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Prepay Electric Provider Seeks Declaratory Order from Pennsylvania PUC
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February 2, 2011
Empiric Marketing & Sales, LLC, which intends to offer prepaid electric generation
service in Pennsylvania, has petitioned the Pennsylvania PUC for a declaratory order
finding that provisions of 52 Pa Code § 56.17 do not apply to its prepaid service
(P-
Empiric Marketing & Sales, LLC does business as businessMODERN, and refers to itself in its petition as "Pay As You Go."
Pa Code 52 § 56.17 governs advance payments for residential utility service.
Among other things, § 56.17, which contemplates prepaid service offered through device which reads prepaid usage cards, requires the utility to furnish the ratepayer with an emergency backup card for additional usage of at least 5 days.
Additionally, § 56.17 limits prepaid service to an individual who has an annual household gross income greater than 150% of the federal poverty income guidelines.
"If the provisions of 52 Pa Code § 56.17 were to apply to Pay As You Go they would not be in a position to comply fully with the provisions as it is our belief that these regulations are only applicable to Electric Distribution Companies rather than Electric Generation Suppliers such as Pay As You Go. In addition the provisions of 52 Pa Code § 56.17 are not consistent with the business model of Pay As You Go," Empiric Marketing & Sales said.
Empiric Marketing & Sales also sought a declaratory order that it, "is an Electric
Generation Supplier as set forth in Section 2803 of the Public Utility Code, 66 Pa.
C.S. § 2803 and subject to the Commissions Regulations as set forth in 52 Pa Code
§ 54.31-
The mechanics of Empiric Marketing & Sales' offering are not entirely clear from its petition, but given the Pennsylvania market structure (notably the lack of any statewide standard for supplier consolidated billing), presumably the prepaid product would only be for electric generation supply, and not electric distribution services. This is consistent with Empiric Marketing & Sales' statement that when prepaid funds are exhausted, the customer would be dropped to POLR.
Empiric Marketing & Sales' offering would be based on advanced meter technology. Empiric Marketing & Sales stated that once a customer makes a payment through several methods (online, phone, contracted storefront vendor), "[t]he purchase is sent electronically to the EDC."
"Once confirmed, appropriate electronic instructions are sent to the customer's advanced
meter, continuing the flow of electricity in the case of a new purchase or continuing
service with newly remitted funds. The purchase is applied to the customer's web-
Customers would be notified when their remaining credit balance reaches critical levels, such as 72, 48, and 24 hours remaining before service "suspension" (meaning transfer to POLR), and consistent with any requirements established by the PUC.
"Unless overridden, when funds are exhausted the meter is sent a message to transfer the customer to POLR," Empiric Marketing & Sales said.
However, Empiric Marketing & Sales does not describe in its petition the timeline for transferring customers back to POLR. It is not apparent that Pennsylvania has
adopted any accelerated switching timelines for advanced meters, nor does Empiric
Marketing & Sales state that it would seek an out-
In the PPL supplier coordination tariff, for example, a drop to POLR service contemplates that the switch occurs on the next scheduled Meter Read Date, provided that notice of the drop has occurred 16 days before the drop. Even though advanced meters would be capable of producing interval data, the Meter Read Date is defined as the date on which PPL schedules a meter to be read for purposes of producing a customer bill in accordance with the regularly scheduled billing cycles of the company (which at this point remains monthly).
Additionally, 52 Pa Code § 54.123 states a supplier may not transfer a customer to default service, without the default service provider's consent, except (as relevant here) for "nonpayment by a retail customer for services rendered by the EGS," or, "upon the normal expiration of contracts."
Since the Empiric Marketing & Sales would cease generation service upon exhaustion of funds, the first condition seemingly would not apply. The second condition may apply depending on how the prepaid agreement is structured and whether the exhaustion of prepaid funds constitutes the "normal expiration of contracts."
Empiric Marketing & Sales states that its, "solution will allow full integration
to our trading partners, facilitating portability of customers from one retail provider
(EGS) to another, transfer notices for non-
Empiric Marketing & Sales does not describe how its solution will interact with current market rules and timelines, aside from the current advance pay rules under § 56.17. Nothing in the petition addresses enrollment/drop timelines or other issues implicated by prepaid service, such as the billing regulations for suppliers under 52 Pa. Code § 54.4 or § 56.
Although not explicit in establishing a monthly billing requirement, § 54.4, which also incorporates relevant provisions of § 56.15, contemplates a bill for postpay service, requiring the listing of a "due date," and the beginning and ending dates of the billing period.
Generally, suppliers are also subject to 52 Pa. Code § 56, where applicable. One of the provisions in Ch. 56 is § 56.21, which holds that the due date for payment of a bill may be no less than 20 days from the date of transmittal; that is, the date of mailing or physical delivery by the utility to the ratepayer. Though Ch. 56 is written with respect to residential utility service, suppliers must aver in becoming licensed that they will comply with the "standards and billing practices of 52 Pa. Code Chapter 56."
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