Texas Retail Electric Provider Seeks Declaratory Order Concerning Levelizing Prepaid Customers Account Balance

November 21, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Pogo Energy filed with the Public Utility Commission of Texas a petition seeking a declaratory order concerning the construction of Substantive Rule 25.498(a) as it relates to a proposed offering of a levelized payment option for prepaid service

Pogo said that it, "is in the process of developing a proposed service plan that customers could opt-into or opt-out of at any time, without restrictions, and would operate on a daily basis to level (or smooth) the impacts to a customer's prepaid account balance."

"Under this plan the customer would be billed each day for actual usage consistent with § 25.498, and a post-billing adjustment (leveling payment plan) would be applied to smooth changes to a prepaid customer's billing account. (Absent such smoothing, daily charges can vary by as much as 400%.," Pogo said

Pogo said that, "Pogo has had several discussions with the Staff of the Public Utility Commission ('Commission'), including the staff from Oversight and Enforcement, and Commission staff have repeatedly expressed the view that the proposed service plan is inconsistent with § 25.498(a) and the preamble to § 25.498, as adopted in 2011."

"Pogo Energy contends that this construction of the rule is incorrect, and § 25.498(a) does not prohibit a REP from offering a level or average payment plan to its prepaid service customers," Pogo said

Pogo said that the provision of § 25.498 relating to level and average billing relieves prepaid REPs from any obligation to offer level or average billing; it does not prohibit them from offering such billing plans.

Pogo said that the relevant language from § 25.498 is as follows: The following provisions do not apply to prepaid service, unless otherwise expressly stated: (1) §25.479 of this title (relating to Issuance and Format of Bills); (2) §25.480(b), (e)(3), (h), (i), (j), and (k) of this title (relating to Bill Payment and Adjustments)

"Thus, § 25.480(h), which requires post-pay REPs to offer level or average payment plans, does not apply to prepaid service. Section 25.498(a), however, does not expressly prohibit a prepaid REP from offering a level or average payment plan. Section 25.498(a)(2) is not phrased as a prohibition of particular REP conduct, but as the inapplicability of a different section of the customer protection rules," Pogo said

Pogo said that, elsewhere in § 25.498 where the rule intends to prohibit particular REP conduct in prepay products, the language chosen is explicit. Pogo contrasts such language concerning various prohibited behaviors with the language concerning level payment plans, as the explicit prohibition language is absent in the language concerning the applicability of levelized payment plan terms to prepay service

Pogo said that the preamble to the rule addressed (and rejected) a proposed requirement that would have compelled REPs to offer a levelized payment plan to prepay customers, and not a situation where a REP voluntarily elects to offer a levelized payment plan to prepay customers

Pogo said that its proposed plan is not a financial prepaid plan, as the term is defined in the rule, because Pogo would use data obtained from the TDUs' advanced meters on a daily basis to determine consumption and calculate charges.

"The service Pogo proposes to offer is neither a financial prepaid service nor is it a monthly, prepaid levelized plan as described by TLSC/TX ROSE [as discussed in the rule's preamble]. Pogo relies on actual daily consumption information from the TDU's advanced meters to calculate customers' obligations and would do so for customer that elect its proposed new service option. As discussed above, TLSC/TX ROSE suggested that the Commission mandate a monthly levelized payment plan, and in response to this comment the Commission concluded that it should not "impose a levelized payment option for prepaid service." The plan that Pogo proposes is different: Pogo proposes billing customers each day based on each customer's actual consumption. At the customer's sole discretion, they may opt-in to have their prepaid service account balance adjusted based on a rolling average of actual use, to smooth (or level) their payment obligations, with absolutely no restrictions (such as a switch-hold) placed on the customer's account. Lastly, even though Pogo does not plan to offer the plan requested by TLSC/TX ROSE, the Commission rejected the suggestion that a level or average payment plan be mandated for prepay REPs. It did not prohibit the use of such plans if they were otherwise consistent with the rule," Pogo said

Docket 50257

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