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Under Draft, Regulator Would Direct Staff To Propose Changes To Retail Supplier Contracts, Language To Comply With Rate Cap For Hardship Customers
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The Connecticut PURA has issued a proposed decision that would direct its Office of Education, Outreach, and Enforcement (EOE) to propose changes in retail supplier contracts to ensure such contracts comply with a statutory rate cap for hardship customers, with PURA's draft not endorsing, at this time, any specific policy or contract changes to ensure compliance
Conn. General Statutes § 16-245o(m) provides that hardship and similar customers may only enroll onto an electric supplier contract for rates, "at or below the standard service rate for the duration of the contract[]".
Currently, compliance with the rate cap is achieved by the utility dropping a hardship customer to default service if the customer is served by a retail supplier at a rate in excess of default service
However, as previously reported, EOE and OCC argued that, while this process ensures that customers do not pay more than standard service, the mechanism does not ensure compliance with the statute's provision that hardship customers may only contract for a rate that is at or below the standard service rate for the duration of the contract
As previously reported, rather than dropping relevant hardship customers to default service, EOE favors a policy requiring retail suppliers to continue to serve hardship customers, at the capped default service rate, if the default service rate becomes lower than the contracted rate during the term of the contract
EOE has also argued that retail suppliers are prohibited from refusing to serve hardship customers as a means of compliance with the rate cap. EOE has cited Conn. Gen. Stat. § 16-245r which provides, "No electric supplier shall decline to provide electric generation services to a customer for the sole reason that the customer is located in an economically distressed geographic area or the customer qualifies for hardship status under section 16-262c." [emphasis added]
See background details here
In a proposed decision issued today, PURA would find that retail supplier contracts should be "modified" to ensure compliance with § 16-245o(m), but PURA, under the draft, would not direct any specific changes to retail supplier contracts
In the draft order, PURA also did not opine on EOE's argument that retail suppliers may not refuse service to hardship customers as a means of compliance with the rate cap
Rather, the proposed decision would direct EOE to file a proposal for any appropriate changes to retail supplier contracts to ensure that, "financial hardship customers remain at or below the standard service rate throughout the duration of the contract term on a prospective basis."
PURA would direct EOE to consult with OCC and other parties in the proceeding prior to filing EOE's proposal, but the proposal would be a product from EOE, not the proceeding's working group. Additionally, PURA's draft does not contemplate or seek the filing of alternative proposals other than EOE's proposal
EOE would be required to file its proposal for modifications to retail supplier contract language by April 28, 2025
PURA's draft order also addressed several other matters raised in Phase 2 of the proceeding addressing appropriate limitations on supplier contracts (note that limitations for all customers, not limited to hardship customers, will be addressed in Phase 3)
During Phase 2, EOE had suggested that PURA review whether the Incidental Residential Account (IRA) designation remains appropriate.
PURA would decline to address the issue of IRAs at this time, as the issue was only raised during briefing. The draft order states that PURA lacks a full record to adjudicate EOE's and OCC's concerns about IRAs
Concerning REC-only "suppliers", PURA would affirm that REC-only suppliers meet the definition of a "supplier", and thus fall within the scope of § 16-245o(m)'s rate cap, which applies to contracts between hardship customers and suppliers
Moreover, based on the language quoted below, the draft order provides that a REC-only contract shall not result in a hardship customer paying more than default service for the customer's total supply (generation plus RECs), even if the REC contract itself has a cost less than default service
As such, PURA's draft order would essentially prohibit hardship customers from contracting with a REC-only supplier, since the cost from the REC marketer would be added to the default service rate, and thus the combined cost will always exceed the default service rate. REC-only marketers could still contract with a hardship customer served by a retail supplier, to the extent the REC-only cost and the supplier rate, combined, do not exceed the default service rate
Specifically, PURA's proposed order states that, "REC-only suppliers shall not have contract rates for hardship customers that would yield a rate greater than the standard service rate."
Although not explicit, PURA generally uses the term REC-only supplier to mean REC marketers which bill through the utility bill but which do not become the customer's load serving entity, under a program similar to the former Clean Energy Options program. In a prior order, PURA previously held that such REC-only marketers fall within the statutory definition of supplier
Docket 18-06-02RE02
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REC-Only Contracts May Not "Yield" Rate Exceeding Default Service For Hardship Customers (Essentially Would Ban Non-shopping Hardship Customers From REC Contracts)
February 13, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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