Maryland PSC Approves Supplier Consolidated Billing Regulations

March 10, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Maryland PSC today, in a 4-1 vote, approved regulations to implement and govern supplier consolidated billing (SCB) for electricity and natural gas.

The regulations will be published in the Maryland state register and subject to a notice and comment period under such process

Commissioner Mindy Herman dissented, expressing concerns about the SCB pro-rata payment posting mechanism leading to greater disconnections

Commissioner Anthony O’Donnell, who voted to approve the SCB regulations, warned suppliers that the PSC will engage in strict "scrutiny" of suppliers with respect to SCB, in licensing and practices

Aside from one change noted below, the PSC approved Staff's proposed March 8 language for the SCB regulations, which are discussed and linked at the bottom of this story

Due to the time it took to go through the rulemaking process, it is expected that the earliest SCB could be implemented is the end of 2023 or early 2024

Much of the major policy decisions and mechanics of SCB had been addressed in previously reported rulemaking sessions

Previously adjudicated highlights include:

• The approved language does not include a definition for the term "commodity"

• For a bundled supplier product, while the supplier does not need to unbundle and list a specific commodity rate in marketing and similar materials, the supplier must, upon the customer’s request, provide the approximate commodity and non-commodity portions of the price

• A pro-rata payment posting order that treats supplier commodity and utility charges of the same age on a pro rata basis, as further described in our prior story here

• As part of the pro rata posting process, if a supplier’s commodity charge is bundled with non-commodity charges, and the supplier is unable to separate the commodity and non-commodity prices, the supplier shall consider the bundled charge as a non-commodity charge for the purpose of payment posting.

• SCB suppliers must obtain a separate license to such effect from the PSC. A supplier seeking to be licensed to provide supplier consolidated billing shall provide and maintain bonding or financial guarantees with the Commission in the amount of $500,000 (though suppliers may petition for a lower amount)

• A supplier providing supplier consolidated billing services shall make a customer’s bill available to the utility in an electronic format.

• Customers received energy assistance funds will be excluded from SCB under it initial implementation (discussed further below)

At a rulemaking session today, the PSC adjudicated six remaining items as follows:

Bill Adjustment for Supplier Charges

The SCB work group proposed regulations that govern the process for a supplier to issue a rebill to customers in response to the Commission guidance in the Order implementing SCB that customers shall be provided the same customers protections for SCB as customers experience today for UCB, unless there was a justification to deviate from the standards. The rules were structured to govern bill adjustments driven by a utility or a supplier providing SCB.

The Commission had two concerns with this proposal. Commissioner Herman had a legal concern that this provision would result in the Commission litigating a customer’s contracted price with the supplier where the supplier billed a rate different than what was in the contract. This would be of great concern where a contract does not list a specific price, such as a variable rate.

Commissioner Odogwu Obi Linton made a statement that the solution of bill adjustments only pertained to the transfer of data from the utility to the supplier such that a bill adjustment customer protection was not necessary because the utility is the entity predominantly driving bill adjustment. Under this hypothesis the utility would calculate the appropriate charges to bill the customer such that the supplier would not need to be told how to modify a customer’s charges during a bill adjustment.

The PSC adopted Staff's proposals to address these two issues

In response to Commissioner Herman’s legal question, Staff said the PUA gives the Commission legal direction and authority to establish rules that (1) protect customers from abusive practices, (2) establish requirements and limitations relating to deposits, billing, collections, and contract cancellations, and (3) establish procedures for dispute resolution. Additionally, regulations for bill adjustments today anticipate that a mistake could occur during billing unrelated to meter reads. It would be within the Commission’s jurisdiction to set rules to govern this process so that customers are informed and protected if a supplier is not appropriately billing the customer. Staff said that the Commission does not regulate a supplier’s price and should avoid being involved with a dispute in which the contract does not specifically state the price to customers.

Therefore, Staff proposed a regulation such that a supplier cannot issue a bill adjustment unless the supplier has previously disclosed the price to the customer. This should ensure that a bill adjustment can only be made for rates about which customers have information.

The PSC approved Staff's proposed regulation that, "A supplier may not issue a bill adjustment for an undercharge if the price used to calculate the bill adjustment was not previously disclosed to the customers by contract or as required in COMAR 20.53.07.13."

In response to Commission Linton’s statement that it may not be necessary to include in COMAR a prescribed bill adjustment customer protection because the utility will be sending the charges, Staff still believes it is appropriate to include a solution for suppliers to follow if the supplier inappropriately bills a customer. This could be because the supplier applied a rate different than the one contained in the contract with the customer. Other reasons include that the supplier received the correct usage from the utility but misapplied it, or various other reasons where the supplier issued a bill but then determined there was an error. Additionally, even if the undercharge is driven by a utility misreading a meter the utility will not know what the supplier charged. This means the utility will not know the appropriate limit to apply to the utility’s charges since the utility regulations followed today do not distinguish between distribution and commodity charges.

The PSC adopted Staff's preferred means of addressing this issue, which is to accept the proposed regulations for customer protections that mirror current rules for utility billing of an under charge.

Specifically, under the approved language, if the total undercharge is more than 35 percent of the customer's average monthly bill during the most recent 3 months of service with the supplier, the customer shall be allowed to enter into an installment plan to pay the total retroactive billing, without interest

"This gives the customer the same level of protection as the customer enjoys today under utility billing," Staff noted

SCB Supplier Call Center Metrics

The PSC approved the previously reported call center metrics for SCB suppliers as contained in the proposed language.

The Commission had asked that Staff to provide a citation for the Commission’s statutory authority to dictate call center metrics. Staff believes that PUA Sections 7-507(e) and 7-511 give the Commission this authority, the PSC adopted Staff's proposed language requiring SCB call center metrics.

Definition Of Price to Compare

The proposed SCB regulations require the supplier to provide price to compare information on SCB bills, but there is no definition of price to compare in COMAR or statute. The PSC addressed this issue by using a new term in the SCB regulations for the listing of utility supply pricing: "Supply Price Comparison Information", which is defined to mean, "the rate and language that the Commission may require to be printed on a customer’s bill to permit the customer to make meaningful comparisons between competitive supplier prices and the price for standard offer service or sales service provided by the customer’s utility."

Exclusion Of Energy Assistance Customers From SCB

While the proposed regulations generally exclude customers receiving energy assistance from SCB (until a phase II proceeding), Potomac Edison expressed concern that, due to certain mechanics, the proposed language would not include customers in universal service protection program (USPP), though that is not the intent of the proposed language.

The PSC agreed to revise the language to explicitly provide that a USPP customer shall not be included in SCB

The approved language now states that a utility shall reject a customer’s enrollment into supplier consolidated billing if, at time of switch:

(1) The customer has a regulated electric utility arrearage older than 30 days;

(2) Is on a payment arrangement plan with the utility; or

(3) A customer has applied for or is receiving funds from the Office of Home Energy Programs, including but not limited to, payments authorized as part of the Electric Universal Service Program, Maryland Energy Assistance Program or enrolled into the Utility Service Protection Program.

Licensing Certification

The proposed regulations contain a certification that a person seeking a license to become an SCB supplier will comply with all laws and regulations pertaining to a customer’s bill that contains both regulated and retail energy charges.

Suppliers had expressed concern that the proposed language was duplicative of similar language elsewhere in the regulations; however, the PSC elected to adopt the proposed language

Specifically, the approved language requires, "Certification that the applicant will comply with all laws and regulatory requirements for Maryland bills that contain regulated utility charges and retail energy charges."

Definition Of Supplier Consolidated Billing

A Commissioner during an earlier rulemaking session had raised concern with whether the definition of Supplier Consolidated Billing under the proposed rule would conflict with any existing statutory definition. Staff confirmed that the term Supplier Consolidated Billing is not currently defined in statute. Under the approved SCB rule language, "Supplier consolidated billing" or "SCB" means, "a form of competitive billing service in which a gas or an electricity supplier is authorized by the Commission to render a bill to a retail gas or electric customer that includes both the supplier charges and the gas or electric company’s regulated charges."

The approved SCB rule language will mirror the language in Staff's March 8 proposal, with the exception of adding the term "Utility Service Protection Program" to the universe of customers excluded from SCB.

Staff's March 8 proposed SCB rule language, which was adopted aside from this addition, may be viewed here

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