Regulator Issues Draft On Implementing Change In Law Regarding Hardship Customers' Shopping Eligibility

Draft Interim Order Would Not Require Suppliers To Serve Customers Below Supplier's Cost

March 28, 2024

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Connecticut PURA has issued a proposed interim decision that would address the requirement in General Statutes § 16-262o(m) allowing certain customers (generally hardship and similar customers) to enroll with an electric supplier provided that the supplier's rate is at or below the EDC’s standard service rate.

PURA's draft narrowly addresses the question of the EDCs' compliance with the revised statute allowing hardship customers to shop, at a rate that does not exceed the default service rate, and does not specifically address a broader question in the proceeding concerning the "appropriate limitations" (if any) with which all customer contracts with electric suppliers, entered into on and after a determined date, must comply

As such, it is noted that PURA's proposed decision is a labeled as a proposed interim decision, implying that the proposed decision would not resolve in toto the investigation under Docket 18-06-02RE02 and that further action should be expected

See more background on the "appropriate limitations" investigation here

PURA's draft would approve the previously reported EDCs' proposal on hardship customer shopping, which generally would automatically move shopping customers back to default service upon such a shopping customer becoming a hardship customer, if the customer's rate exceeds the standard service rate

PURA's proposed interim decision does not specifically address proposals from certain parties that would require suppliers to resume service to the customer, at the original rate, if the default service rate later increases above the supplier rate.

PURA's Office of Education, Outreach, and Enforcement (EOE) had also proposed that rather than moving hardship customers to default service, suppliers should instead be required to continue serving hardship customers at a capped rate not exceeding standard service (e.g. changing the supplier's contracted rate, see background here). Though the draft interim decision does not discuss EOE's proposal, the draft necessarily rejects this approach in proposing to adopt the EDCs' proposal, which moves applicable customers back to standard service

In adopting the EDCs' proposal, the draft would necessarily not adopt EOE's argument that, due to non-discrimination language in statute, suppliers cannot refuse service to hardship customers, and thus suppliers must be required to enroll hardship customers if so desired by the customer, with the supplier's rate capped at the standard service rate. In contrast, the EDCs' proposal that would be adopted under the PURA draft would have the EDCs reject any enrollments for a hardship customer where the enrolled rate exceeds the standard service rate

As summarized by PURA in the draft, suppliers will be able to obtain information concerning customer contracts that are at or below the standard service rate. Suppliers will receive information concerning the hardship status of current or prospective customers under changes to the EDC’s electronic data interchange systems.

For existing customers, the EDCs will send the supplier a notification when a customer becomes coded for hardship.

The EDCs will reject enrollment requests for hardship customers if such a request is to enroll at a rate higher than standard service.

The EDCs will monitor supplier rates charged to hardship customers on a daily basis and will, "return customers to standard service if the supplier is charging the hardship customer a rate that is above the standard service rate."

The monitoring will initially be a manual process for Eversource, and UI will do so, "by running a nightly query to monitor rates."

Eversource estimates the technical changes to automate the hardship rate monitoring will take 6 months with estimated total costs of approximately $600,000. UI estimates that the costs associated with compliance with General Statutes § 16-245o(m) will total $32,000, and UI anticipated any changes in implementing the EDCs’ Proposal would be completed in approximately two weeks.

Statute explicitly requires that, "Any billing system costs incurred by an electric distribution company to comply with this section shall be recoverable from all licensed electric suppliers."

In the draft, PURA states, "The Authority reminds the Companies that the burden of demonstrating prudently incurred costs to make IT changes rests with each company. The Companies will need to provide sufficiently detailed cost information and evidence to demonstrate prudency, including, but not limited to, evidence that: (1) reasonable competitive procurement processes were held, as applicable; (2) existing internal resources were leveraged to the extent possible; (3) investments in new resources were selected with current and future investments, programs, and public policies in mind; and (4) unnecessary costs were avoided. For the avoidance of doubt, the Authority is not pre-approving the costs associated with the billing system changes."

The draft directs the EDCs to provide info concerning suppliers serving the residential market and their market share, suggesting that PURA may assign costs to retail suppliers based in whole or in part based on residential market share, though the draft itself makes no decision on cost assignment

Under the draft, the Authority would direct each EDC to file a motion itemizing any costs for which the EDC seeks recovery along with supporting documentation.

"The EDCs shall include with each of their respective motions a list of licensed suppliers serving residential customers in their territories as of the date of the motion filing, the number of residential customers served by each supplier, and their most recent twelve-month residential [kilowatt hour (kWh)]," the draft states

Docket 18-06-02RE02

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