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PUCT to Limit Financial Prepaid Products to Existing Customers, Agrees on Prepaid Disconnect Balance
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Though not adopting a final rule at yesterday's open meeting, PUCT Commissioners reached consensus on several major aspects of rules regarding prepaid service under Subst. R. 25.498, including the availability of financial prepaid products after the amended rule's effective date, and the amount of the connection balance and disconnection balance for prepaid service (38675).
Most notably is that Commissioners agreed that financial prepaid products -- or those that rely on estimates of customer usage to deduct from the prepaid balance instead of a customer prepayment device or system -- may not be offered to new customers after the amended rule's effective date. This is a departure from the Staff recommended proposal for adoption which would have allowed financial prepaid products to be offered to new customers who do not have advanced meters.
Instead, Commissioners agreed that financial prepaid products shall only be allowed to continue for exiting customers served under the financial prepaid model, and only until those customers receive advanced meters. New enrollments onto financial prepaid service would not be permitted.
Customers served under the financial prepaid model would have to be transitioned to a prepaid product complying with amended Subst. R. 25.498 using a customer prepayment device or system within sixty days after an advanced meter being installed and provisioned as defined in the TDU Tariff. Notice of the transition to the customer, and the customer's ability to affirmatively select another product, would be provided consistent with Staff's earlier recommendation for the transition period (see 3/16).
Commissioners also agreed with a modification to Staff's recommended connection balance for prepaid service proposed by Commissioner Donna Nelson. Staff had recommended that REPs not be permitted to require customers to prepay in excess of $75 to initiate service.
Because certain charges associated with service initiation, such as priority Move-ins, in some of the TDU areas exceed $75, prohibiting REPs from requiring a prepaid balance in excess of $75 to initiate service could, in some cases, result in the prepaid balance being exhausted before the customer even consumes energy, placing them in danger of disconnection. Accordingly, the Commission will alter the connection balance such that a REP may not require a connection balance in excess of $75 plus applicable TDU fees, if any.
Commissioners noted that at Oncor and CenterPoint, the discretionary charges associated with initiation of service are gradually being zeroed out under their advanced metering deployment plans, and noted that the modification to the connection balance amount will be most applicable in other areas where the charges remain higher, and prepaid service is accomplished through a prepayment device other than an advanced meter.
For the disconnection balance, below which the REP may initiate disconnection of prepaid service, Commissioners agreed to set the balance at $10. Commissioner Donna Nelson had argued for a higher balance, such as $25, to reflect situations where weather-related moratoriums on disconnections may cause the customer to consume several days worth of energy prior to disconnection.
However, Chairman Barry Smitherman said that the rule should be written such that, under normal circumstances, the disconnection balance should not result in a customer being disconnected with a positive balance, which could occur using a higher disconnection balance such as $25 in situations where there is no disconnection moratorium. Smitherman said that it would not be equitable, and that it would be a "PR nightmare," for the rule to result in customers with significant positive balances to be disconnected. Commissioner Kenneth Anderson agreed.
Commissioners also agreed not to limit any fees charged by REPs under prepaid service (disconnection, reconnection, payment processing, etc.) so long as such fees are clearly disclosed to customers.
Commissioners generally agreed that the Commission should develop a standard Prepaid Disclosure Statement listing all such fees that shall be provided to the customer at any time the customer is quoted a price for prepaid service, to permit an apples to apples comparison of rates and other charges. Staff will work with stakeholders on the specifics of the standard Prepaid Disclosure Statement and related requirements, and present a proposal at the April 6 open meeting, at which time the Commission intends to vote on a final order relating to amendments to Subst. R. 25.498.
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