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New Jersey Staff POR Proposal Retains Reversion to Dual Billing

March 4, 2013

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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Staff of the New Jersey Board of Public Utilities has issued to stakeholders proposed revisions meant to improve the Purchase of Receivables programs, but which retain an eventual reversion to dual billing if the customer remains in arrears.

"It is Board Staff's position that a POR program with the following modifications will enhance competition in a fair and judicious manner," Staff said in its proposal.

Currently, New Jersey electric utilities offer POR but are permitted to cease providing consolidated billing and drop the customer to dual billing if the customer's account is more than 60 days in arrears. Gas utilities offer POR (in development at Elizabethtown Gas) but may cease providing consolidated billing and drop the customer to dual billing if the customer's account is more than 120 days in arrears.

Once a customer is reverted to dual billing, the retail supplier is responsible for its own account receivables associated with supply charges to the customer, and the utility will not offer utility consolidated billing to this customer for a 12-month period.

Board Staff recommends that the electric utilities and natural gas utilities be required to offer utility consolidated billing with POR to all residential and small to mid-sized commercial customers that the utility serves if the customer purchases supply from a third party supplier (TPS), and if the customer's account is not 120 or more days in arrears except as indicated below.

Board Staff recommends that the minimum number of days that an electric customer's account must be in arrears before an EDC providing consolidated billing to the customer may drop the customer to dual billing be increased from 60 days to 120 days.

"Board Staff does not believe that the utility companies should be required to assume a TPSs' account receivables indefinitely. However, Board Staff recognizes that the EDCs' current policy of dropping customers to dual billing when the customers are in arrears for 60 days can be problematic for some customers. A customer with a good payment history can easily have the account fall 60 days in arrears, causing the customer to be dropped to dual billing. In addition, as TPSs are unaware of a customer's payment history when they sign up a customer, a customer's account can often be close to 60 days in arrears, and fall 60 days in arrears shortly after switching. This can cause a switching customer to be immediately dropped to dual billing. As many TPSs do not offer dual billing, under current practices, this customer may be returned to utility supply service for a period of 12-months. Board Staff's proposal to modify the criteria for dropping an electric customer from consolidated to dual billing from 60 to 120 days will assist in alleviating this problem," Staff said.

Board Staff also recommends that the utilities' current practice of refusing to offer utility consolidated billing to customers who have been assigned to dual billing within the past 12 months be eliminated except for those customers whose accounts are in arrears as detailed below.

Under the Staff proposal, the utility would not be able to deny UCB/POR to a customer that has been dropped from UCB/POR to dual billing within the past 12 months if the customer makes payments that bring the relevant account to the point where it is not 90 or more days in arrears. "This will allow a customer who is working on eliminating their arrearages to shop for their energy supply. Requiring that the customer bring their account to the point where it is not 90 or more days in arrears rather than 120 days will help avoid situations where the customer gets switched back and forth between UCB/POR and dual billing, or in the case where the TPS does not offer dual billing, between UCB/POR and the utility's supply service," Staff said.

Board Staff recommends that utility consolidated billing be used to collect only commodity charges, and should exclude any service charges, exit fees, early termination fees, or charges for products other than commodity. The POR would be offered in concert with consolidated billing. Thus, all customers enrolled in consolidated billing would be enrolled in the POR program, Staff said.

Board Staff recommends that there be no creation of, or increase to, discount factors or fees that a utility may charge for consolidated billing or purchase of receivables as a result of implementation of the proposed modifications to the POR mechanism described above. "This does not preclude the utilities from seeking creation of these charges or modification of these charges within a rate case proceeding," Staff said.

Board Staff proposes to maintain current payment timelines under POR, including:

a) JCP&L, ACE and PSE&G continue to pay TPSs five days after the due date shown on the customer's bill,

b) NJNG continues to pay TPSs bi-monthly,

c) SJG continues to pay TPSs 5 days after the end of each calendar month, and

d) RECO continues to pay TPS on the 25th of each month.

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