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Regulator Seeks Comments On Retail Suppliers’ Alternative To Staff’s Proposal That Would Require Retail Suppliers To Serve Customers Below Cost
The Connecticut PURA has sought, from working group members, comment on a proposal from the Retail Energy Advancement League (REAL) concerning how hardship customers should be served in the retail electric market
As previously reported, PURA’s Office of Education, Outreach, and Enforcement (EOE) has developed draft language which would require that retail electric suppliers must continue to serve hardship customers, under a capped, lower rate, when the customer’s original contract rate exceeds the default service rate, rather than the supplier dropping the relevant customers to default service to ensure compliance with a statutory rate cap
Under Connecticut statute, contracts for hardship customers shall be at or below the standard service rate, “for the duration of the contracts.” Currently, retail suppliers generally comply with the rate cap for hardship customers by dropping the customer, mid-contract if necessary, to default service when the supplier rate exceeds the default service rate (either due to a default service rate change, or the customer newly gaining hardship status mid-contract)
As more fully explained in our prior stories, EOE argues that a non-discrimination provision in statute requires retail suppliers to serve hardship customers when requested, and that suppliers cannot refuse service to hardship customers by dropping such customers to default service, even if the original supplier rate exceeds the default service rate, and the supplier would need to lower the supplier’s rate, and serve the customer at the lower rate, in order to comply with the rate cap applicable to hardship customers
See full background here
REAL proposed an alternative to EOE’s proposal. REAL’s alternative would provide the retail supplier with the following options for service to hardship customers, in the circumstances where the standard service rate becomes lower than the retail supplier’s price.
(1) OPTION A: The retail supplier could continue to serve the hardship customer at or below the standard service rate (similar to EOE’s proposal), or
(2) OPTION B: The retail supplier could return the customer to standard service with the mechanisms in place to notify the customer and offer to re-enroll the customer on the supplier’s price as originally contracted when that supplier price again becomes lower than the standard service rate during the duration of the term (similar to the current process with additional customer notice); or
(3) OPTION C: The retail supplier could return the customer to standard service with the agreement and mechanisms in place to automatically re-enroll the customer on the supplier’s price as contracted when that supplier price again becomes lower than the standard service rate during the duration of the term (similar to Option B, but with a seamless re-enrollment of the customer).
“In all three options, the customer is getting the benefit of the lower of the supplier price and standard service rate and the supplier is taking care of any necessary dropping and/or re-enrolling (i.e., the EDC does not need to take on this responsibility). The important difference for the supplier is whether the supplier will take a loss and serve the hardship customer when the standard service rate is lower (under Option A), or if that supplier will not continue to serve the customer (under Options B and C), let the EDC serve the customer at the lower standard service rate, and re-purpose the hedged power,” REAL had said
“This would meet the statutory requirement that hardship customers never be served at prices above standard service and would preserve EOE’s goal of providing customers with fewer barriers to accessing supplier prices when advantageous, as they would seamlessly be re-enrolled with the supplier once the standard service rate exceeds the supplier’s price,” REAL had said
In seeking comments, PURA also specifically sought comment on the entity best suitable to effectuate and/or administer REAL’s Alternative Proposal
PURA also sought comment on the following in the context of REAL’s proposal:
Provide specific redline edits to the ‘Next Cycle Rate Decision’ that would need to be adopted to resolve any perceived conflicts. See Decision, Dec. 19, 2018, Docket No. 14-07-19RE05, PURA Investigation Into Redesign of the Residential Electric Billing Format – Review of Summary Information, Implementation, and Display.
Provide specific redline edits to the ‘Variable Rate Definition Decision’ that would need to be adopted to resolve any perceived conflicts. See Decision, Nov. 5, 2014, PURA Establishment of Rules for Electric Suppliers and EDCs Concerning Operations and Marketing in the Electric Retail Market.
PURA originally established an Aug. 21 deadline for comments
OCC, with support from EOE, asked PURA to extend the comment deadline until September 4, 2025. Such request is pending.
