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Texas REPs Seek Removal of TDU Charges from Prepaid Disclosure Statement

July 25, 2011
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Several Texas retail electric providers have sought to eliminate the inclusion of TDU fees from the proposed Prepaid Disclosure Statement (6/13), claiming that the inclusion of such information will be confusing to customers (39357).

Specifically, the REP Coalition recommended removing the listing of TDU fees such as fees for Move-Ins, Out-of-Cycle Meter Reads, disconnections, and reconnections. The proposed Prepaid Disclosure Statement would require REPs to list either a range for each fee, or a maximum applicable amount.

"Utility fees apply to both prepaid and post-paid service. Thus, requiring disclosure of the specific dollar amounts of these fees in a document designed to inform customers about prepaid service could create a misimpression that the fees apply only to prepaid service, thereby discouraging customers from choosing this option, even if the service is right for them. As a result, the Proposal could create a false shopping point for customers who might be erroneously led to believe that a post-paid service would offer fewer or lower utility fees," the REP Coalition said.

Additionally, the REP Coalition noted that, even within a single service area, utility fees may vary widely given the type of customer meter (with costs for services for performed at premium locations much higher than standard meter fees). Accordingly, if REPs were required to list either a range of fees for a service, or the maximum charge, such amounts would be confusing to customers since most customers would be served under a standard discretionary charge and not the premium charge indicated in the disclosure statement.

The REP Coalition suggested stating on the Prepaid Disclosure Statement only that, "Utility fees may also apply."

However, this does not answer the concern of several Commissioners who, during the rulemaking for amended Subst. R. 25.498 (which requires the Prepaid Disclosure Statement), noted that, if not disclosed, TDU Move-In fees could consume the customer's initial connection payment, and subject the customer to immediate termination.

Texas Ratepayers' Organization to Save Energy and Texas Legal Services Center said that standard and priority TDU fees for Out-of-Cycle meter reads and Move-In and Move-Out transactions should be listed.

Furthermore, to provide the customer with the most accurate and least confusing information, Texas ROSE and TLSC said that the Prepaid Disclosure Statement should be TDU-specific, and REPs should not be allowed to use a single disclosure statement in all TDU areas simply listing a range of applicable TDU fees.

A subset of REPs, filing as the REP Group, opposed the overly prescriptive language of the Prepaid Disclosure Statement, and said that the Commission template for the Prepaid Disclosure Statement should (outside of a few sections where prescriptive language is appropriate) use illustrative language, such as used for the Electricity Facts Label.

"Because the market for prepaid electric service is beginning to gain momentum faster than regulations, it is difficult to know what prepaid service will look like as it continues to evolve. Even if it were possible to draft language that accurately applies to every prepaid product in the market today, it certainly is not possible to cover all scenarios for products that have yet to be designed. For these reasons, REPs offering prepaid service must have adequate flexibility in drafting a PDS for a specific prepaid product such that the PDS provides the customer with information that is most relevant to the product in question, in the clearest possible manner," the REP Group said.

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