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PUCT Staff Seeks Commission Guidance on Threshold Prepay Issues
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February
18, 2011
PUCT Staff have asked that the Commission address several threshold policy issues regarding prepaid electric service at the February 24 open meeting to inform Staff's development of a formal proposal for adoption regarding revised Subst. R. 25.498 (Project 38675).
As first reported in Matters, a proposal for publication would, among other things,
limit prepaid service to products using a customer prepayment device or system (such
as an advanced meter), and prohibit so-
Staff attached what is essentially a discussion draft of the revised rules with its request, though the draft does not at this time represent a formal Staff recommendation on language for a proposal for adoption.
Staff sought guidance from the Commission on several threshold issues, including whether, and if so under what timeline, the Commission should prohibit advance pay products.
On this issue, the discussion draft reflects modifications from the proposal for publication. The proposal for publication would require all new prepay products to conform to the amended rule (and thus require use of an prepayment device or system) within six months of the rule's effective date, and would prohibit the renewal of an advance pay product after six months. However, it would allow existing advance pay product contracts to continue until the contract expires.
The revised discussion draft would instead require all customers on advance pay products to be transitioned to either a prepay product using a prepayment device or system, or a postpay product, by October 1, 2011.
Another issue on which Staff sought guidance was the imposition of a minimum balance for both the initiation of prepaid service and disconnection. The discussion draft retains the earlier provision allowing a minimum balance to initiate or reconnect service, not to exceed $75, but unlike the proposal for publication, only applies this threshold to residential customers, and not commercial customers.
However, while a minimum balance is permitted for establishing service, the discussion draft would not permit REPs to disconnect customers if the customer's account falls below the minimum balance, but is still above $0. This is a modification from the proposal for publication which would have permitted disconnection if the prepaid balance fell below the minimum balance but was not necessarily exhausted.
On a related issue, the discussion draft requires a REP to provide a warning to the prepay customer at least one day (rather than three), and not more than seven days, before the customer's current balance is estimated to drop below zero.
Staff also sought Commission guidance on potential limits for fees charged under
prepaid service, after consumer advocates sought various limits in comments (see
12/7). The discussion draft would prohibit any fees for transitioning from prepaid
to postpaid service (excluding deposits charged in accordance with other provisions
of the Subst. Rules), cancelling or discontinuing service, removing equipment and
switching to another REP, or otherwise ceasing to take prepaid service. However,
other fees, such as fees for making payments, would not be limited, though the discussion
draft would require REPs to itemize non-
Staff asked that Commissioners provide guidance on whether switch holds should be permitted for deferred payment plans entered into under a prepay product. The discussion draft would allow a switch hold to be imposed on customers entering into a deferred payment plan, which must be offered if the prepay customer accrues a negative balance of $50 or more resulting from periods when disconnection is prohibited (such as during an extreme weather emergency) or due to underbilling.
Aside from these threshold issues, the discussion draft also reflects modifications made in response to other stakeholder comments.
The discussion draft suggests that a REP may deduct funds from a prepaid balance based on estimated usage, from either the TDU or the REP's own estimate, if acutal TDU usage is not available under the timelines contemplated for the dissemination of smart meter data. However, elsewhere, in discussing permissible reductions to prepaid balances, the discusion draft only cites, "known charges and fees that have been incurred, including charges based on estimated usage provided by a TDU" (emphasis added). Though the allowance for REP-estimated usage is explicit elswehere in the draft, the quoted provision could be clarified so that it is not interpreted as only allowing esimated usage provided by a TDU.
In any case, REPs would be required to reconcile the charges based on estimated usage with charges reflecting actual usage within 72 hours of obtaining actual usage.
Additionally, the discussion draft clarifies that a REP may communicate certain information
required under the rule through the mail, in addition to e-
The discussion draft strikes language which would have required REPs providing prepaid service to offer customers, "a means by which the customer may make payments for service by phone, internet, or other means that can be accomplished at the customer's premises, or at a location no farther than five miles from the customer's premises."
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