timing of processing your bill credit. If the bill credit amount exceeds the energy charge on the bill to which it is applied, the excess amount will be applied to your next bill, provided that you receive another bill from the REP. If at any time or for any reason you cease to be a REP customer before the application of any bill credits, then all such bill credits will immediately expire and be forfeited by you. In no event and under no circumstances may bill credits be redeemed or exchanged for cash; bill credits have no cash value.”
It seems that some interpret the language in PURA and the PUCT’s rules to imply that REPs are not obligated to assign a specific “buyback” value to any excess energy that might be generated by a distributed generation facility on a customer’s premise. Under the applicable statute, excess energy may be used as offsets to customer bills and the value of the excess energy is a matter of agreement between the customer and the REP.
This interpretation would suggest that consistent with the statute, and under §25.217(f)(2), the value of this generation is a matter of contractual agreement between the REP and the customer in competitive areas of ERCOT.
The REP responded in their appeal, “Under the terms of this customer’s contractual agreement, no amounts are due to the customer if the customer terminates service with credits remaining because the credits are not direct monetary credits and have no cash value. The initial response to the informal complaint referenced §25.217(f)(3) which finds that the value of excess energy may be used to offset outstanding bill amounts and requires that “any amounts due” be remitted to the customer.”
They continue, “The language in the Commission’s rule on this issue was adopted in the initial version of this rule approved in 2008. The contractual agreements to value excess energy as offsets to bills without having separate cash value are consistent with the applicable statute and rules and have been used throughout the industry since its initial adoption. The initial determination regarding the above-referenced informal complaint is a departure from this common practice, and the REP respectfully requests reconsideration of the interpretation offered in the initial response to that informal complaint.”
A review of a dozen other REPs’ Terms of Service suggests that the above interpretation is shared by quite a few providers.
Staff, however, didn’t appear to agree with the REP’s interpretation and issued a final determination, stating “We decline to remove the determination because CPD views §25.217(f)(3) to mean the customer receives the value of the sale of their excess in all cases and the language included in the EFL or TOS cannot circumvent the rule. By canceling the credits upon termination, the customer is not receiving the value in all cases.”
So, is the Commission Staff always right? The answer to the question would appear to be yes – at least in the context of deciding what its rule language means.
It is important to note that informal complaints are just that, informal. They do not, in and of themselves, create administrative penalties. However, patterns (such as numerous findings of violations) can be used to initiate a formal enforcement action which can lead to administrative penalties.
