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PUCT Staff Proposal for Adoption Would Allow Continuation of Financial Prepaid Products for Customers Without Smart Meters
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March 16, 2011
A PUCT Staff proposal for adoption regarding prepaid service would allow REPs to continue to offer financial prepaid products to customers without advanced meters until such customers receive provisioned advanced meters (38675, 2/18).
Staff's recommendation would otherwise require prepaid service to customers with advanced meters to conform to the amendments to Subst. R. 25.498 by October 1, 2011.
Under the financial prepay model (also known as advance pay), REPs rely on estimated usage to deduct charges from the prepaid balance. An original proposal in the project would have eliminated financial prepaid products entirely.
Under Staff's preamble, the Commission would conclude, "that once a customer has an advanced meter, financial prepaid service should be prohibited, and the REP should rely on the actual usage data provided by the advanced meter rather than an estimate of usage."
"Nevertheless, a substantial number of customers currently take financial prepaid service, which indicates that it is a desired service in the absence of CPDS [customer prepayment system or device]," Staff's preamble continues, and Staff would allow a REP to provide financial prepaid service to a customer until an advanced meter can be used to provide service to the customer.
The proposal for adoption would require that a customer served by a financial prepaid product shall be transitioned to a product that complies with the amended 25.498 within sixty days after an advanced meter being installed and provisioned as defined in the TDU Tariff. The REP would be required provide the notification no sooner than 60 days and not less than 30 days prior to the termination of the customer's current prepaid product, and required to inform the customer that they will be transitioned to a new product if the customer does not make an affirmative election for a new product within that timeframe, with the Electricity Facts Label and Prepaid Disclosure Statement for such product included with the notice.
Staff's proposal for adoption also addresses the issue of a minimum balance for prepaid service by bisecting the issue into a separate connection balance, and a disconnection balance.
The connection balance, or minimum prepaid amount to initiate or reconnect prepaid service, could not exceed $75 under Staff's recommendation.
The disconnection balance, for which Staff has not provided a recommended amount (leaving such to the Commission), would be an account balance below which the REP may initiate disconnection of the customer's service. The disconnection balance would be set at an amount lower than the reconnection balance to recognize that non-recurring costs related to a new or reconnected customer do not apply to a customer who has previously paid the connection balance.
Staff's proposal for adoption would require REPs to provide a warning to the customer at least one day, and not more than seven days, before the customer's current balance is estimated by the REP to drop to the disconnection balance. An earlier draft would have required at least three days notice.
Staff would not prohibit a REP from charging a customer for making a payment, because a REP may incur costs in receiving and processing payments. Staff would also not impose any limitations on other fees (e.g. reconnection, etc.) charged by REPs in connection with prepaid service.
The required Summary of Usage and Payment (SUP) would be required to list the average price in cents per kWh for electric service for each calendar month included in the SUP, reflecting the total of all fixed and variable recurring charges, and not including state and local sales taxes, reimbursement for the state miscellaneous gross receipts tax, and any nonrecurring charges or credits.
Staff's recommendation concludes that a REP should be required to offer deferred payment plans to prepaid customers where a customer's account reflects a negative current balance of $50 or more during an extreme weather emergency, in particular circumstances related to a state of disaster, and where a customer has been underbilled by $50 or more for reasons other than theft of service.
Customers would have to consent to the deferred payment plan, and could not automatically be placed onto one. REPs would be allowed to place a switch hold on customers entering into a deferred payment plan.
A REP would be permitted to initiate disconnection of service if the customer does not meet the terms of a deferred payment plan or if the customer's current balance falls below the disconnection balance, excluding the remaining deferred amount, provided the minimum one-day notice for disconnection was provided to customers outlined above.
The proposal for adoption allows the use of estimated TDU charges where advanced meter data is not available under the prescribed timeline, with such charges reconciled within 72 hours of receipt of actual data.
Staff said that the Power to Choose site would be updated to allow customers to filter the available product by prepaid service, similar to the current filters for fixed, indexed, variable, and renewable. Staff did not recommend using a separate complaint scorecard for prepaid service as recommended by consumer advocates.
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