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Maryland Staff Seeks Cessation of Billing for Any Non-Volumetric Charges Through POR
July 7, 2011
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The Maryland PSC should direct electricity suppliers to, "immediately cease billing any and all charges that are not billed using a kilowatt-hour ('kWh') rate via utility consolidated billing," PSC Staff recommended in reply comments concerning the inclusion of early termination fees in Purchase of Receivables.
While Staff's comments were directed at early termination fees (and include various other non-commodity services such as HVAC plans, etc. whose POR billing is not in dispute), the sought blanket prohibition on placing any charge not billed using a kWh rate could implicate other legitimate "commodity" charges associated with full requirements supply (notably, if a supplier elects to recover administrative/customer service costs via a flat monthly customer charge rather than including it in the volumetric rate).
Furthermore, Staff recommended that the PSC find that early termination fees (ETFs) are not a commodity covered under the use of POR, and that early termination fees purchased under POR, "were not done so in accordance with utility tariffs."
"Staff recommends that the Commission find that ETFs are not commodity charges. This determination is the most clear and straightforward interpretation of the word 'commodity' and also eliminates the need for any special treatment of these charges as a POR item. Suppliers have not demonstrated significant harm to the Electric Choice program in Maryland from this resolution of the matter," Staff said.
Staff said that it is not aware of early termination fees that are set according a customer's energy usage, "which might lend more credence to the idea that ETFs are directly related to the commodity sold."
"Staff recognizes that Suppliers' hedging costs are valid concerns; however, there may be other ways to price ETF risks into retail contracts. By defining ETFs as commodity, ultimately those charges would subject a customer to the compulsion of payment by termination of service. The use of termination is not necessary to accomplish proper pricing. For example, retailers have the ability to tailor their offerings to account for different customer needs and desires," Staff said.
Additionally, Staff said that the Commission should clarify that any changes to the POR systems of utilities, resulting in incremental costs if made by the utility, would be recovered by the utility through the POR discount rate, unless otherwise arranged mutually between the utility and a supplier. Staff said that the PSC should direct the Supplier Coordination Working Group to address the matter of changes to POR for additional billing functions as desired by suppliers.
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