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PSC Orders That All Enrollments Must Be Under Dual Billing, UCB Not Permitted
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The Maryland PSC today ordered that all residential retail electric and gas enrollments effective January 1, 2025 and thereafter, and any renewals as defined below, must be billed under dual billing
Unless otherwise stated in this story, all provisions relate only to residential service
The PSC's order implements SB1 and its prohibition on residential POR. SB1 also includes a provision that it shall not disturb existing contracts. See more background here
Given the timelines faced by the utilities in developing a different form of UCB, the PSC said that it had "no alternative" to the PSC's decision which orders that dual billing is mandated for any non-grandfathered contract effective Jan. 1, 2025
Retail suppliers unable to perform dual billing for renewal customers must drop such customers to default service
For existing customers, any renewal will prompt a mandate that the supplier transition the customer to dual billing
Among other triggers, any change to an existing contract's term or price shall constitute a renewal, the PSC held
Furthermore, the PSC said that any existing month-to-month contract that automatically renews every 30 days constitutes a renewal and must be moved to dual billing upon expiration of the following monthly cycle
Additionally, the PSC said that any existing contract with a variable rate -- regardless of whether the term is monthly or is "open-ended" under which either party may terminate at will or with notice -- is, after January 1, 2025, deemed to be renewed upon a change in the contract's price or the expiration of the notice period, whichever comes first.
More directly, the PSC said that, "all residential choice POR UCB contracts with variable price/terms shall revert to dual billing no later than February 28, 2025."
After February 28, 2025, the only contracts that will be permitted to be billed under UCB, with POR, will be contracts which existed prior to Jan. 1, 2025 which have both a fixed price and a fixed term, and which have not met the criteria for being defined as a renewal after January 1, 2025
The mandate for dual billing shall continue until the PSC develops a post-POR UCB mechanism, or until supplier consolidated billing is implemented
UCB with POR will continue for an interim period for grandfathered contracts (existing prior to January 1, 2025) which must have both a fixed price and a fixed term to be eligible for grandfathering
The PSC also set an end of December 31, 2025 for UCB with POR for such grandfathered contracts
Additionally, while the PSC's order seems clear that only UCB with POR for these grandfathered contracts shall end as of Dec. 31, 2025 (with the contract able to continue under dual billing), an ordering paragraph could be read as requiring that the entire contract shall be terminated
Specifically, the PSC ordered, "that all fixed-price/fixed-term POR UCB residential choice contracts shall end on December 31, 2025."
The PSC did observe that it believes that most fixed contracts are at most 12 months in length and thus should naturally roll-off grandfathered status by December 31, 2025.
The PSC declined to set a date certain for implementation of a post-POR form of UCB, citing what the PSC termed "tepid" interest from retail suppliers in implementing supplier consolidated billing.
The PSC expressed concern about unrecovered costs for developing a post-POR form of UCB if retail suppliers do not use the new UCB mechanism
Moreover, in light of the fact that the PSC has not mandated a date certain for a replacement form of UCB without POR, the PSC held that utilities are not "required" to offer "any" utility consolidated billing as of January 1, 2026
The explicit language in such direction from the PSC was not expressly limited to residential service
Specifically, the PSC said, "The Commission therefore directs that as of January 1, 2026, Maryland utilities are no longer required to provide any UCB service to third-party suppliers."
While the PSC has set a sunset date for UCB, the PSC did order utilities and retail suppliers to negotiate in "good faith" concerning all forms of billing in a post-POR world: dual, UCB, and supplier consolidated billing
The PSC opined on several mechanics of such future UCB, without ordering any specific implementation and, again, subject to the PSC's proviso that utilities are not required to offer UCB after Dec. 31, 2025, absent further Commission order
Specifically, the PSC endorsed the use of a payment processing hierarchy for UCB without POR, similar to the pre-POR process used by the utilities. While the PSC did not set forth the specific payment waterfall, generally, regulated charges will be paid first, and the PSC affirmed that a customer may not be disconnected for non-payment of retail supplier charges
The PSC said that suppliers and utilities are free to negotiate the use of a pro rata payment mechanism for UCB, in lieu of the posting hierarchy, as part of the post-POR discussions
The PSC said that SMECO had asked to end POR for all customers on Jan. 1, 2025, but the PSC denied this request, and held that SMECO remains subject to all provisions of the PSC's order
The PSC noted that there is currently no rule limiting late fees charged by retail suppliers under dual billing, and directed Staff to develop a proposal to "regulate" these late fees, and to recommend whether a cap should be applied
The PSC directed retail suppliers to provide 30 days notice to customers, "if possible", regarding either a change to dual billing, or drop to default service, as required by the order
The PSC waived various COMAR rules providing for UCB and POR or pro-rata in light of the PSC's decisions
Concerning incidental residential accounts, the PSC held that, in terms of the requirements and protections under SB1, a customer shall be deemed residential if the customer is "classified" as residential by the utility (presumably meaning on a residential service classification)
The PSC affirmed that the characteristic of use, rather than the organizational structure of the customer, determines rate classification and said, "the customer does not have the authority to dictate their classification."
The PSC said that the utility tariffs determine classification, and that the PSC will not at this time wade into the issue which should be addressed between a customer and the utility, in accordance with the tariff
Separate from POR, the PSC also addressed SB1's general ban on variable rate contracts
"[A]ll variable price or term contracts shall end no later than February 28, 2025," the PSC said
As noted above, the PSC deems a change in rate, even under an open-ended variable price contract, to be a renewal. Since a residential customer under SB1 cannot be renewed onto a variable rate, the PSC has essentially denied treating these existing open-ended variable rate contracts as an existing contract eligible for grandfathering under SB1
PC65, PC 65
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PSC Directs That Utilities Not Required To Offer "Any" Utility Consolidated Billing
December 30, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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