Part 2.
PUBLIC UTILITY COMMISSION OF TEXAS
Chapter 25.
SUBSTANTIVE RULES APPLICABLE TO ELECTRIC SERVICE PROVIDERS
Subchapter I. TRANSMISSION AND DISTRIBUTION
2.
TRANSMISSION AND DISTRIBUTION APPLICABLE TO ALL ELECTRIC UTILITIES
16 TAC §25.211
The Public Utility Commission of Texas (commission) adopts
amendments to §25.211, relating to Interconnection of On-Site Distributed
Generation (DG), with changes to the proposed text as published in the October
6, 2000
Texas Register
(25 TexReg 10080).
The amendments are necessary to establish reasonable scheduling fees for DG
and remove other economic barriers to DG. The amendments: (1) require any
utility that owns and operates a distribution system that is not subject to
imbalance fees for wholesale transactions to provide banking services to operators
of distributed generation facilities until the Electric Reliability Council
of Texas (ERCOT) Independent System Operator (ISO) begins operating ERCOT
as a single control area; (2) prohibit collection of distribution-related
charges from an exporting customer; and (3) prohibit collection of transmission-related
charges from an exporting customer. The amendments also define the term "banking"
and change the reference to the "Office of Regulatory Affairs" in subsection
(o) to the "Electric Division" to reflect a recent organizational change.
Project Number 22540 has been assigned to this proceeding.
The commission received comments on the proposed amendment from American
Electric Power (AEP), Energy Developments, Inc. (EDI), Entergy Gulf States,
Inc. (EGSI), Reliant Energy (Reliant), Small Hydro of Texas, Inc. (SHOT),
Southwest Public Service Company (SPS), and TXU Electric Company (TXU).
The commission solicited comments on a series of questions posed in the
proposed rules. The comments on those questions as well as proposed revisions
to the rule, and the commission's responses thereto, are summarized below.
1. Do technical complications arise from installation of significant amounts
of distributed generation on a feeder? If so, please describe the nature of
these complications, with specificity on both the magnitude of DG installation
relative to feeder load and the potential impacts, and possible solutions.
Four utilities, AEP, EGSI, Reliant, and TXU commented that significant
amounts of DG on a feeder can cause both safety and reliability problems.
EGSI did not discuss specific problems that could arise from large amounts
of DG on a feeder, but noted that complications could be expected to vary
with the magnitude of the DG, the magnitude and character of loads on the
same distribution circuit and on other distribution circuits served from the
same or adjacent substations, and the character and capabilities of the distribution
and transmission systems serving a DG facility.
AEP discussed a number of specific problems that it believes can arise
from installation of large amounts of DG on a feeder. AEP argued that the
potential resolution of the specific problems identified by AEP is in the
actual interconnection of DG. DG customers should be required to comply with
the requirements of existing commission rules. A distribution feeder with
more generation than load is not a distribution feeder from a practical standpoint.
The most economical way to accommodate large amounts of DG would be through
use of dedicated lines and dedicated substations. This would remove the load
that is distributed along the line and the protection schemes could be designed
for the operation of DG as a priority. This would give the DG a greater chance
of being able to respond to system needs appropriately instead of being shed
from the system.
Reliant indicated that installation of significant amounts of DG on a feeder
could endanger public safety, reliability, and power quality. Each feeder
has inherent limitations on the amount of power it can support. The impact
of each DG facility depends upon the particular limitations of the feeder.
Therefore specific magnitudes of DG installations cannot be addressed without
the use of interconnection studies. Reliant also addressed specific potential
problems associated with significant amounts of DG on a feeder, as summarized
below.
TXU commented that as the aggregate amount of DG connected to a feeder
approaches the ten megawatt (MW) capacity limit of a feeder, the probability
of technical complications that can affect reliability and safety also increases.
In general, as long as the total amount of DG connected to a feeder does not
exceed the ten MW capacity limit of the feeder, there are solutions to these
problems that are not excessively costly because the ten MW limit corresponds
to the maximum load rating of a typical 12 kilovolt (kV) distribution feeder.
TXU also addressed specific potential problems associated with significant
amounts of DG on a feeder.
AEP and Reliant commented that restoration of service on a feeder with
multiple DG facilities will be complicated and take more time because of the
need to isolate the DG facilities to prevent backfeed. Manual switching may
be required to reroute the DG on the feeder if the output from the DG facility
is necessary to serve load on the feeder. AEP was concerned about how this
potential increase in service restoration times will impact its ability to
comply with commission requirements for feeder reliability. Reliant recommended
that this problem be remedied by installation of remotely controlled switches
at the DG sites so that these units can be disconnected from the feeder without
the necessity of personnel going to each individual DG site for both disconnection
and reconnection.
AEP, Reliant, and TXU commented that the presence of DG on a feeder impacts
available fault current. With multiple DG facilities, the fault current at
various points on the feeder can vary greatly depending on the location and
status of the DG on the feeders. If the available fault current is stable,
the system can be designed to operate properly. However, where DG is present,
the fault current level will vary with the status of the DG. In some cases,
this varying available fault current could lead to protective device miscoordination
and lower feeder reliability. The increase in potential fault current due
to increases in connected DG facilities may also exceed the fault interrupting
capability of various devices connected to the line, including customer-owned
equipment, resulting in damage of connected equipment. Reliant suggested that
this problem could be remedied through upgrades of underrated equipment identified
during the interconnection study.
AEP stated that voltage flicker may increase with increasing DG on a feeder.
Voltage flicker is a function of the frequency of occurrence and the magnitude
of voltage fluctuation. While individual DG units may meet voltage flicker
limitations, the combined voltage flicker from multiple DG units and other
flicker-producing loads may create objectionable levels of flicker on the
feeder.
AEP and TXU commented that DG on a feeder can increase the chances of the
feeder operating in an island mode when the feeder breaker or other sectionalizing
device has opened. A relatively small amount of generation connected to a
large load will quickly decay outside allowable limits of frequency and voltage
and be disconnected by relays. If the feeder has generation sufficient to
support the load, it may continue to operate resulting in an island which
could create safety problems. TXU suggested that hazards associated with this
potential problem could be remedied by changing operating procedures and installing
additional coordination equipment.
AEP, Reliant, and TXU commented that the presence of DG will affect the
load flow on a feeder and hence the voltage profile. Varying the amount of
DG on a feeder can create voltage regulation problems due to the higher feeder
voltage profile variation. With multiple DG facilities, the potential combinations
of feeder conditions may be extremely complicated to model. Reliant suggested
that this potential problem could be remedied by giving the transmission and
distribution utility (TDU) the ability to control all DG volt/var output through
System Control and Data Acquisition (SCADA).
AEP and Reliant commented that the presence of DG on a feeder will generally
affect reactive power flow. Multiple DG facilities on a feeder could create
reactive support problems. To remedy this problem, special filtering and/or
switching control schemes may be required. AEP recommended that DG interconnections
be subject to §25.51 regarding power quality concerns.
AEP commented that planning the appropriate capacity of distribution facilities
will have an added variable when significant DG is added. With some loads
served on a daily basis by DG, the ability to plan for handling load requirements
under different operational conditions becomes more difficult because the
load displaced by DG may become hidden to the distribution planner. This load
may then reappear on the system if the DG is taken out of service, either
temporarily or permanently. To the extent the distribution planner relied
on the DG, distribution infrastructure may be unable to support load if DG
is not available. TXU commented that multiple exporting DG facilities of significant
size on a feeder would increase the likelihood that the electrical current
flow in any particular section of the feeder will change direction depending
upon which DG facilities are operating at a particular point in time. When
this situation occurs, the feeder becomes a mini-network of different electrical
sources. Both utilities suggested that, to respond to a large penetration
of DG within its systems, a distribution utility would have to develop new
methods and tools to analyze the impact of DG. In addition, staffing levels
may have to be increased to properly plan for an increasingly complex system.
AEP commented that large amounts of DG can create the potential for negative
impacts on the bulk power system. These impacts can occur in the area of frequency
response and reactive response. DG complicates the process of determining
the amount of generation needed to respond to a loss of generation. Significant
DG penetration may require the operation of DG consistent with the Operating
Protocols being developed for the ERCOT ISO. Use of the ERCOT Protocols should
help avoid biasing the data that operators use to determine responsive reserve
levels. The cumulative effects of system disturbances on a number of feeders
would likely significantly impact the ability of the system to recover from
a sudden loss of generation.
AEP also commented that a separate but similar system impact could also
affect the system's ability to maintain voltage support during disturbances.
Just as real power is needed for the system when a large generator trips off,
reactive power (vars) is needed during system disturbances that create a voltage
drop. This deficiency can be localized and can be the result of a major transmission
line tripping off as well as a generator or a large reactive source such as
a shunt capacitor. The over and under voltage relays would disconnect the
DG units from the line resulting in a loss of an important source of real
and reactive power which could in turn lead to a major system outage.
Reliant commented that a significant amount of DG on a feeder may keep
the feeder energized after a short circuit has occurred. As a result, the
only power flowing on the feeder would be from the DG, subjecting the feeder
to abnormal voltage and frequency levels. Equipment located on the feeder
that is not owned by the DG may be susceptible to damage or malfunction. Reliant
suggested that to remedy this problem, the TDU should install transfer trips
on all DG units when the aggregate amount of DG on a feeder exceeds 50% of
minimum peak load to prevent DG power flow onto the feeder when a breaker
trips.
Reliant commented that significant amounts of DG can cause unnecessary
operation of additional TDU protective devices. TDU protective devices have
been coordinated for radial flow, not the type of backfeed that can occur
when a DG unit is located on a feeder. If power flows from the DG to a short
circuit, some protective equipment on the feeder might be exposed to current
levels not normally experienced. This would cause protective equipment to
operate, interrupting service to customers on sections of the feeder not actually
experiencing the short circuit. To remedy this potential problem, the TDU
should add more advanced protection schemes to the system to detect the actual
location of short circuit currents.
2. Do technical complications arise if DG exported to a feeder exceeds
total feeder load? If so, please describe the nature of these complications,
with detail on whether the relevant measure of feeder load is minimum, average,
or maximum load, and identify possible solutions.
AEP responded that technical complications do arise if DG exported onto
a feeder exceeds feeder load. Reverse power flow onto the substation bus would
require modification of the protective scheme and metering in most situations
because distribution systems have generally been planned, designed, and built
for radial configurations. Also, the voltage regulation scheme may need modification
for reverse flow. Flow will need to be within equipment and conductor ratings,
which would not normally be a problem. In rare situations, DG injected harmonics
could create problems with capacitor banks, static VAR compensation, and other
similar station equipment. Meters on distribution feeders are used to determine
present and future load requirements. The apparent load will be the load on
the feeder net of any DG. The metering is intended to monitor this net of
load and generation on the feeder may not register if net load is negative.
To rectify this problem, meters that measure load flowing in either direction
and the direction of flow may be needed.
EGSI commented that technical complications have the potential to be much
more severe when DG levels approach or exceed the load served by common facilities.
Because the DG would be expected to be a large contributor to or the controlling
factor for the severity of the complications, the majority of any mitigation
measures should be the responsibility of the DG. The primary solution to most
scenarios would be to curtail or significantly reduce DG operations as often
and whenever it is necessary to correct or alleviate the problems.
Reliant commented that the same problems as addressed in its response to
question 1 would arise if DG on a feeder exceeds feeder load. Reliant also
commented that DG may cause abnormal voltage levels outside of limits set
in the commission's rules on feeders served by the same substation bus.
TXU commented that the same problems as addressed in its response to question
1 would arise if DG on a feeder exceeds feeder load. The cost of solutions
escalates as the amount of exported DG increases. At some point, the only
solution is to redesign, reconfigure, and significantly upgrade the interconnected
feeder and possibly adjacent feeders at substantial cost. Also, since utility
upgrades do not necessarily eliminate potential damage to customer equipment
from excessive fault current, every customer on the feeder is potentially
subject to upgrade costs on the customer's side of the meter. The factors
that determine the upgrades on the distribution system needed to support DG
are not solely related to feeder load. Technical complications can exist at
all load levels on the feeder; however, the complexity and cost of solutions
generally increases as the total amount of DG on a feeder approaches the ten
MW design limit.
In its reply comments, TXU indicated that comments of others support its
view that provisions of the current rule limiting the capacity of DG facilities
to ten MW or less and allowing utilities to charge the DG customer for substantial
upgrades avoid most of the technical and operational obstacles that might
otherwise arise from DG.
3. Do technical complications arise if DG exported to all feeders served
by a common substation exceeds substation load? If so, please describe the
nature of these complications and possible solutions.
AEP commented that many of the complications addressed in its response
to question 2 would also occur for a substation with more DG connected than
load. When more DG is operating on a substation than load, an outage of the
substation transformer is an additional occurrence that would result in a
loss of generation to the system. This would usually not create system deficiencies
since transformer and substation bus failures would be random as opposed to
being associated with system disturbances. It could, however, create a need
to adjust system generation schedules.
AEP also commented that transmission and generation system coordination
would be affected since to the transmission and generation system, the substation
bus would be a generator. Generator buses are used to meet system requirements
under normal and adverse operating circumstances. These buses have unique
relaying systems and system load is not connected to a common bus with a generator
due to the operational requirements of a generator bus.
AEP commented that the most suitable resolution of this problem is to design
systems for interconnecting the generation in a way other than with the distribution
load. This would make the operation of the system feasible by making the generation
a viable source to the generation and transmission system. It would not detract
from the mission and ideals of DG since such an amount of generation will
have exceeded the load in an area anyway.
EGSI commented that technical complications would arise if DG exported
to all feeders served by a common substation exceeds substation load, as more
fully discussed in its responses to questions 1 and 2.
Reliant commented that the same complications stated in its response to
questions 1 and 2 may arise if DG exported to all feeders served by a common
substation exceeds substation load. In addition, Reliant commented that for
substations that have DG levels that exceed the substation load, the DG units
may continue to maintain transmission voltage during a short circuit on the
transmission line even after the transmission breakers have tripped. This
would prevent the transmission breakers from reclosing and would result in
a transmission line lockout instead of a momentary interruption. This situation
would result in a loss of service to several substations and their associated
customers. Reliant suggested that to solve this problem, the TDU should install
additional potential and relaying devices on the transmission side of each
substation transformer to trip the appropriate feeder breakers and disconnect
the DG.
TXU commented that the scenario posed in this question creates the most
difficult situation to handle and potentially the most significant and costly
problems for the utility distribution system. First, fault current interrupting
ratings of utility system equipment could be exceeded as could interrupting
ratings for some customer-owned equipment for customers located close to the
substation. Second, phasing problems could occur if DG were to remain on line
during a disturbance and the feeder breaker were to cycle open and reclose
back in with the DG out of phase, likely causing damage to DG equipment.
TXU also commented that safety problems could arise from delays in breaker
and recloser operations due to the DG backfeeding various devices. Coordination
of the feeder protection system can become very difficult, if not impossible,
in some cases. And, the presence of exporting DG on a feeder has the potential
to adversely interact with substation load tap changers which function as
automatic voltage regulators to maintain acceptable feeder voltage under varying
system operating conditions. Under the condition posed in question 3, it is
possible that automatic voltage control would have to be forgone because of
the need to lock down the load tap changers to prevent such interactions.
This could result in a loss of automatic voltage control and adversely affect
the system voltage and connected equipment.
TXU further commented that DG export feeding back into the transmission
system poses problems due to the loss of ground reference through the substation
transformer. This loss of ground reference results in a failure of communications
between the transmission breakers and the DG that could result in the DG energizing
the transmission system in a fault situation. In this condition, public safety
could be severely compromised. Also, this loss of ground reference could destroy
lightning arresters on the transmission system and voltage instability problems
may exist with multiple DGs in operation.
TXU commented that to solve the potential problems associated with the
condition posed in question 3, a number of steps would be necessary: replace
the substation transformer; replace the substation bus with a higher rated
bus; replace the substation breakers with higher rated breakers; replace the
protective equipment on the feeders with higher rated equipment; provide transfer
trip capabilities for all DG; make major modifications to the substation load
tap changers to operate them in the proper manual mode; advise other customers
that their circuit breaker ratings may have been exceeded; and make operational
changes within the utility system to guard against possible phasing problems
by insuring that the DG is taken off-line when necessary. TXU noted that these
steps would be extremely costly.
4. Is there a market-related need to limit the amount of energy that a
particular customer can export to the distribution system as a percentage
of total feeder load?
AEP commented that to the extent DG can operate and satisfy the technical
requirements of the utility, the DG should be free to operate within its specific
market obligations and opportunities.
EGSI commented that it would be most economic to limit energy exported
to the distribution system so that it did not exceed the total substation
load at any point in time.
Reliant commented that, assuming there is not a feeder constraint, there
is no market-related need to limit the amount of energy exported to the distribution
system.
TXU commented that if there are competing DG facilities on the same feeder
and concurrent generation could exceed the safe and prudent capabilities of
the feeder and/or substation, the amount of energy that a particular customer
can export to the distribution system as a percentage of total feeder load
should be limited. The distribution utility should not be required to subsidize
an exporting DG facility by upgrading an overloaded feeder that is otherwise
adequately sized to meet the needs of existing distribution customers.
From the comments submitted, it appears that problems with significant
amounts of DG on a feeder are not likely to arise in the near future due to
the limited market penetration of DG. Substantive Rule §25.212(c) of
this title, Technical Requirements for Interconnection and Parallel Operation
of On-site Distributed Generation, lists operational criteria in the areas
of voltage, flicker, frequency, harmonics, and fault and line clearing and
requires that the customer's generator meet these operational criteria to
eliminate undesirable interference caused by operation of the customer's generating
equipment. In addition, the rule establishes a process for identifying safety
and reliability issues associated with DG projects and addressing these issues.
Interconnection studies that are currently required under Substantive Rule §25.212(g)
should identify any system upgrades that are needed to facilitate interconnection
of a DG facility. Where interconnection of a particular DG facility would
involve significant system upgrades, §25.(m)(3) ensures that the DG facility
owner, not the ratepayers, will be responsible for paying for those upgrades.
Further, the provisions of §25.(o) concerning interconnection disputes
ensure that disputes concerning the level of system upgrades required by a
utility for interconnection can be expeditiously addressed. No change was
made in response to these comments.
The commission does not foresee that DG on a feeder in excess of feeder
load, as set forth in question 2, is likely to become a problem in the near
future due to the current low market penetration of DG. As DG becomes more
prevalent, technical solutions to the problems identified by the utilities
are likely to become more available at lower cost. For now, the interconnection
requirements of commission rules address the issue of interconnection costs.
No change was made in response to these comments.
The commission does not anticipate that the problems addressed in the responses
to question 3 will become a significant issue until market penetration of
DG substantially increases. No change was made in response to these comments.
Because of the limited market penetration of DG at this time, the commission
does not see that there is a present need to address the potential circumstance
raised by TXU in its response to question 4. As DG penetration increases along
with the level of experience of the commission, the utilities, and DG customers,
an appropriate solution to the potential problem outlined by TXU can be crafted
when needed. No change was made in response to these comments.
5. Is there a need to address allocation of transmission charges among
customers when the total DG exported to a feeder exceeds feeder load? If so,
what is the best allocation method?
AEP commented that DG facilities that export generation that exceeds the
native load on the feeder are by definition using the transmission system.
Current transmission pricing does not properly take into account the existence
of DG. In order for this issue to be addressed, ERCOT will need to develop
policies related to DG export. AEP believes this is an issue for future workshops
and development.
EGSI commented that there is no need to address allocation of transmission
charges. The DG should be treated the same as a qualifying facility or independent
power producer, with those rules used to determine charges.
Reliant and TXU commented that there is no need to address the allocation
of transmission charges due to the current statute and current rules which
recover transmission costs from all customers in ERCOT as determined on a
statewide postage-stamp basis.
The commission agrees with TXU and Reliant that commission rules currently
address allocation of transmission charges. The commission's policy regarding
transmission charges is that the load pays. Entities receiving generation
from a DG facility are responsible for any transmission charges associated
with receipt of that generation. No change was made in response to these comments.
6. Is there a need to limit the amount of insurance that can be required
of an exporting customer? Please explain why or why not. If there is a need
to limit the amount of insurance that can be required of an exporting customer,
please explain what the appropriate insurance requirements should be. Should
insurance requirements vary with the size of the installation?
AEP commented that there is no need for the commission to limit the amount
of insurance that can be required of an exporting customer. AEP noted that
the commission previously considered a similar issue in Project Number 13868,
EGSI commented that there should be a requirement for insurance at a level
that will insure indemnification of the utility for the potential harm that
a DG could cause. Allowing insurance to vary directly with the size of the
DG will only encourage disregard for potential consequences of negligence
and culpable behavior. The DG would typically have little investment and little
to lose by simply walking away from reasonable claims that exceed the limits
of its insurance and the value of the DG investment.
Reliant commented that there is no need to address the amount of insurance
required of an exporting customer. Currently, issues relating to the limitation
of liability and indemnification are addressed in Section 4 of the Agreement
for Parallel Operation of Distributed Generation approved by the commission
on November 18, 1999. Because the agreement contains the necessary provisions
concerning the issue of liability and indemnification, any changes to the
current rule would not be necessary. The utility and customer are bound by
the agreement to indemnify against losses to the extent that they result from
an act of negligence in the design, construction, or operation of the facilities.
The level of insurance that the utility and customer choose to carry is a
business decision that each must make independently. Whether or not the utility
and customer have chosen to adequately insure themselves should not be of
concern to the commission. Reliant further commented that it is unaware of
any requirements that utilities can impose upon an exporting customer as to
the levels of insurance.
TXU commented that the commission should not adopt limits on the amount
of insurance that can be required of an exporting customer. The liabilities
and potential hazards are the same regardless of the size of the generator.
As the density of installed DG increases, the public exposure to the potential
hazards of electrical generation will increase. Utilities must be able to
ensure that exporting customers have either adequate assets or sufficient
insurance to support their contractual indemnification obligations. TXU expressed
its belief that it should be permitted to examine each proposed interconnection
on a case-by-case basis to determine appropriate insurance requirements.
The commission appreciates the concerns expressed by utilities that they
have a mechanism to ensure that the DG facility owner is financially able
to indemnify the utility against loss due to the fault of the DG facility
or its owner. However, allowing a utility to require proof of insurance at
levels set on a case-by-case basis creates the potential for abuse by the
utility. The commission is amenable to allowing case-by-case review of liability
insurance requirements for the time being and until such time as it appears
that one or more utilities are abusing their ability to impose insurance requirements
on a case-by-case basis. The commission encourages DG customers who have concerns
about the level of liability insurance required by a utility to interconnect
to avail themselves of the dispute resolution provisions of §25.(o).
7. Should the ten MW limit on interconnected capacity in the definition
of "facility" be raised or eliminated altogether?
AEP responded that the ten MW limit in the definition of DG was intended
to clearly identify DG for all stakeholders in Texas and is appropriate for
15 kV class distribution systems. To apply the requirements of the DG rule
to larger units will very likely create complications that will require changes
to the rules, further complicating and increasing the cost for DG applicants
and utilities. Smaller units would be thrown into a process designed to accommodate
larger units with requirements that might have been avoided had the ten MW
limit remained in place. This is currently the dilemma faced by DG today when
having to deal with ERCOT for transmission service. The ERCOT rules were designed
for projects by large independent power producers, and not the needs of small-scale
DG. AEP does not consider the ten MW limit in the rule as excluding DG with
a capacity higher than ten MW. Nothing in the commission's rules prevents
a party that wishes to interconnect a unit larger than ten MW from working
with the distribution utility on a case-by-case basis.
AEP further commented that the commission can increase the size of DG for
feeders of higher nominal operating voltage and still be consistent with the
original intent. AEP recommended that the limit for 25 kV class distribution
be set at 20 MW and the limit for 35 kV class distribution be set at 25 MW.
In its reply comments, TXU disagreed with AEP's recommendation that the
limit for 25 kV class distribution be set at 20 MW and the limit for 35 kV
class distribution be set at 25 MW. TXU claimed that the technical and operational
problems discussed in its response to preamble questions 1-3 militate in favor
of retaining the existing ten MW cap.
EGSI commented that the ten MW limit is reasonable and should be maintained.
Only after the industry has more experience solving the problems of potentially
significant penetration of the delivery system by DG should the ten MW limit
be reviewed. EGSI further commented that the ten MW limit should be applied
to distribution system facilities served from a common substation source.
Reliant commented that due to the inherent physical limitations of a distribution
feeder, the ten MW upper limit on DG should remain. The focus of the DG rules
is distributed generation and ten MW is often the threshold for that designation.
SPS commented that the MW limit should remain in the definition of a facility.
The distribution system is generally configured to carry small loads. Most
locations on the distribution system would require significant upgrades to
the system to accommodate large scale DG operations. The original purpose
of encouraging DG was to allow an alternative for self- production of a customer's
energy needs. The only purpose for increasing or eliminating the ten MW threshold
would be to facilitate large-scale wholesale sales from distribution sources.
The ten MW limit allows the utility to tailor specific charges for the studies
required for siting and placement of DG. Larger scale operations would require
much more flexibility as the costs associated with these operations vary a
great deal more.
TXU also commented that, due to the inherent physical limitations of a
distribution feeder, the ten MW upper limit on DG should remain. The rule
as currently written is consistent with ERCOT Protocols which use ten MW as
the limit for increased metering and telemetering requirements. The rule is
also consistent with the statutory ten MW exemption for on-site generation
regarding payment of transition charges.
The commission believes that it is appropriate at this point in time to
retain the limit on DG to facilities generating ten MW or less of energy.
As DG becomes more prevalent in the market and solutions to the problems identified
by the utilities in questions 1-3 become more available and less costly, the
commission may revisit the upper limit on DG. No change was made in response
to this comment.
General Comments
In general comments concerning the proposed rule, Reliant commented that
the commission has underestimated the administrative costs associated with
setting up and operating a banking service. AEP recommended that the banking
provisions be modified as suggested by TXU in its comments.
As discussed more fully in the response to comments concerning subsection
(c)(2), the commission has modified the definition of banking to allow parties
to a banking arrangement to develop a plan for disbursing banked energy in
a manner that is reasonably anticipated to be revenue neutral.
EGSI commented that the proposed rule appeared to be written only with
Texas ERCOT utilities in mind and does not contemplate issues, requirements,
and regulatory oversight for non- ERCOT utilities. The proposed rule contains
provisions that directly conflict with Federal Energy Regulatory Commission
(FERC) tariffs and regulatory oversight. They also conflict with the Public
Utility Regulatory Act (PURA) and the commission's own prior rulings.
The commission recognizes that a DG customer selling energy on a wholesale
basis may be subject to FERC-approved open access tariffs that address energy
imbalances and do not require banking services. When ERCOT switches to a single
control area, the banking services required under this rule will also be replaced
by an energy imbalance system managed by the ISO. DG customers will be able
to negotiate an agreement with their retail electric provider (REP) for handling
any imbalance fees associated with the DG customer's operations. The rule
has been modified to address exporting DG customers interconnected to a distribution
system operated by a non-ERCOT utility.
EGSI commented that the proposed rules provide subsidies to DG which will
be assessed to other parties. EGSI indicated that the subsidies are in various
forms: no ability to assess charges for additional facilities required by
DGs to attach to and operate on the utility system; DGs will not pay the costs
others pay for the same standby and ancillary services associated with transmission
facilities and generation capacity; DGs will not pay the costs to acquire
and maintain the new power accounting and transaction systems that will be
required to bank energy; and DGs will not be required to pay the potentially
significant cost differential between the value of banked energy and the returned
energy.
The commission disagrees with EGSI's comments. Current commission rules
provide a mechanism for a utility to assess significant interconnection costs
to the DG facility owner. Routine interconnection costs are borne by ratepayers
generally in recognition of the fact that in many instances DG benefits the
distribution system and lowers distribution system operating costs. The proposed
rule amendments do not preclude assessment of charges to a DG facility for
standby and ancillary services, as contended by EGSI. Further, the commission
anticipates that reasonable expenses associated with establishing systems
for providing banking services will be captured in the banking fee tariff.
Finally, as noted above, the commission has determined that modifications
to the proposed definition of banking are needed to ensure that they are fair
for both the utility and DG facility owners. No change was made in response
to these comments.
EGSI commented that the proposed amendments are unnecessary, costly, and
burdensome for the short duration they will be in effect. DGs can be reasonably
and equitably accommodated today by rules and regulations that are in place
today for qualifying facilities (QFs) and independent power producers (IPPs).
Non-ERCOT utilities should not be subject to the amendments to these rules.
The commission has found that there is a need for the proposed amendments
and disagrees with EGSI's comments that they are unnecessary, costly and burdensome.
The commission has found that the rules in place for IPPs are designed for
large projects and create barriers to DGs that are ten MW or smaller.
EGSI commented that under the Public Utility Regulatory Policy Act (PURPA),
a non- ERCOT utility is obligated to take power when and if it is available
from a QF. The QF is paid the utility's avoided cost and banking is not allowed.
Therefore, these proposed rules appear to provide customers with more flexibility
and rights than intended by PURPA and is a violation of PURPA. While a utility
is required to purchase the energy as available under PURPA the intent was
to keep other customers neutral as to whether the utility generated or purchased
this energy from the QF. If the banking portion of the proposed amendment
is approved, other customers will subsidize the DG customers. These subsidies
are contradictory to the intent of Senate Bill 7, 76th Legislative Session,
which was to create a competitive market for the sale of electricity.
As discussed generally above, the commission disagrees that the rule would
provide illegal subsidies to DG customers. The only provision of the rule
for cost sharing relates to standard interconnection costs for DG customers.
However, as DG generally provides a benefit to the distribution system, other
customers will realize benefits from DG interconnection that will ultimately
more than offset the cost of interconnection. The commission concludes that
these rules are not contrary to PURPA. That law provides specific rights to
qualifying facilities. The benefits in this rule would apply to generators
of less than ten MW regardless of whether they are QFs. To the extent that
specific conflicts with FERC tariffs are identified, the commission will relieve
non-ERCOT utilities from the obligations of this rule.
EGSI expressed concern about the proposed banking requirements. EGSI claimed
that the amendment was in direct conflict with FERC regulations. Connection
of DGs to the EGSI distribution system has already been addressed in EGSI's
FERC Generator Imbalance Tariff (GIT). The fact that a generator is interconnected
at a distribution voltage does not obviate its reliance on the transmission
system. As such, a DG is subject to the provisions of EGSI's Open Access Transmission
Tariff (OATT) including the GIT. Pursuant to that tariff, if a generator is
producing power, it must either be a network resource or have a point-to-point
schedule from it to a load. If it is a network resource, then its actual output
is credited to the network load and there is no imbalance. If it is a point-to-point
supplier, then any discrepancy between the schedule and output is handled
by the GIT and is either purchased by EGSI based upon its avoided cost or
purchased by the supplier based on EGSI's incremental cost. There is no provision
for banking.
The commission agrees that the proposed banking requirements should not
be applied to an exporting DG customer interconnected to a distribution system
operated by a non-ERCOT utility. The rule has been revised accordingly.
Further, EGSI claimed that the provision of banking service requires the
bank to have capacity. If the customer of the banking service does not pay
a capacity charge, it is being subsidized by those that pay for the capacity.
The banking provision, as envisioned in the draft rules, cannot apply to FERC-regulated
utilities and is plainly prohibited by PURA.
As previously discussed, the proposed banking provisions have been revised
to provide that they do not apply to a distribution system operated by a non-ERCOT
utility and to provide that the banking agreement between the DG customer
and the utility should be structured in such a manner as to be revenue neutral.
These changes address the concerns expressed by EGSI in this comment. No further
changes were made in response to this comment.
EGSI further commented that the proposed rule is in conflict with §25.341
of this title, Definitions, in that banking is a form of hedging and risk
management, a competitive energy service.
The commission disagrees that banking is a form of hedging and risk management.
Banking is a mechanism that allows DG facilities generating at less than whole
(integer) megawatt units to schedule their generation. No change was made
in response to this comment.
EGSI also disputed the assertions in the preamble that the proposed changes
will have minimal economic cost. The banking provisions will have potential
for costs to be assessed to utilities or their customers. Every kilowatt-hour
of energy banked by a DG has the potential to impose additional costs on the
utility. Utilities should be able to recover these costs through fuel recovery
mechanisms. EGSI expressed concern about the ability of a DG customer to bank
energy during off peak hours and then order its delivery during on peak hours
at substantial potential cost to the utility. Alternatively, DG could operate
when the energy input into the system is economically costly to other customers
such as when, during system minimum load conditions, the utility must incur
costs to keep generation on-line and available for the next day's peak demand.
If the DG places energy into the system during those low load periods and
displaces energy that would otherwise be served by system generation, then
all customers are subsidizing the DG through the additional fuel and operations
and maintenance (O&M) costs incurred during those low load periods.
The commission foresees minimal economic impact resulting from the banking
provisions due to the low penetration of DG.
EGSI further noted that the rules are silent on the handling of banked
energy as of January 1, 2002. Would the utilities have to return it or would
the DGs lose it?
The commission concludes that this issue can be resolved by agreement between
a DG owner and a utility.
EGSI commented that the proposed amendments do not specify the circumstances
under which a purchaser of energy from an exporting customer may be assessed
distribution and transmission-related charges as is contemplated in the preamble.
Because the rule is silent on this issue, it can be assumed that the standard
and normal fees and charges appropriate for such services will be assessed
to the customer receiving the energy. Further, the draft rules speak only
to the prohibition of fees and charges applied to exported energy. A logical
inference is that fees can be applied to the return of banked energy. If fees
can be applied to exported energy then the draft rules do not speak to such
issues as creditworthy arrangements for those that receive the exported power.
The proposed rule specifically provides that distribution and transmission
charges cannot be assessed to the exporting DG customer. The rules generally
do not prohibit assessments of transmission and distribution charges against
the entity receiving exported energy from the DG customer, consistent with
the commission's rules for ERCOT transmission service, which require load-serving
utilities to pay for transmission service. In the case of charges associated
with use of the distribution system to which the DG customer is interconnected,
the commission would expect that no distribution charges would be assessed
in accordance with each utility's tariff, which would typically require payment
for power delivered to the customer or in connection with standby service.
Creditworthiness for a DG would become an issue only if the DG owner needed
to purchase transmission service or ancillary services. These issues can be
addressed under the tariffs for such service.
SPS commented that energy that is exported from a DG facility should be
classified as wholesale energy. Exported DG can be transported across state
lines. The FERC asserts its jurisdiction over charges for transmission and
distribution of sales of this nature. Also, PURA explicitly forbids the sale
of electricity from a non-utility to retail customers prior to competition.
Therefore, the exported energy from DG units must be sold to non-end-use customers
as wholesale energy. After retail access, energy must be sold to end-use customers
by a licensed retail electric provider (REP). Classifying exported DG as wholesale
power will eliminate confusion when sorting out FERC charges to FERC customers.
The commission concludes that, while SPS is correct, the proposed change
is unnecessary. No change was made in response to this comment.
SPS also commented that the rule provides no certainty that the energy
would be exported to the utility system or in what volume; therefore, the
energy has no capacity value. However, the rule allows the DG customer to
ask that energy be disbursed at its discretion. This has the effect of allowing
the DG customer to resell the banked energy at a MW level much greater than
was ever put into the system by the DG facility. The vagueness of the rule
provision erodes the value of the benefits of the DG to the utility system.
The banking requirement should be revised so that the banked energy cannot
be assigned any capacity value. This could be accomplished by requiring that
all banked energy be released the following months across all hours of the
month in the form of a credit to the customer's bill rather than to be dispatched
at the DG customer's discretion.
In reply comments, EDI indicated that it does not agree with SPS' assertion
that banked energy would create too much value to exporting generators nor
that DG has no capacity value. Banking addresses two issues associated with
DG. First, scheduling in less than one MW increments is prohibited under ERCOT
rules. EDI generates in 1.3 MW increments. EDI would lose that 0.3 MW each
hour. Banking allows EDI to schedule in whole MW increments. Second, daily
scheduling charges are cost prohibitive for small DG. The purpose of banking
is not to store off-peak energy and then sell or deliver it as on-peak energy,
nor is the purpose of banking to hold on to energy in a rising market and
sell that energy at a premium. Rather, it is to facilitate the delivery of
electricity. DG can meter both on-peak and off-peak power separately, allowing
for scheduling and delivery separately. Landfill gas generated power does
have capacity value and sells at a premium because of that value. EDI does
not agree that DG energy should be classified as wholesale energy. If PURA
rules prevent DG energy from being sold at retail by a non-utility, then it
will not happen.
In reply comments, TXU disagreed with SPS's suggestion that the banking
requirement be revised to require banked energy to be released the following
month in the form of a credit to the customer's bill. SPS's proposal does
not mitigate the potential risk of banking to the utility and creates administrative
problems and costs that should be avoided.
As previously discussed, the commission has revised the banking requirements
to allow negotiation of banking agreements that are revenue neutral. The commission
believes the revised banking requirements provide a superior approach to that
suggested by SPS for handling the needs of DG customers. As discussed by EDI,
scheduling charges are in part driving the need for utilities to provide banking
services. No change was provided in response to SPS' comment.
Subsection (c)(2)
TXU commented that banking is a new concept not part of the current rule.
As proposed, it gives the DG customer unilateral control over when energy
is produced and when energy is delivered. This would permit the DG customer
to bank low-cost energy and to direct the utility to disburse high-cost energy.
This potential for gaming by DG customers could cause the utility to incur
unmanageable risks of substantial financial loss. If banking is required,
it should be equitable. The rules of operation of the bank should ensure that
the electric utility is not put at financial or operational (
i.e.
, capacity) risk through providing this service. The electric utility
should be allowed to negotiate with the DG owner to reach agreement on an
equitable schedule for delivery and disbursement of energy. To address these
issues, TXU recommended specific revisions to the proposed definition of banking.
The commission agrees that banking services should be provided in a manner
that is revenue- neutral for both host control area, the receiving control
area, and the DG customer. The commission has therefore revised the definition
of banking as recommended by TXU with the exception that the commission has
also required that the agreement be acceptable to the DG customer. The commission
urges utilities to negotiate cooperatively to avoid agreements that frustrate
the DG customer's business purpose. The commission will expeditiously consider
and rule on any complaint received from a DG customer concerning allegations
of an unfair banking agreement.
Subsection (c)(10)
Small Hydro of Texas, Inc. (SHOT) recommended that the definition of "on-site
distributed generation" in subsection (c)(10) be revised to delete any requirement
that DG be interconnected at 60 kV or lower. A generating facility that otherwise
meets the requirements for on-site DG should not be disqualified under the
rule simply because it is interconnected at 60 kV or greater. A small DG facility
should not be barred from the protections afforded DG just because it happens
to be interconnected to a utility's transmission system rather than its distribution
facilities. In many cases, this may be the only economic option available
to the generator because of its location. The legislature gave no indication
that units that otherwise met all of the requirements should not be treated
as DG simply because they were interconnected at the transmission level.
AEP commented in opposition to the comments of SHOT. SHOT's request would
actually deny to DG owners the benefits of streamlining and standardizing
the interconnection process. The additional complexity of transmission level
interconnections would thwart the original intent and purpose of §25.
and §25.212. In addition, extending the DG rule to non- distribution
voltages would put it in direct conflict with interconnection procedures and
requirements that have been established for transmission voltage interconnections
by the ERCOT ISO. The existing DG rules are strengthened by their focused
application of the principles to small units when interconnected with distribution
facilities. Removing this limit on the application of the rules dilutes their
strength and undermines the commission's purpose in adopting the rules. Should
the commission adopt SHOT's proposal and raise the ten MW limit, AEP questions
how the commission would differentiate distributed generation from other generation
in the future. The DG rules should not be amended to accommodate special wholesale
market issues. Transmission policy in Texas has been formulated without DG
in mind and current transmission pricing does not properly take into account
the existence of DG. The proper course of action would be to rectify this
situation and accommodate DG as well as small scale generation interconnected
at transmission voltage as appropriate. Should the DG rule be expanded to
encompass facilities that are connected at transmission voltage, AEP would
have additional issues that would have to be covered that are clearly beyond
the scope of this rulemaking.
In its reply comments, TXU recommended that the commission reject the proposal
to allow transmission-level generation to be treated as DG, a proposal that
is inconsistent with the original intention of both the legislature and the
commission in promoting DG and raises other problems that have not been addressed
or contemplated by these rule amendments. Adoption of SHOT's proposal would
significantly change the risks and obligations previously contemplated by §25.
and §25.212. It would entail both a modification to the rule and a revision
to the commission-approved Agreement for Interconnection and Parallel Operation
of Distributed Generation and an evaluation of whether other provisions contained
in or assumptions underlying current rules would also have to be altered.
Transmission-level generation invokes different technical interconnection
issues and other questions related to capacity payments and sale to different
markets that were not contemplated by this rulemaking.
The commission agrees with SHOT that a small DG facility should have access
to the protections afforded DG customers under the DG rule. However, the commission
is wary of extrapolating this rule to small generators which interconnect
at transmission voltage rather than distribution voltage without further discussion
and evaluation of the implications of such a change in the rule. The commission
also notes that utilities have the flexibility to apply the concepts in this
rule to small generators interconnected at transmission voltage. AEP has suggested
that small generators interconnected at transmission voltage should be accommodated
by utilities as appropriate on a case-by-case basis. The commission believes
that this may be an appropriate solution to the problem identified by SHOT
in the short term and until utility abuses are identified by the commission.
Therefore, the commission declines to adopt SHOT's recommendation at this
time. However, the commission expects as a matter of policy that the utilities
will apply the same principles and practices to DG interconnecting at transmission
as at distribution. The commission will monitor utility treatment of DG interconnection
at transmission levels as well as at distribution and may address this issue
in the future, if it identifies a need to specifically accord small generators
interconnected at transmission voltage regulatory protections currently afforded
to DG customers.
Subsection (d)(1)
TXU commented that there will be no need for banking service after June
1, 2001, when ERCOT will transition to a single control area. If banking service
were to continue after ERCOT is operated as a single control area, it would
cause uninstructed deviation in a qualified scheduling entity's (QSE's) schedule
which may result in additional cost to the DG customer. TXU therefore recommended
that subsection (d)(2) be revised to require banking service until only June
1, 2001.
TXU proposed a five to thirty day banking period, which would effectively
reduce the banking period to five days. The rule anticipated a monthly banking
period. Adding the words "at customer's direction" after the five to thirty-day
language would be acceptable. Additionally, any prearranged schedule should
attempt to keep the host utility, the delivering utility, and the customer
neutral with respect to the market, not just the host utility. EDI responded
that it would prefer to see the date in terms of service remain at December
31, 2001.
AEP and TXU suggested modifications to address the financial and operational
risks associated with the commission's proposed amendments and to create a
banking system that does not shift the financial and operational risks to
the distribution utility.
The commission agrees that the rule should not require utilities to provide
banking services after ERCOT begins to operate the transmission system as
a single control area for the reasons raised by TXU. Therefore, the rule has
been revised to require that banking service be provided only until the ERCOT
ISO begins to operate ERCOT as a single control area. Thereafter, individual
agreements negotiated between DG customers and QSEs should replace the need
for banking services. As to EDI's comments regarding the definition of banking,
the commission understands EDI's concerns about imposition of undue scheduling
fees on the DG customer. One of the purposes of the required banking arrangement
is to establish reasonable scheduling fees that can be imposed against a DG
customer moving only a small amount of generation on the grid. Under the definition
proposed by TXU and adopted by the commission, the utility and DG customer
will be able to negotiate a banking agreement that serves their needs and
imposes reasonable scheduling fees. The commission encourages DG customers
which have difficulty negotiating appropriate banking arrangements with utilities
to file complaints with the commission for rapid resolution.
Subsection (d)(2)
AEP commented that it believes that the commission intends subsection (d)(2)
and (5) to further the commission's policy that load pays. AEP is concerned,
however, that the utility itself will be considered the load and will be forced
to pay or absorb the distribution line charges and transmission charges. AEP
is not aware of any provision of PURA that requires the utility to purchase
energy from exporting customers or any provision that requires the utility
to absorb all distribution and transmission charges associated with the exporting
customer's use of the distribution and transmission system.
EDI replied to AEP's comments indicating disagreement with AEP's suggestion
that the exporting customer should pay distribution and transmission line
charges. The physical power that a DG puts into the system stays at the distribution
level. This results in a savings to the host utility that otherwise would
have to deliver by transmission and distribution lines to supply the feeder
that the DG is supplying.
The commission believes that AEP's concerns are misplaced. The commission
anticipates that a DG customer will not move energy onto the grid unless it
has a buyer for that energy. Without a designated buyer, the DG customer will
not get paid for its energy. Nothing in commission rules suggests that the
utility becomes the DG customer's designated buyer by default. In response
to EDI's comments, the commission notes that the provisions of the rule concerning
assessment of transmission and distribution charges are consistent with the
commission's policy that load pays for delivery service.
Subsection (d)(3)
EGSI objected to the provisions of subsection (d)(3) prohibiting assessment
of the costs of operating and maintaining the utility's interconnection equipment
against the DG customer. O&M costs must be collected for facilities installed
and used for the purpose of delivering, metering, and monitoring power from
the DG to the system. Those facilities installed solely to accommodate the
DG would not be already covered by tariffs for delivery of power to all customers.
O&M costs should be born by either the exporting DG customer or the entity
receiving the energy. Otherwise, the DG customer will enjoy a direct subsidization
paid by other system users.
The commission disagrees with this comment. As discussed previously, DG
provides a benefit to the entire system. Therefore, any additional costs of
interconnecting DG will ultimately be more than offset by the system benefits
associated with DG. No change was made in response to this comment.
Subsection (d)(4)
TXU commented that the proposed rule language is unclear. It should be
modified to specify that scheduling fees apply to banked energy at the time
the energy is scheduled to be delivered from the host control area to the
receiving control area. With this change, the exporting DG would only pay
scheduling fees when the banked energy is actually scheduled to be delivered
to the receiving control area. TXU recommended specific modifying language.
EDI replied to TXU's proposed change. If the definition of banking includes
a five-day period, then that is likely to be the banking period. This rule
language is fine if the banking period can be up to 30 days.
AEP commented in support of TXU's proposed changes.
The commission generally agrees with TXU. The commission intended in the
original rule to limit scheduling fees to a one-time charge for disbursement
of energy. The commission has revised the rule accordingly.
Subsection (d)(5)
TXU commented that the proposed rule language should be changed to clarify
the entity being referred to and the charges being discussed. Specifically,
TXU suggested that the phrase "an exporting generator" be substituted for
"a customer for exporting energy" and "access" be substituted for "line" in
reference to transmission charges.
EDI commented that TXU's comments appear to be changing the transmission
charges, not clarifying them. EDI preferred to leave the definition as transmission
line charges, unless line and access mean the same thing in this context.
AEP commented in support of TXU's proposed changes as they create a banking
system that does not shift the financial and operational risk to the distribution
utility.
The commission agrees with TXU in part. The commission disagrees that the
term "an exporting generator" should be substituted for "customer for exporting
energy." Under the rule, interconnected DG operators are termed "customers."
The provisions of the rule concerning assessment of charges to customers for
exporting energy are intended to foster the commission's policy that load,
not the exporting customer, pays for use of the transmission and distribution
systems. The commission agrees that the rule should be clarified to prohibit
assessment of either access or line charges against the exporting customer.
Subsection (d)(6)
AEP, EGSI, Reliant, and TXU commented that the contract reformation provisions
of the proposed rule should be revised to apply only to those contracts executed
after December 21, 1999, the original effective date of substantive rule §25.
and §25.212. AEP further commented that no contract reformation should
be required unless the DG customer agrees, while EGSI and Reliant commented
that no contract should be reformed unless both parties agree. Reliant and
TXU commented that the utility and DG customer should have the option to decide
not to reform their contract. AEP further recommended that the contract reformation
deadline be within 60 days of adoption of the rule amendment or within 60
days of the adoption of a commission-approved interconnection agreement form,
whichever is later. In reply comments, AEP commented in favor of TXU's proposed
revisions.
The commission generally disagrees. The commission believes that every
DG customer, including a customer that signed a contract with a utility prior
to the initial adoption of this rule, should have access to the mechanisms
accorded under this rule, as amended. The commission agrees, however, that
contract reformation should not be required where both the utility and the
DG customer express a desire to retain their original contract. The rule has
been revised accordingly.
Subsection (d)(7)
AEP sought clarification of the action required of utilities under this
provision. AEP indicated that it assumed the commission intended that utilities
would update their §25. compliance tariffs with banking and scheduling
fee information. AEP reminded the commission that AEP wholesale transactions
that include the banking and scheduling fees must also be filed at FERC.
AEP has properly interpreted this rule. The commission does not believe
that further clarification is needed. No change was made in response to this
comment.
EGSI commented that subsection (d)(7) should allow a 60-day period for
amendment of applicable tariffs. In reply comments, TXU agreed that a 20-day
period for amendment of applicable tariffs was too short and suggested that
30 days would be more reasonable.
The commission agrees that the 30-day period recommended by TXU is reasonable
and has changed the rule accordingly.
All comments, including any not specifically referenced herein, were fully
considered by the commission.
This amendment is adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement
2000) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction; and specifically, PURA §39.101(b), which grant(s) the
commission authority to ensure that electric customers have access to on-site
distributed generation and to providers of energy generated by renewable energy
resources.
Cross Reference to Statutes: Public Utility Regulatory Act §14.002
and §39.101(b).
§25..Interconnection of On-Site Distributed Generation (DG).
(a)
Application. Unless the context clearly indicates otherwise,
in this section and §25.212 of this title (relating to Technical Requirements
for Interconnection and Parallel Operation of On-Site Distributed Generation)
the term "electric utility" applies to all electric utilities as defined in
the Public Utility Regulatory Act (PURA) §31.002 that own and operate
a distribution system in Texas. This section shall not apply to an electric
utility subject to PURA §39.102(c) until the expiration of the utility's
rate freeze period.
(b)
Purpose. The purpose of this section is to clearly state
the terms and conditions that govern the interconnection and parallel operation
of on-site distributed generation in order to implement PURA §39.101(b)(3),
which entitles all Texas electric customers to access to on-site distributed
generation, to provide cost savings and reliability benefits to customers,
to establish technical requirements that will promote the safe and reliable
parallel operation of on-site distributed generation resources, to enhance
both the reliability of electric service and economic efficiency in the production
and consumption of electricity, and to promote the use of distributed resources
in order to provide electric system benefits during periods of capacity constraints.
Sales of power by a distributed generator in the wholesale market are subject
to the provisions of this title relating to open-access comparable transmission
service for electric utilities in the Electric Reliability Council of Texas
(ERCOT).
(c)
Definitions. The following words and terms when used in
this section and §25.212 of this title shall have the following meanings,
unless the context clearly indicates otherwise:
(1)
Application for interconnection and parallel operation
with the utility system or application - The standard form of application
approved by the commission.
(2)
Banking - A method of accounting for energy produced by
a customer for export into the distribution system. The host control area
accepts energy from the customer to meet its own energy needs during a five-
to 30-day period, credits this energy to the customer's account, and subsequently
produces and, in the five- to 30-day period immediately following acceptance
of the energy, disburses the energy accrued under the customer's account to
the receiving control area specified by the customer. Disbursement of the
accrued energy shall follow a pre-arranged schedule mutually acceptable to
the host control area, the receiving control area, and the DG customer. Such
schedule shall attempt to keep the host control area neutral with respect
to the market value of the energy transferred on behalf of the exporting customer.
(3)
Company - An electric utility operating a distribution
system.
(4)
Customer - Any entity interconnected to the company's utility
system for the purpose of receiving or exporting electric power from or to
the company's utility system.
(5)
Facility - An electrical generating installation consisting
of one or more on-site distributed generation units. The total capacity of
a facility's individual on-site distributed generation units may exceed ten
megawatts (MW); however, no more than ten MW of a facility's capacity will
be interconnected at any point in time at the point of common coupling under
this section.
(6)
Interconnection - The physical connection of distributed
generation to the utility system in accordance with the requirements of this
section so that parallel operation can occur.
(7)
Interconnection agreement - The standard form of agreement,
which has been approved by the commission. The interconnection agreement sets
forth the contractual conditions under which a company and a customer agree
that one or more facilities may be interconnected with the company's utility
system.
(8)
Inverter-based protective function - A function of an inverter
system, carried out using hardware and software, that is designed to prevent
unsafe operating conditions from occurring before, during, and after the interconnection
of an inverter-based static power converter unit with a utility system. For
purposes of this definition, unsafe operating conditions are conditions that,
if left uncorrected, would result in harm to personnel, damage to equipment,
unacceptable system instability or operation outside legally established parameters
affecting the quality of service to other customers connected to the utility
system.
(9)
Network service - Network service consists of two or more
utility primary distribution feeder sources electrically tied together on
the secondary (or low voltage) side to form one power source for one or more
customers. The service is designed to maintain service to the customers even
after the loss of one of these primary distribution feeder sources.
(10)
On-site distributed generation (or distributed generation)
- An electrical generating facility located at a customer's point of delivery
(point of common coupling) of ten megawatts (MW) or less and connected at
a voltage less than 60 kilovolts (kV) which may be connected in parallel operation
to the utility system.
(11)
Parallel operation - The operation of on-site distributed
generation by a customer while the customer is connected to the company's
utility system.
(12)
Point of common coupling - The point where the electrical
conductors of the company utility system are connected to the customer's conductors
and where any transfer of electric power between the customer and the utility
system takes place, such as switchgear near the meter.
(13)
Pre-certified equipment - A specific generating and protective
equipment system or systems that have been certified as meeting the applicable
parts of this section relating to safety and reliability by an entity approved
by the commission.
(14)
Pre-interconnection study - A study or studies that may
be undertaken by a company in response to its receipt of a completed application
for interconnection and parallel operation with the utility system. Pre-interconnection
studies may include, but are not limited to, service studies, coordination
studies and utility system impact studies.
(15)
Stabilized - A company utility system is considered stabilized
when, following a disturbance, the system returns to the normal range of voltage
and frequency for a duration of two minutes or a shorter time as mutually
agreed to by the company and customer.
(16)
Tariff for interconnection and parallel operation of distributed
generation - The commission-approved tariff for interconnection and parallel
operation of distributed generation including the application for interconnection
and parallel operation of DG and pre-interconnection study fee schedule.
(17)
Unit - A power generator.
(18)
Utility system - A company's distribution system below
60 kV to which the generation equipment is interconnected.
(d)
Terms of Service.
(1)
Banking. A company operating in ERCOT shall make banking
services available to any customer upon the customer's request. This obligation
continues until the ERCOT Independent System Operator begins operating ERCOT
as a single control area.
(2)
Distribution line charge. No distribution line charge shall
be assessed to a customer for exporting energy to the utility system.
(3)
Interconnection operations and maintenance costs. No charge
for operation and maintenance of a utility system's facilities shall be assessed
against a customer for exporting energy to the utility system.
(4)
Scheduling fees. A one-time scheduling fee for each banking
period may be assessed for the disbursement of banked energy. No other scheduling
fees may be assessed against an exporting DG customer.
(5)
Transmission charges. No transmission charges shall be
assessed to a customer for exporting energy. For purposes of this paragraph,
the term transmission charges means transmission access and line charges,
transformation charges, and transmission line loss charges.
(6)
Contract reformation. All interconnection contracts shall
be conformed to meet the requirements of this section within 60 days of adoption.
(7)
Tariffs. No later than 30 days after the effective date
of this section as amended, each electric utility shall file a tariff or tariffs
for interconnection and parallel operation of distributed generation, including
tariffs for banking and scheduling fees, in conformance with the provisions
of this section. This provision does not require a utility that filed an interconnection
study fee tariff prior to the effective date of this rule as amended to refile
such tariff. The utility may file a new tariff or a modification of an existing
tariff. Such tariffs shall ensure that back-up, supplemental, and maintenance
power is available to all customers and customer classes that desire such
service until January 1, 2002. Any modifications of existing tariffs or offerings
of new tariffs relating to this subsection shall be consistent with the commission-approved
form. Concurrent with the tariff filing in this section, each utility shall
submit:
(A)
a schedule detailing the charges of interconnection studies
and all supporting cost data for the charges;
(B)
a standard application for interconnection and parallel
operation of distributed generation; and
(C)
the interconnection agreement approved by the commission.
(e)
Disconnection and reconnection. A utility may disconnect
a distributed generation unit from the utility system under the following
conditions:
(1)
Expiration or termination of interconnection agreement.
The interconnection agreement specifies the effective term and termination
rights of company and customer. Upon expiration or termination of the interconnection
agreement with a customer, in accordance with the terms of the agreement,
the utility may disconnect customer's facilities.
(2)
Non-compliance with the technical requirements specified
in §25.212 of this title. A utility may disconnect a distributed generation
facility if the facility is not in compliance with the technical requirements
specified in §25.212 of this title. Within two business days from the
time the customer notifies the utility that the facility has been restored
to compliance with the technical requirements of §25.212 of this title,
the utility shall have an inspector verify such compliance. Upon such verification,
the customer in coordination with the utility may reconnect the facility.
(3)
System emergency. A utility may temporarily disconnect
a customer's facility without prior written notice in cases where continued
interconnection will endanger persons or property. During the forced outage
of a utility system, the utility shall have the right to temporarily disconnect
a customer's facility to make immediate repairs on the utility's system. When
possible, the utility shall provide the customer with reasonable notice and
reconnect the customer as quickly as reasonably practical.
(4)
Routine maintenance, repairs, and modifications. A utility
may disconnect a customer or a customer's facility with seven business days
prior written notice of a service interruption for routine maintenance, repairs,
and utility system modifications. The utility shall reconnect the customer
as quickly as reasonably possible following any such service interruption.
(5)
Lack of approved application and interconnection agreement.
In order to interconnect distributed generation to a utility system, a customer
must first submit to the utility an application for interconnection and parallel
operation with the utility system and execute an interconnection agreement
on the forms prescribed by the commission. The utility may refuse to connect
or may disconnect the customer's facility if such application has not been
received and approved.
(f)
Incremental demand charges. During the term of an interconnection
agreement a utility may require that a customer disconnect its distributed
generation unit and/or take it off- line as a result of utility system conditions
described in subsection (e)(3) and (4) of this section. Incremental demand
charges arising from disconnecting the distributed generator as directed by
company during such periods shall not be assessed by company to the customer.
After January 1, 2002, the distribution utility shall not be responsible for
the provision of generation services or their related charges.
(g)
Pre-interconnection studies for non-network interconnection
of distributed generation. A utility may conduct a service study, coordination
study or utility system impact study prior to interconnection of a distributed
generation facility. In instances where such studies are deemed necessary,
the scope of such studies shall be based on the characteristics of the particular
distributed generation facility to be interconnected and the utility's system
at the specific proposed location. By agreement between the utility and its
customer, studies related to interconnection of DG on the customer's premise
may be conducted by a qualified third party.
(1)
Distributed generation facilities for which no pre-interconnection
study fees may be charged. A utility may not charge a customer a fee to conduct
a pre- interconnection study for pre-certified distributed generation units
up to 500 kW that export not more than 15% of the total load on a single radial
feeder and contribute not more than 25% of the maximum potential short circuit
current on a single radial feeder.
(2)
Distributed generation facilities for which pre-interconnection
study fees may be charged. Prior to the interconnection of a distributed generation
facility not described in paragraph (1) of this subsection, a utility may
charge a customer a fee to offset its costs incurred in the conduct of a pre-interconnection
study. In those instances where a utility conducts an interconnection study
the following shall apply:
(A)
The conduct of such pre-interconnection study shall take
no more than four weeks;
(B)
A utility shall prepare written reports of the study findings
and make them available to the customer;
(C)
The study shall consider both the costs incurred and the
benefits realized as a result of the interconnection of distributed generation
to the company's utility system; and
(D)
The customer shall receive an estimate of the study cost
before the utility initiates the study.
(h)
Network interconnection of distributed generation. Certain
aspects of secondary network systems create technical difficulties that may
make interconnection more costly to implement. In instances where customers
request interconnection to a secondary network system, the utility and the
customer shall use best reasonable efforts to complete the interconnection
and the utility shall utilize the following guidelines:
(1)
A utility shall approve applications for distributed generation
facilities that use inverter-based protective functions unless total distributed
generation (including the new facility) on affected feeders represents more
than 25% of the total load of the secondary network under consideration.
(2)
A utility shall approve applications for other on-site
generation facilities whose total generation is less than the local customer's
load unless total distributed generation (including the new facility) on affected
feeders represents more than 25% of the total load of the secondary network
under consideration.
(3)
A utility may postpone processing an application for an
individual distributed generation facility under this section if the total
existing distributed generation on the targeted feeder represents more than
25% of the total load of the secondary network under consideration. If that
is the case, the utility should conduct interconnection and network studies
to determine whether, and in what amount, additional distributed generation
facilities can be safely added to the feeder or accommodated in some other
fashion. These studies should be completed within six weeks, and application
processing should then resume.
(4)
A utility may reject applications for a distributed generation
facility under this section if the utility can demonstrate specific reliability
or safety reasons why the distributed generation should not be interconnected
at the requested site. However, in such cases the utility shall work with
the customer to attempt to resolve such problems to their mutual satisfaction.
(5)
A utility shall make all reasonable efforts to seek methods
to safely and reliably interconnect distributed generation facilities that
will export power. This may include switching service to a radial feed if
practical and if acceptable to the customer.
(i)
Pre-Interconnection studies for network interconnection
of distributed generation. Prior to charging a pre-interconnection study fee
for a network interconnection of distributed generation, a utility shall first
advise the customer of the potential problems associated with interconnection
of distributed generation with its network system. For potential interconnections
to network systems there shall be no pre-interconnection study fee assessed
for a facility with inverter systems under 20 kW. For all other facilities
the utility may charge the customer a fee to offset its costs incurred in
the conduct of the pre- interconnection study. In those instances where a
utility conducts an interconnection study, the following shall apply:
(1)
The conduct of such pre-interconnection studies shall take
no more than four weeks;
(2)
A utility shall prepare written reports of the study findings
and make them available to the customer;
(3)
The studies shall consider both the costs incurred and
the benefits realized as a result of the interconnection of distributed generation
to the utility's system; and
(4)
The customer shall receive an estimate of the study cost
before the utility initiates the study.
(j)
Communications concerning proposed distributed generation
projects. In the course of processing applications for interconnection and
parallel operation and in the conduct of pre-interconnection studies, customers
shall provide the utility detailed information concerning proposed distributed
generation facilities. Such communications concerning the nature of proposed
distributed generation facilities shall be made subject to the terms of §25.84
of this title (Relating to Annual Reporting of Affiliate Transactions for
Electric Utilities), §25.272 of this title (Relating to Code of Conduct
for Electric Utilities and their Affiliates), and §25.273 (Relating to
Contracts between Electric Utilities and their Competitive Affiliates). A
utility and its affiliates shall not use such knowledge of proposed distributed
generation projects submitted to it for interconnection or study to prepare
competing proposals to the customer that offer either discounted rates in
return for not installing the distributed generation, or offer competing distributed
generation projects.
(k)
Equipment pre-certification.
(1)
Entities performing pre-certification. The commission may
approve one or more entities that shall pre-certify equipment as defined pursuant
to this section.
(2)
Standards for entities performing pre-certification. Testing
organizations and/or facilities capable of analyzing the function, control,
and protective systems of distributed generation units may request to be certified
as testing organizations.
(3)
Effect of pre-certification. Distributed generation units
which are certified to be in compliance by an approved testing facility or
organization as described in this subsection shall be installed on a company
utility system in accordance with an approved interconnection control and
protection scheme without further review of their design by the utility.
(l)
Designation of utility contact persons for matters relating
to distributed generation interconnection.
(1)
Each electric utility shall designate a person or persons
who will serve as the utility's contact for all matters related to distributed
generation interconnection.
(2)
Each electric utility shall identify to the commission
its distributed generation contact person.
(3)
Each electric utility shall provide convenient access through
its internet web site to the names, telephone numbers, mailing addresses and
electronic mail addresses for its distributed generation contact person.
(m)
Time periods for processing applications for interconnection
with the utility system. In order to apply for interconnection the customer
shall provide the utility a completed application for interconnection and
parallel operation with the utility system. The interconnection of distributed
generation to the utility system shall take place within the following schedule:
(1)
For a facility with pre-certified equipment, interconnection
shall take place within four weeks of the utility's receipt of a completed
interconnection application.
(2)
For other facilities, interconnection shall take place
within six weeks of the utility's receipt of a completed application.
(3)
If interconnection of a particular facility will require
substantial capital upgrades to the utility system, the company shall provide
the customer an estimate of the schedule and customer's cost for the upgrade.
If the customer desires to proceed with the upgrade, the customer and the
company will enter into a contract for the completion of the upgrade. The
interconnection shall take place no later than two weeks following the completion
of such upgrades. The utility shall employ best reasonable efforts to complete
such system upgrades in the shortest time reasonably practical.
(4)
A utility shall use best reasonable efforts to interconnect
facilities within the time frames described in this subsection. If in a particular
instance, a utility determines that it can not interconnect a facility within
the time frames stated in this subsection, it will notify the applicant in
writing of that fact. The notification will identify the reason or reasons
interconnection could not be performed in accordance with the schedule and
provide an estimated date for interconnection.
(5)
All applications for interconnection and parallel operation
of distributed generation shall be processed by the utility in a non-discriminatory
manner. Applications will be processed in the order that they are received.
It is recognized that certain applications may require minor modifications
while they are being reviewed by the utility. Such minor modifications to
a pending application shall not require that it be considered incomplete and
treated as a new or separate application.
(n)
Reporting requirements. Each electric utility shall maintain
records concerning applications received for interconnection and parallel
operation of distributed generation. Such records will include the date each
application is received, documents generated in the course of processing each
application, correspondence regarding each application, and the final disposition
of each application. By March 30 of each year, every electric utility shall
file with the commission a distributed generation interconnection report for
the preceding calendar year that identifies each distributed generation facility
interconnected with the utility's distribution system. The report shall list
the new distributed generation facilities interconnected with the system since
the previous year' report, any distributed generation facilities no longer
interconnected with the utility's system since the previous report, the capacity
of each facility, and the feeder or other point on the company's utility system
where the facility is connected. The annual report shall also identify all
applications for interconnection received during the previous one-year period,
and the disposition of such applications.
(o)
Interconnection disputes. Complaints relating to interconnection
disputes under this section shall be handled in an expeditious manner pursuant
to §22.242 (relating to Complaints). In instances where informal dispute
resolution is sought, complaints shall be presented to the Electric Division.
The Electric Division shall attempt to informally resolve complaints within
20 business days of the date of receipt of the complaint. Unresolved complaints
shall be presented to the commission at the next available open meeting.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the
Secretary of State on December 19, 2000.
TRD-200008839
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: January 8, 2001
Proposal publication date: October 6, 2000
For further information, please call: (512) 936-7308
16 TAC §§25.451, 25.453, 25.454, 25.457
The Public Utility Commission of Texas (commission) adopts
new §25.451, relating to the Administration of the System Benefit Account; §25.453,
relating to the Targeted Energy Efficiency Programs; §25.454, relating
to the Rate Reduction Program; and §25.457, relating to the Implementation
of the System Benefit Fee by the Municipally Owned Utilities and Electric
Cooperatives with changes to the proposed text as published in the September
15, 2000
Texas Register
(25 TexReg 9145).
The rules are necessary to implement provisions of the Public Utility Regulatory
Act (PURA) §39.901 and §39.903, relating to the System Benefit Fund
(SBF). Section 25.451 establishes administrative requirements for the setting,
collecting, billing, and reporting of the system benefit fee, and reimbursement
of the low-income discount. Section 25.453 defines the criteria for energy
efficiency programs, administered by the Texas Department of Housing and Community
Affairs, that can be funded with the system benefit fee. Section 25.454 establishes
requirements for a rate reduction program for qualifying low-income customers
and outlines enrollment options for those customers. Section 25.457 establishes
the system benefit fee collection and reimbursement process for the municipally
owned utilities and electric cooperatives. These new sections were adopted
under Project Number 22429.
A public hearing on the proposed sections was held at commission offices
on October 23, 2000, at 9:30 a.m. Representatives from TXU Electric Company
(TXU); Reliant Energy Inc. (Reliant); American Electric Power Company, Inc.
(AEP); Electric Reliability Council of Texas (ERCOT); Texas Association of
Community Action Agencies, Inc. (TACAA); Texas Ratepayers' Organization to
Save Energy (Texas ROSE); Entergy Texas (EGSI); Texas Department of Housing
and Community Affairs (TDHCA); and Texas Industrial Energy Consumers (TIEC)
attended the hearing and provided comments. To the extent that these comments
differ from the submitted written comments, such comments are summarized herein.
The commission received comments on the proposed new sections from American
Electric Power Company, Inc. (AEP ED); American Electric Power Energy Services
(AEP Energy Services); Entergy Texas Distribution Company (EGSI-D); Reliant;
San Antonio City Public Service (San Antonio); Southwestern Public Service
Company (SPS); Texas Electric Cooperatives (TEC); TIEC; Texas Legal Services,
Texas ROSE, American Association of Retired Persons (AARP), Consumers Union
Southwest Regional Office, and Public Citizen Texas Office (jointly referred
to as Consumer Commenters); Community Services, Inc.; TACAA; Panhandle Community
Services (PCS); TDHCA; El Paso Electric (EPE); Texas New Mexico Power Company
(TNMP-Retail); Texas New Mexico Power Company (TNMP-TDU); and TXU.
In the preamble to the proposed rule, the commission posed the following
questions:
Question No. 1: The system benefit fund fee funds
four programs pursuant to PURA §39.903(e). The statute does not specify
the order in which these programs shall be funded. Should a funding priorities
order be established?
AEP Energy Services, Consumer Commenters, TNMP-TDU, TNMP-Retail, and TDHCA
stated that a funding priority should not be established. AEP Energy Services,
TNMP-TDU, and TNMP-Retail stated that Subchapter Z of PURA contains no mention
of funding priorities and developing such priorities may be outside the commission's
authority. Consumer Commenters and TDHCA argued the wording of Senate Bill
7 (SB7), 76th Legislature, Regular Session, indicates an intent by the framers
to fund all four allowable activities. Consumer Commenters stressed that all
activities are equally important and should be fully funded as reflected by
the allowance for an enhanced funding level--up to $0.65 per megawatt hours
(MWh)--and the mandates of Senate Bill 86 (SB86), 76th Legislature, Regular
Session.
TXU stated that all beneficiaries of the system benefit fund (SBF) are
important and should be supported by the fund, but that the fund should be
carefully monitored to ensure that it remains viable and stable. TXU argued
that the retail electric providers (REPs) should not be required to offer
the discount when the risk of a deficit in the SBF would not allow a full
reimbursement, and REPs should be allowed to discontinue the discount when
no funds are available in the SBF. TXU offered language to that effect. SPS
stated that it had no position regarding the order in which programs should
be funded, but stated that the targeted energy efficiency programs should
be funded at least at a level that complies with the United States Department
of Energy Weatherization Assistance for Low Income Persons (U.S. DOE WAFLIP)
cost-sharing requirements so as not to place the state at the risk of losing
federal funds.
Reliant and TIEC stated that the commission should establish a funding
priority for the use of the money under the SBF. Reliant stated that, particularly
in the early years, when the school funding loss mechanism is in effect, even
$0.65 per MWh may not be sufficient to cover all activities, and that, absent
a legislative directive, the commission should timely tailor the lower priority
programs to match available funds. TIEC argued that absent some priority order
that separates the low-income discount programs, high revenue requirements
for the school funding loss program and targeted energy efficiency programs
will cause a revenue shortfall for the low income discount program, and will
raise the cap to $0.65 per MWh. TIEC further argued that the $0.65 fee cap
was not intended to make up for the other programs' potentially higher revenue
requirements.
TIEC, in reply comments, disagreed with the assertion that the commission
does not have the authority to establish funding priorities and claimed that
the Consumer Commenters' reliance on PURA §17.004(a)(11) is misplaced
because the provision only established the right to access programs, and not
to set new funding levels. TIEC reiterated that a funding order is necessary
to address the potential problem of under-collection.
AEP Energy Services, in reply comments, agreed with TXU that the SBF rule
should not require REPs to offer the low-income discount if no funds are available
for reimbursement to the REPs. AEP Energy Services further argued that if
this were not the case, PURA §39.903(d) would not direct the commission
to report to the Joint Electric Restructuring Legislative Oversight Committee
if the SBF is insufficient to fund the purposes set out in the statute.
The commission takes note of the fact that while the statute lists four
separate programs to be funded by the SBF, it does not establish a funding
priorities order. The one potential clarification is provided through the
commission's ability to raise the fee cap to $0.65 if the amounts generated
by the fee are not sufficient to cover the low income discount program. The
commission agrees with TIEC that PURA §17.004(a)(11) provides for access
to services, but says nothing about funding levels. Since no provision in
the statute sets out priorities for the SBF, the commission finds that a funding
priorities order is not a timely issue to be resolved in this rulemaking,
and thus will not address this issue here. The commission does, however, agree
with those commenters who stressed the need to ensure that the fund remain
viable and stable. To achieve this goal, the commission will have to rely
on accurate estimates for the fund revenues and expenditures, and closely
monitor the fund's cashflow to insure that revenues do not exceed costs. At
this time, it is reasonable to believe that the fee will generate revenues
adequate to cover all programs. Should the amount of revenues in the fund
not be sufficient to cover all programs, the commission has the ability to
revise the fee at any time during the year to make up for any potential shortfalls.
In addition, the commission has the responsibility pursuant to PURA §39.903(d)
to report to the electric utility restructuring legislative oversight committee
if the system benefit fee is insufficient to fund all programs. For these
reasons, the commission declines to make the change requested by AEP Energy
Services and TXU that would expressly allow the REPs to stop providing the
low-income discount if there is a risk of a shortfall in the fund.
Question No. 2: The pilot project for the competitive
electric market in Texas will start June 1, 2001. Should this pilot program
include a low-income customer discount program? If so, what would be the best
way to implement such a program?
Consumer Commenters, TDHCA, and Reliant stated that the low-income discount
program should be included in the pilot project. Consumer Commenters stated
that the system benefit programs must be available for eligible low-income
pilot project participants, who represent 20% of residential customers, to
test the market in the same manner in which full customer choice will be offered
beginning January 1, 2002. TDHCA stated that it is necessary to test a variety
of enrollment techniques, including automatic enrollment through the Texas
Department of Human Services (TDHS) programs and enrollment via the TDHCA
Comprehensive Energy Assistance Program at all 51 TDHCA subgrantees, who cover
all 254 Texas counties. Reliant stated that given the limited resources available,
these activities should be restricted to testing procedures rather than providing
benefits to low-income customers, particularly since PURA §39.903(g)
prohibits utilities from reducing existing programs available to low-income
customers prior to the commencement of customer choice.
AEP Energy Services, AEP-ED, TNMP-TDU, TNMP-Retail, and TXU stated that
the SBF programs should not be included in the pilot project. The companies
asserted that including the low income customer discount may cause confusion
in the administration of low-income programs, particularly since, consistent
with Reliant's comments, PURA §39.903(g) prohibits utilities from reducing
existing programs available to low-income customers prior to the commencement
of customer choice. Similarly to Reliant, TXU stated that time would be more
wisely spent working to develop fully the necessary components, such as the
Low Income Discount Administrator (LIDA), during the pilot project. AEP-ED
further argued that the inclusion of low-income programs in the pilot program
would be administratively burdensome and confusing. AEP-ED reiterated its
position in reply comments in response to the position held by the Consumer
Commenters.
TIEC had no position on this issue other than to say that the rule should
be clarified to reflect that any funds raised through the SBF prior to January
1, 2002, are limited to funds appropriated for the commission and Office of
Public Utility Counsel (OPUC) by the legislature. TIEC further stated that
any funds collected for any other purpose should not be recovered from retail
customers through a surcharge or any other means.
There are two low-income programs mandated under PURA §39.903 to be
funded by the SBF. One concerns weatherization and energy efficiency services;
however, pursuant to PURA §39.903(g), the utilities cannot stop providing
these services until after the onset of customer choice. The other one is
the rate discount program, which is built on the premise of having a large
number of customers enrolled and identified by each REP in order to provide
the monthly discount. The process of developing the databases and systems
necessary to effect customer enrollment may be lengthy and will require frequent
testing before it can be utilized on a large scale. It is not certain that
such a system will be in place by June 1, 2001, when the pilot project begins.
The commission, therefore, declines to require that the low-income programs
be included in the pilot project, as requested by the Consumer Commenters.
The commission does, however, agree with Reliant and TXU who propose to use
the period after the start of the pilot project to test various aspects of
the low-income discount program, including the enrollment procedures. Given
this conclusion, it is not necessary to address TIEC's comments regarding
the funds raised prior to January 1, 2002; in addition, the recovery of funds
already raised has been adequately addressed in the commission orders.
Comments on the Text of the Proposal
With regard to §25.451, AEP Energy Services commented that the rules
are burdensome and costly for the REPs, particularly the reporting requirements.
SPS commented that the rules represent a reasonable compromise by all parties
and expressed support for the rules as published. AEP-ED stated that the general
framework of the rules is reasonable, but the company is concerned with a
few specifics.
San Antonio suggested that the "retail electric provider" definition in §25.451(c)
is not broad enough to encompass municipally owned utilities and electric
cooperatives (MOUs and Coops) that have adopted choice and that a new definition
of "competitive retailer" should be added to include those MOUs and Coops.
While the commission agrees in principle with San Antonio regarding the
limited meaning of "retail electric provider," creating a new definition for
"competitive retailer" may prove to be confusing, and existing definitions
in commission rules do not fit exactly. The commission will, however, add
the words "municipally owned utility and electric cooperative" in §§25.451,
25.453, and 25.454, wherever the reference to REPs also implies responsibilities
for the MOUs and Coops.
With regard to §25.451(c)(1), AEP Energy Services and TNMP-Retail
proposed to change the word "electric" to "retail" as it relates to the definition
of a customer.
The commission has made this change; the amended definition is now in §25.451(c)(5).
With regard to §25.451(c)(7) as proposed, AEP Energy Services recommended
deleting the last sentence in this subsection, which clarifies how the SBF
fee is assessed. In §25.451(d)(3), the word "retail" should be moved
before "electric." TIEC stated that the commission had previously made a decision
on the allocation of the SBF fee in P.U.C. Substantive Rule §25.344(h)(2)(F)
(relating to Cost Separation Proceedings); specifically that it be based on
the amount of kWh of electric energy used, "as measured at the meter and adjusted
for voltage level losses." TIEC suggested adding language reflecting this
decision to the definition of SBF fee in proposed §25.451(c)(7). In its
replies, AEP-ED agreed with the language proposed by TIEC regarding voltage
level adjustment based on line loss factors approved for each customer class.
The commission declines to delete the last sentence in the proposed §25.451(c)(7),
as requested by AEP Energy Services. While the sentence does repeat the statute,
it is necessary to maintain clarity. The commission also agrees with TIEC's
proposed language regarding the way energy usage is measured and has made
the corresponding change in the new §25.451(c)(8). The commission also
has made the change in §25.451(d)(3), relating to moving the word electric
before retail.
With regard to §25.451(d)(1) and (d)(3), AEP-ED requested clarification
of the system benefit fee determination process, mainly whether new tariffs
would have to be filed whenever the fee is changed. Consumer Commenters suggested
specifying that the fee setting process would start in July 2001.
The commission finds that a clarification regarding filing of tariffs whenever
the system benefit fee changes is needed and agrees to add new language requiring
filing of annually updated tariff sheets in §25.451(d)(3). The commission
finds that the change proposed by Consumer Commenters is not necessary.
With regard to §25.451(e)(3)(B), Consumer Commenters stated that a
minimum funding level should be established in the rule for the targeted energy
efficiency programs because PURA intended that these programs stay at the
current level of funding; local weatherization agencies require a predictable
funding levels; utilities have the option of including targeted energy efficiency
program savings in their plans; and the commission has provided direction
for establishing the funding level. Consumer Commenters pointed to a summary
filed in Project Number 22979,
PUC Proceeding to
Monitor Utility Funding Commitments and Expenditures in Energy Efficiency
and Low-Income Programs
, which contains a calculation of each company's
planned low-income energy efficiency funding for 2001. Although the funding
levels were at 0.12% of projected 2002 revenues, TXU's and Reliant's expenditures
fell below that target. Consumer Commenters stated that the imbalance is the
result of electric industry restructuring. Consumer Commenters further stated
that TXU and Reliant were supposed to work out their agreements with the low-income
intervenors regarding energy efficiency funding, which were also supported
by customers in the deliberative polls, but after SB7 passed, the companies
delayed consideration of the integrated resource planning (IRP). Consumer
Commenters argued that since the legislature did not intend for the low-income
programs to be abolished, the SBF rule is the appropriate place to even the
scales and remedy the commission failure to promote funding of such programs
in the two largest service areas. Consumer Commenters stated that they had
asked the commission to establish a floor of $17 million annually for these
programs and that this standard should carry into the restructured market.
They recommended that the rule be amended to include either annual funding
at the level of 0.12% of total annual unadjusted gross industry revenue in
the preceding year, or a funding level of $17 million to be adjusted annually
based on the consumer price index or growth in system sales.
Panhandle Community Services (PCS) stated it supports the TDHCA weatherization
program because it is the only program that addresses the problem of high
utility bills on a permanent basis. PCS further stated that it currently has
over 420 qualified families on its waiting list for the TDHCA administered
weatherization services, and that the SBF should provide sufficient funding
of at least $17 million to increase services and meet the needs of low-income
people. EGSI-D stated that it supports uniform statewide funding for targeted
energy efficiency programs at the level of 0.12% of gross Texas revenues.
In its reply, TXU asserted that contrary to the Consumer Commenters' statements
regarding the stipulation on funding for low-income weatherization programs,
the only commitment TXU made was to use its best efforts to extend its then-current
amount to the TDHCA weatherization program through December 31, 2001. TXU
also stated that it had complied with that promise and that Consumer Commenters
were incorrect to say that TXU was under a requirement to resolve low income
energy efficiency issues in TXU's energy efficiency filing.
TXU filed additional comments, after the due date, in support of the TDHCA's
funding level at the 0.12% of Texas electric utilities' annual total unadjusted
gross revenues, after January 1, 2002.
The commission, in agreement with PCS and Consumer Commenters, expresses
strong support for low-income energy efficiency programs and encourages TDHCA
to develop a comprehensive and cost-effective plan to deliver such services
to those in need. The commission, however, finds that contrary to Consumer
Commenters' comments, PURA does not contain language that provides for a specific
funding level for the low-income energy efficiency programs. Historically,
the amounts utilities spent on low income energy efficiency efforts were a
matter to be negotiated between the utilities and the low-income intervenors.
While some utilities had pledged to spend 0.12% of total Texas revenues, there
were others who had not. The commission notes that pursuant to this rule,
the revenue requirement for the various programs will be determined annually
at the time the system benefit fee is set, and part of this process will be
consideration of a plan that TDHCA is required to file. The funds requested
by TDHCA are also subject to the final appropriation by the legislature. In
addition, the commission must consider that funding needs of some of the programs
covered by SBF are uncertain at this time and may remain difficult to estimate
even in the future. Because of this uncertainty, the commission must preserve
a level of flexibility when determining SBF revenue requirements. The commission,
therefore, declines to set a specific funding level for any of the programs.
It is, however, the commission's intention to fund all programs at their requested
levels.
With regard to §25.451(e)(3)(C), AEP Energy Services and TNMP-Retail
stated that the reporting requirements in this section are misplaced and that
the information needed to develop revenue requirement will be gathered in §25.451(i).
AEP Energy Services suggested including year-to-date totals in the monthly
reports and having the commission staff estimate the low-income discount reimbursement
based on the monthly reports. AEP Energy Services, TXU, Reliant, and TNMP-Retail
also suggested that providing information through May 2002, by June 1, 2002,
is not possible, and that either the reporting period or the due date needs
to be changed. TXU suggested June 30th as the deadline. Reliant asked that
the deadline be extended by three months. "Previous" year should be clarified
to mean "calendar" year and not state fiscal year, as recommended by AEP Energy
Services. AEP Energy Services and TNMP-Retail objected to the inclusion of
the aggregate electric energy consumption in kWh for all enrolled low-income
customers for the purposes of determining revenue requirement, and proposed
to delete this requirement. AEP Energy Services, TXU, and TNMP-Retail also
objected to the requirement to provide the commission with copies of promotional
materials about the discount program and asked that it be deleted. TXU suggested
that the education process should be carried out by the Texas Department of
Human Services because SB7 does not require the REPs to spend money on customer
education and there is no provision for reimbursement from the fund. Also,
a broad education program may cause too many inquiries from ineligible people
and overwhelm the fund. TXU recommended deleting §25.451(e)(3)(C)(v).
Reliant did not object to the requirement to provide promotional materials,
but wanted to make it clear that the commission would not be approving such
materials. Reliant also proposed moving this requirement to §25.454(f)(4).
The commission finds that the reporting in proposed §25.451(e)(3)(C)
was required for different reasons than the reporting in subsection (i); specifically,
it was proposed to help determine revenue requirement for the low-income discount
program. To simplify reporting requirements, the commission agrees that the
several reports can be combined into one, along the lines of AEP Energy Services'
proposal, for monthly reporting with year-to-date totals, and has made the
corresponding change. In addition, the commission has moved the reporting
requirement to §25.451(j), relating to reimbursement. The reports will
be due on the 20th of each month, starting in January 2002. The commission
also has made the clarifying change by adding the word "calendar" after the
word "previous," as recommended by AEP Energy Services. The commission finds
that aggregate data, provided by the REPs, municipally owned utilities, or
electric cooperatives, regarding the enrolled low-income customers' electric
energy usage is necessary for the purposes of creating accurate estimates
of expenditures for the discount program. The commission, therefore, declines
to delete this requirement. The commission also declines to delete the requirement
to provide promotional materials; however, the commission has made the change
requested by Reliant to clarify that the commission will not be approving
such materials. This requirement has been moved to new subsection §25.454(f)(4)(E).
TNMP-Retail recommended a change in §25.451(f) by adding "or retail
electric provider" after the words "an electric utility" because it would
be the REPs who would be most concerned about the impact of the non-bypassable
charges on headroom. AEP-ED asked for a clarification of this subsection,
particularly the provision that allows an electric utility to seek a change
to the commission staff's estimate of electric sales because it is not clear
why TDUs would be interested in the staff's estimates. AEP-ED asserted that
REPs would be more concerned about these estimates. AEP-ED also stated that
the reference to the annual update of generating utility data report should
be deleted and replaced with a requirement for the commission staff to file
an estimate of sales.
In its reply, AEP-ED clarified that it was not suggesting elimination of
the commission staff's electric sales estimates, but that in the new world,
the staff should not be estimating statewide retail sales but only those sales
subject to the SBF fee.
The commission agrees with AEP-ED that this subsection needs to be clarified.
It seems likely that in the competitive marketplace, the commission will no
longer publish reports, such as the Annual Update of Generating Electric Utility
Data. At this time, it is not clear what type of report, if any, will replace
it. The commission, however, will need to know the amount of retail sales
of electricity in the areas initially under competition and, eventually, other
areas as they opt in, in order to set the system benefit fee. The commission
finds that the issue here is not so much who is concerned about the correct
estimates, as who has the most accurate sales numbers and can provide them.
Consequently, the commission makes the following change to §25.451(f):
"The TDUs, and when applicable, the MOUs and Coops, upon request by the commission,
shall supply an aggregate number of the amount of electric retail sales in
their service areas for the preceding calendar year, by April 1 of each year.
Upon receipt of such information, the commission will file the aggregated
retail electric sales in the relevant areas, after adjusting for projected
growth."
With regard to §25.451(g), TNMP-TDU and AEP-ED claimed that giving
TDUs five days to forward the payments to the comptroller is not enough time
and suggested amending the language to extend the time until the 20th day
of the following month. Both claimed that the companies need time to close
their books for the month before sending payments; and AEP-ED concluded that
any concerns regarding the cashflow should be resolved in the legislative
appropriations process. Reliant acknowledged that electronic payments could
be handled within five business days, but expressed concern that manual payments
may take longer for the TDUs to process. Reliant suggested amending this subsection
to specify that TDUs should forward collected fees to the comptroller by the
15th of the following month.
The commission agrees that forwarding payments every five days may prove
burdensome for the TDUs. Therefore, the commission has made the change to
a once-a-month payment, with the due date on the 20th day of each month. To
forward system benefit fee payments collected from the REPs, it should not
be necessary for the TDUs to close their books, since this is a pass-through
transaction. The new due date will provide more than sufficient time for the
TDUs to process the system benefit fee payments from the REPs and forward
them to the Comptroller of Public Accounts. At the same time, the new due
date should not affect the fund's cashflow or its capacity to cover full discount
reimbursements.
With regard to §25.451(h)(1), San Antonio suggested that this subsection
should also include a reference to the Terms and Conditions for Retail Distribution
Service Provided by MOUs and Coops (proposed new §25.215). AEP-ED noted
a new issue that arose in the Terms and Conditions of Transmission and Distribution
Utilities' Retail Distribution Service (new §25.214), relating to a
possibility that a retail customer may avoid the system benefit fee by switching
to new on-site generation. AEP-ED suggested that such customers should be
treated in a way that is consistent with the way they will be treated for
the purposes of stranded cost collections, as defined in PURA §39.262(k).
In its reply, AEP-ED recognized that because the system benefit fee is
a matter between a TDU and a REP, its initial recommendation to treat those
customers who switch to on-site generation in the same manner as for the purposes
of stranded cost collection would not work. Alternatively, AEP-ED proposed
that the commission staff include in its revenue requirement a recognition
of the reduction in MWh attributable to such customers.
The commission agrees with San Antonio's suggestion regarding the reference
to the Terms and Conditions for Retail Distribution Service Provided by MOUs
and Coops (§25.215), since this new rule defines the relationship between
the REPs and the MOUs and Coops, and has made the corresponding change. As
mentioned by AEP-ED, retail customers who switch to on-site generation may
be able to avoid paying the system benefit fee. However, to the extent that
they consume any power, such as standby, delivered to them by a TDU, the commission
finds that they should be assessed the system benefit fee based on the amount
of actual power consumption. The commission has added corresponding language
in the new §25.451(h)(3).
With regard to §25.451(h)(2), AEP Energy Services and TNMP-Retail
objected to the requirement that the system benefit fee be accounted for separately
in the REPs' records because the TDUs bill the REPs for the fee. TIEC recommended
adding language to clarify that the system benefit fee be based on the kWh
of electric energy used by a customer, as measured at the meter and adjusted
for voltage level losses. Consumer Commenters suggested that the unbundling
of the system benefit fee on a consumer's bill should be deferred to Project
Number 22255,
Rulemaking Proceeding for Customer
Protection Rules for Electric Restructuring Implementing Senate Bill 7 and
Senate Bill 86
.
The REPs will receive a monthly bill from the TDUs indicating the amount
of the fee; therefore, the commission finds that there is no need for further
separate accounting of the system benefit fee. The commission has made the
corresponding change. The commission finds that TIEC's recommendation has
already been addressed in new §25.451(c)(8). The commission finds that
the issue raised by Consumer Commenters has been adequately addressed in the
customer protection rules.
With regard to §25.451(i), AEP Energy Services, AEP-ED, and TNMP-Retail
stated that the due date for the monthly reports does not allow enough time
to prepare such reports; the due date should, therefore, be postponed to the
second following month; AEP-ED suggested the 20th of the following month.
AEP Energy Services asserted that there is no reason for expedited reports
and that if a REP wants to be reimbursed earlier, it can always choose to
file sooner. AEP Energy Services suggested replacing "prior" with "reporting."
AEP Energy Services, TXU, AEP-ED, and TNMP-Retail stated that the data in §25.451(i)(1)(A),
(B), (C), and (D) is not necessary, is costly and burdensome, and should be
deleted. The requirement, if kept, should apply to all REPs. AEP Energy Services
asserted that billing and collection of the SBF fee is a matter between the
TDUs and the REPs and is governed by the provisions in Project Number 22187,
In their replies, AEP-ED and AEP Energy Services stated that they agree
with TXU's observation regarding billing and collection of the SBF fee--TDU
bills the REP and REP pays the fee to TDU--consequently, subparagraphs (A)-(D)
should be deleted because REPs will not track the fee by individual customer.
The commission notes that it may be preferable for the REPs not to have
to file any reports; however, reports are necessary for the purposes of accurate
and prompt reimbursement to the REPs. In addition, the commission will use
such reports for precise estimating, auditing, and fund management purposes.
Therefore, all REPs who serve residential customers must file one monthly
report. The commission finds merit in combining the reports into one type
of report pursuant to §25.451(j), due monthly and with running year-to-date
totals. In addition, the commission has shifted part of the information, mainly
proposed §25.451(i)(1)(A)-(B), to be reported by the TDUs, and shifted
subparagraphs (C)-(G) to §25.451(j). The commission finds that the due
date on the 20th of the following month should give REPs enough time to compile
the needed information. The commission declines the change suggested by AEP
Energy Services to replace "reporting" with "prior." The commission does not
agree with the inclusion of "adjustments for uncollectibles" as suggested
by AEP-ED, and emphasizes that the amount of the system benefit fee paid by
the REPs, MOUs, or Coops cannot be adjusted for uncollectibles. The commission
also notes that with the new fee payment due date, on the 20th day of each
month, Reliant's concern should be alleviated.
With regard to §25.451(j), TXU commented that while the commission
has five working days to prepare an authorization for reimbursement to the
REPs, there is no deadline for the commission to deliver the authorization
to the Comptroller. TXU suggested adding the words "deliver to the Comptroller"
in the third sentence of this subsection.
The commission finds that TXU's proposed change clarifies the commission's
responsibility, and has made the corresponding change.
With regard to proposed §25.451(k), TNMP-TDU and Reliant proposed
amending this subsection to allow the utilities to recover the SBF assessment
prior to January 1, 2002, through their annual reports for 2001. TXU suggested
that language regarding cost recovery through an annual report or, for those
utilities that do not have earnings, by petitioning for regulatory relief,
should be added to this subsection.
In its reply, AEP-ED agreed with TXU's addition to this subsection regarding
the recovery of system benefit fees assessed to utilities prior to January
1, 2002.
The commission has issued several orders that deal with the collection
of the system benefit fee prior to January 1, 2002. Each order states the
amounts to be collected, the assessment per utility, the timing of payments,
and the recovery method. The commission finds the utilities' comments are
sufficiently addressed in each order and that there is no need to restate
these details in the rule, particularly since the period within which they
apply is very limited.
With regard to §25.453, Consumer Commenters indicated that the proposed
section is overly prescriptive and ambiguous. Consumer Commenters and TACAA
stated that the TDHCA weatherization providers are not utilities or competitive
energy service providers, and that it is not within the commission's authority
to monitor TDHCA.
The commission strongly supports comprehensive and cost-effective energy
efficiency programs and all efforts that make them available to people in
need. The commission, however, recognizes that funding of targeted energy
efficiency programs is subject to final appropriations by the legislature.
In addition, the commission has no oversight authority over TDHCA and the
administration of its programs, as that lies with the legislature. The commission
emphasizes that it is the responsibility of TDHCA to administer its programs
in the most cost-effective manner, while ensuring that all eligible customers
receive an equitable share of services. The commission finds that the rule
provides proper guidelines to ensure quality services to low-income customers,
while maintaining the integrity of the program with minimal oversight by the
commission. To avoid any potential interpretation that the commission has
authority over TDHCA regarding administration of the energy efficiency programs,
the commission has deleted subsection (k) relating to unspent funds, and has
made changes to proposed subsection (h)(2)(F) and (H), and deleted proposed
subparagraphs (C) and (D). The commission, however, is responsible for the
proper administration of the SBF and is answerable to the legislature in this
regard. Therefore, the commission will make information on targeted energy
efficiency programs available to the legislative oversight committee. The
commission has replaced §25.453(k) regarding unspent funds with new subsection
(k) relating to legislative reports.
Consumer Commenters claimed that PURA is clear in its intent that existing
programs, in particular the piggyback programs, operated by the TDHCA through
the existing weatherization network, are to continue under the SBF, and that
PURA gives no indication that the programs should operate any differently
than they do today. Consumer Commenters claimed that these programs have a
proven track record in bringing quality services, reductions in energy consumption,
and lower energy bills to low-income Texans. Consumer Commenters stated that
the rule should recognize the advantages and benefits of the existing piggyback
programs. TDHCA stated that the language in PURA §39.903 implies that
it is to continue the current program structure of operating utility funds
in coordination with the federally funded weatherization assistance program
under the SBF, with the new obligation to report energy and demand savings
achieved under these programs so that utilities may count these savings towards
the energy efficiency goal mandated in PURA §39.905. TACAA stated that
it generally supported the comments provided by TDHCA because the programs
are continually monitored to assure that the measures are cost-effective,
properly installed, and that all health and safety codes are met. TACAA argued
that imposing additional requirements would increase cost and threaten the
economics of the program.
In reply comments, TDHCA stated that many of the TDHCA's previous comments
were specific to energy efficiency programs based on the U.S. DOE WAFLIP,
and may not be applicable to programs developed outside of the U.S. DOE WAFLIP
network.
PURA §39.903(e) requires that TDHCA administer targeted energy efficiency
programs in coordination with existing weatherization programs. The term "coordination"
is defined as harmonious functioning of parts for the most effective results.
This does not necessarily require that the SBF funded programs operate in
conjunction with the WAFLIP. The commission does, however, recognize the value
and quality of the existing weatherization programs. It is for this reason
that the rule is structured such that these programs can continue under the
SBF without revision, as reflected in §25.453(e), which states that "programs
offered under the system benefit account shall maintain TDHCA's current delivery
structure and quality standards unless alternative programs are necessary
to meet performance requirements under this section" and proposed §25.453(h)(2)(F),
relating to solicitation process. The commission, however, also recognizes
the need for flexibility to allow for alternative programs if the current
delivery mechanism fails to expend all available funding. The commission finds
that the rule provides for the proper structure to allow for both the continuation
of current programs and the development and implementation of alternative
programs when the need arises.
Consumer Commenters and TACAA claimed that there are too many references
to §25.181, relating to the Energy Efficiency Goal, in proposed §25.453.
The commission finds only three references in proposed §24.453 to §25.181.
References under §24.453(d) and §24.453(h)(4) are designed to harmonize §24.453
with the provisions in §24.181 that allow electric utilities to count
savings achieved under the SBF towards the legislative mandate of PURA §39.905.
The third reference is found in proposed §25.453(h)(2)(H), and refers
to the customer protection provisions in §25.181(n). The commission recognizes
that the customer protection provisions under §25.181(n) do not easily
apply to services rendered under the piggyback program. The commission, however,
believes that low-income customers should enjoy the same level of customer
protections as do residential and small commercial customers who receive energy
efficiency services through §25.181. As the rule only provides the general
requirements for targeted energy efficiency programs under the SBF, rather
than program design, the commission finds that the rule should encourage TDHCA
to develop customer protection provisions that fit specific program designs.
The commission has revised the language accordingly.
TDHCA requested that whenever the reference of U.S. DOE WAPFLIP is used
that this be corrected to the acronym U.S. DOE WAFLIP (Weatherization Assistance
for Low Income Persons).
The commission has made the revision.
With regard to §24.453(a), TDHCA and CSI requested that the wording
"...and cost for customers" be deleted from §24.453(a) for there are
factors beyond energy consumption, such as fuel cost and cost per kWh, that
impact the cost of energy, but over which TDHCA has no control. TACAA emphasized
that the goal of the weatherization program is to reduce energy consumption
and energy costs. In reply comments, TDHCA clarified that one of the primary
goals of its weatherization assistance program is to reduce energy consumption
and energy costs for low-income customers. TDHCA recommended, therefore, that
wording pertaining to costs to customers be retained, but that these costs
be defined as the cost of energy at the time of measure installation.
The commission recognizes that the cost of energy may increase due to other
factors, such as increases in price of energy on the wholesale market or a
customer choosing a REP who offers higher rates. However, it is also possible
to design energy efficiency programs that do not reduce energy costs even
if other factors, such as increases in the price of energy, do not come into
play. Energy efficiency providers will not be held responsible for increases
in energy costs due to factors beyond their control, as long as the program
is designed to reduce energy costs at the time of measure installation. This
is implicit in substantive rule §25.181, and will be implicit in the
requirements for programs funded through the SBF. Adopting the language proposed
by TDHCA would in effect eliminate this implicit requirement, because it does
not include this clarification. The commission therefore declines to make
the proposed revision.
With regard to §25.453(d), TXU, at the request of staff during the
public hearing, provided further comments as to the structure, under which
savings should be reported under §25.453(d) so that they may count towards
the requirements of §25.181. TXU recommended that TDHCA (1) include an
estimate of the amount of the savings that will be produced in each utility's
service area in its annual low-income energy efficiency plan required under §25.453(h);
and (2) include the amount of savings actually achieved in each utility's
service area in its annual energy efficiency report required under §25.453(j).
TXU offered draft language to this effect to be incorporated into the rule.
AEP-ED agreed with TXU that the rule should establish a procedure for requiring
TDHCA to report to the TDUs the amount of deemed savings achieved in the TDUs'
respective service areas. Consumer Commenters, in their reply comments, stated
that meeting the energy efficiency goal is solely the responsibility of the
TDU, and it is the TDU's choice to have savings achieved in the SBF-funded
targeted energy efficiency programs count towards the TDU's energy efficiency
goal. Consumer Commenters disagreed with TXU and AEP-ED that the rule should
define a mechanism for how and when TDHCA will provide the utilities with
information regarding projected and achieved savings.
TDUs have the sole responsibility to achieve the demand saving goals set
out in PURA §39.905. However, §25.181, relating to the Energy Efficiency
Goal, does allow the TDUs to count demand savings achieved under targeted
energy efficiency programs funded through the SBF. For planning and budgeting
purposes, the TDUs must be able to project the savings achieved under the
SBF in their Energy Efficiency Plans and be able to report actual demand savings
in the Annual Energy Efficiency Report as required under §25.181. The
language proposed by TXU does not require that TDHCA report to the TDUs. It
requires that TDHCA report the information to the commission in a format that
allows the utilities to use the information for the purposes outlined in §25.181.
The commission, therefore, adopts the language as proposed by TXU. The commission
has added new subparagraph §25.453(h)(2)(A)(v) and has revised the language
in §25.453(j)(1).
With regard to §25.453(g), Entergy-D stated that it supported a seamless
transition between the current utility-funded programs and the programs supported
by the SBF, and that in order to do so adequate funding levels must be maintained
to protect local providers against payment delays. Consumer Commenters agreed
with Entergy-D, but recommended that the language be clarified to require
that transition agreements be completed and signed by June 1, 2001.
The commission finds that the rule should provide for a schedule by which
transition agreements are to be completed to ensure a seamless transition
of the programs from the current direct utility funding mechanism to the SBF
funding mechanism. The commission has revised the rule accordingly.
With regard to §25.453(h), TDHCA requested that the wording in §25.453(h)
referencing the "low-income energy efficiency plan" be changed to read "operational
plan for low-income energy efficiency program" because an energy efficiency
plan relates to an electric utility, not to a state agency.
The commission finds that TDHCA's interpretation of the reference to energy
efficiency plan is overly restrictive. The current wording in the rule allows
TDHCA to operate multiple programs under one plan if needed. The commission
therefore declines to make the revision.
With regard to §25.453(h)(2), TDHCA requested that the wording referring
to the "legislative mandate and" be struck from §25.453(h)(2), for the
mandate refers to an electric utility, not a state agency. CSI commented that
the legislative mandate should be specified because it may be open to interpretation.
The legislative mandate referred to in the rule does not refer to a utility
but to the mandate of PURA §39.903(e). However, in order to avoid any
potential confusion, the commission will adopt the recommendation by CSI and
specify the proper citation. The rule has been revised accordingly.
With regard to §25.453(h)(2)(A), CSI suggested a change in wording
that, according to CSI, would eliminate the interpretation that these requirements
are placed on individual contracts, rather than for all programs.
Section §25.453(h)(2)(A) clearly refers only to programs. The commission,
therefore, finds a revision unnecessary.
With regard to §25.453(h)(2)(E), TDHCA requested that the word "costs"
be added after the word "outreach" because outreach costs are a separate and
in addition to the administrative costs.
The commission finds that outreach activities are an administrative function,
and that it is not appropriate to allocate additional funds for this purpose
outside the administrative cap. The commission therefore declines to make
the revision. However, the commission has deleted subparagraphs (C) and (D)
as they are duplicative of subparagraph (E) and may create the impression
that outreach and technical assistance are functions separate from administrative
functions.
With regard to proposed §25.453(h)(2)(F), TDHCA requested that the
first sentence be struck and replaced with "A statement of the TDHCA process
used to identify new energy efficiency service providers" because TDHCA has
a solicitation process in place that complies with state law and U.S. DOE
requirements.
The commission finds that the current language will allow TDHCA to use
its current solicitation process as one method to select providers. The commission
finds that it is not appropriate to restrict TDHCA's solicitation process
for programs funded through the SBF to only one approved by U.S. DOE. The
commission, therefore, declines to make the revision.
With regard to proposed §25.453(h)(2)(G), TDHCA requested that any
reference to a public participation process be struck because TDHCA has policies
in place that comply with state and federal law.
The current language merely requires that TDHCA describe its public participation
process. Prescribing a specific public participation process in a rule applicable
to programs funded through the SBF would be too restrictive. The commission,
therefore, declines to make the proposed change.
With regard to proposed §25.453(h)(2)(H), TDHCA requested that all
wording regarding grievance procedures be struck because TDHCA has a U.S.
DOE-approved grievance procedure in place. CSI suggested changing the wording
from complaint to grievance in the second sentence, that clauses (i) though
(iii) be deleted, and that TDHCA's existing procedures should be referenced.
In reply comments, TDHCA requested that the wording be changed to reflect
that all contracts shall include the U.S. DOE-approved or similar grievance
procedure.
As discussed, the rule has been revised to reflect language that encourages
TDHCA to have a grievance procedure in place for customers and energy efficiency
providers. Prescribing a specific grievance procedure in a rule applicable
to programs funded through the SBF would be too restrictive. The commission
therefore declines to make the proposed changes.
With regard to proposed §25.453(h)(3), CSI commented that the rule
should be clarified to reflect that not all programs which are coordinated
with weatherization program are subject to TDHCA or commission review, and
that units under WAFLIP receiving SBF funds may also be funded through the
Low Income Home Energy Assistance Program.
The current language merely encourages a comprehensive approach through
coordination with other programs. This is consistent with PURA §39.903(e),
which requires that targeted energy efficiency programs be implemented in
coordination with existing weatherization programs. As discussed, the commission
recognizes that the programs are not subject to commission review. The commission
also recognizes that not all units under the WAFLIP are funded by U.S. DOE,
and will, therefore, delete the reference to U.S. DOE.
With regard to §25.453(h)(3)(A), AEP-ED recommended that, since no
final determination has been made regarding the proposed price to beat, the
language should be modified to reflect that the value of the saved energy
shall be based on the applicable price to beat.
The commission recognizes that no final determination has been made regarding
proposed §25.41 (relating to the Price to Beat). In addition, as currently
proposed, each utility's area may have multiple price to beat rates for residential
customers. In order to maintain consistency, the commission finds that the
cost-effectiveness standard for the purposes of the targeted energy efficiency
programs funded through the SBF should be the price to beat based on the standard
residential rate, seasonally adjusted, and revises the rule accordingly.
TDHCA requested that the criteria in §25.453(h)(3)(A) be changed from
not to exceed ten years, to not to exceed 20 years, because the TDHCA U.S.
DOE approved energy audit includes measures with a life expectancy of 20 years.
In reply comments, TDHCA commented that limiting the life of the measure to
ten years for the purpose of calculating the cost-effectiveness and compensation
levels for programs other than the current program structure is appropriate.
TDHCA also clarified that this language should only apply to programs implemented
outside the existing weatherization network, but funded through the SBF. Consumer
Commenters, in reply comments, agreed with TDHCA that minimum program requirements
should only apply to programs that may be offered outside the existing weatherization
program network.
It is the commission's understanding that providers in the WAFLIP are compensated
for the full price of the measure if the measure is deemed cost-effective
by the EASY for Texas computerized audit tool. It is, therefore, acceptable
that the audit recognize the full life of a measure, even if it exceeds ten
years. However, programs that do not make use of the EASY for Texas computerized
audit tool should limit the cost-effectiveness criteria to up to ten years
or the life of the measure, whichever is less. In addition, the reported savings
required under §25.453(d) should be consistent with §25.181, relating
to the Energy Efficiency Goal, which limits the calculated savings to ten
years of the measure life. The commission has revised the language accordingly.
TDHCA requested that the wording in §25.453(h)(3)(E) be changed to
"TDHCA shall advise the PUC of any known potential health hazards associated
with the energy efficiency measures to be installed" because this is the responsibility
of TDHCA, not its subgrantees. CSI stated this subparagraph should be deleted
because individual providers cannot list all the potential adverse environmental
effects, and that listing even the known adverse effects may be detrimental
to the program. In reply comments, TDHCA indicated that it retracted its earlier
comments with the understanding that "programs" did not refer to individual
providers.
The commission determines that it is necessary to identify environmental
or health impacts associated with the measures installed. The intent is to
protect customers from potential health and safety hazards associated with
the installation of certain measures. The commission agrees that requiring
the disclosure of all "potential" adverse or health effects may be too broad.
The commission, therefore, finds that the disclosure should be limited to
"known potential" adverse environmental or health effects, and has made the
corresponding change.
TDHCA requested that the word "programs" be replaced with "TDHCA" in §25.453(h)(3)(F)
because this is the responsibility of TDHCA, not its subgrantees.
The current language allows TDHCA, as administrator of the programs, to
accept the responsibility to develop the procedures for measuring and reporting
the energy and peak demand savings. However, it also provides TDHCA the flexibility
to require programs to develop the procedures. This flexibility is particularly
necessary and cost-effective in case a need arises to develop programs outside
the existing WAFLIP program structure. The commission, therefore, finds it
unnecessary to revise the language.
TDHCA requested that the word "statewide" be replaced with "all appropriate
areas of the state" in §25.453(h)(3)(G) because new technologies, such
as solar water heaters, that require a certain amount of sunlight may not
be effective in all areas of the state.
The commission agrees that certain programs, projects, and technologies
may not be effective in all areas of the state. The language proposed by TDHCA
is acceptable because it ensures that these programs, projects, and technologies
will be made available statewide as appropriate. The rule has been revised
accordingly.
TDHCA requested that §25.453(h)(3)(H) be deleted because TDHCA programs
or measures are not eligible for incentive payments or compensation. CSI also
suggested deleting the reference to incentive payments, unless it would allow
units to be addressed with SBF funds only. CSI also commented that the subparagraph
should be clarified to reflect that this pertained to SBF funds only, and
offered language to allow for repairs necessary to protect the weatherization
measures.
Energy efficiency service providers who contract under the TDHCA program
would be eligible for compensation. Units addressed under the program may
be compensated entirely with SBF funds, as long as the program is coordinated
with existing weatherization programs. As incentive payments are only a method
of compensation, the commission agrees to delete the wording because it would
not preclude TDHCA from using an incentive payment method if it wishes to
do so. The commission also finds that limiting compensation to individual
measures may be too restrictive and would preclude TDHCA from compensating
providers for repairs necessary to protect energy efficiency measures. It
therefore replaces the word "measures" with "projects."
In addition, CSI commented that reference to energy costs in §25.453(h)(3)(H)(i)
should be deleted, consistent with the requested change to subsection (a).
CSI also requested that §25.453(h)(3)(H)(iii) be deleted because providers
cannot always predict the adverse environmental effects of the weatherization
work and should not be subject to questionable customer complaints.
The commission declines to make the revision to §25.453(h)(3)(H)(i)
based on the discussion under §25.453(a). The language in §25.453(h)(3)(H)(iii)
refers to programs or projects, not individual contractors. The commission
further determines that it is necessary to identify known environmental or
health impacts associated with the measures installed. The intent is to protect
customers from potential health and safety hazards associated with the installation
of certain measures. Accordingly, the commission declines to modify the language.
With regard to §25.453(h)(4), AEP-ED commented that if the commission
intends to allow public input in the commission review process of the TDHCA
low-income energy efficiency plan that the language should be revised accordingly.
Proposed §25.453(h)(2)(G), now (h)(2)(E) of the rule, requires that
TDHCA provide a discussion of its public participation process in the development
of the Low-Income Energy Efficiency Plan, including a summary of comments
received. It would, therefore, be duplicative to have the commission engage
in a public review process once the plan is filed.
TDHCA requested that the word "final" be struck from §25.453(h)(5)(C)
because TDHCA always requires that all work be completed before any payment
is made.
The current language allows TDHCA the flexibility to withhold any payment
until full work completion. However, prohibiting any payment unless the work
is fully completed may unduly preclude TDHCA from developing certain programs
if the need arises. The wording provides TDHCA the flexibility to devise different
payment arrangements to suit specific programs. The commission, therefore,
declines to modify the language.
TDHCA requested that the words "statistically significant" be deleted from §25.453(h)(5)(D)
because in compliance with U.S. DOE regulations, TDHCA routinely inspects
10% of all completed units. CSI concurred with TDHCA's comments and requested
that the reference to contract termination be deleted.
A statistically significant sample is usually less than 10% of installations.
The rule, however, should be flexible enough to allow TDHCA to inspect more
than a statistically significant sample. The language has been revised to
reflect that at least a statistically significant sample of program installations
is subject to on-site inspections.
CSI requested that the wording in §25.453(i)(2) be clarified to reflect
that the energy efficiency report data pertains to programs rather than individual
providers. CSI requested the same clarification for §25.453(j)(3).
Section 25.453(i)(2) and (j)(3) do pertain to individual providers. This
requirement is put in place to ensure that SBF funds are allocated and expended
equitably across the state, since the fee is generated from electric retail
customers on a statewide basis. The commission declines to make the revision.
TDHCA requested that in proposed §25.453(k) all wording after "No
later than..." be deleted and replaced with "TDHCA shall follow its established
procedures for monitoring, termination, and the identification of new service
providers." CSI's comments were consistent with TDHCA's. In addition, CSI
claimed that the requirements under §25.453(k)(2), (3), and (4)that
would require TDHCA to reallocate funds and/or select alternate providers
when program goals are not met is not feasible. According to CSI, this would
also require the termination of U.S. DOE WAFLIP contracts, because the law
requires that the SBF targeted energy efficiency programs operate in conjunction
with the U.S. DOE WAFLIP.
Consumer Commenters, in reply comments, agreed with the aspects of the
rule that would outline performance criteria and corrective action where the
goals of the program are not met. However, Consumer Commenters recommended
that the language be revised to allow TDHCA to work with contractors to expand
program operations on a fixed timetable or to respond to events and circumstances
that are outside of the provider and TDHCA's control.
As discussed, the commission recognizes that funding of targeted energy
efficiency programs is subject to appropriations by the legislature and that
the commission has no oversight authority over TDHCA and the administration
of its programs. Oversight responsibilities over TDHCA and the commission
lie with the legislature. The commission emphasizes that it is the responsibility
of TDHCA to administer its programs in the most cost-effective manner, while
ensuring that all eligible customers receive an equitable share of services,
based also on the fact that the system benefit fee is collected statewide.
Accordingly, the original language in §25.451(k) has been deleted, and
replaced by a reporting requirement for the commission to a legislative oversight
committee.
TDHCA requested the addition of new §25.453(l) to relate to the funding
mechanism for the targeted energy efficiency programs under the SBF. The TDHCA-proposed
wording would require monthly funding based on a 30-day need, and funds be
transferred via an interagency transaction within five days of receipt of
an invoice.
Funding transfers to TDHCA for the purpose of the targeted energy efficiency
programs shall occur by interagency agreement consistent with the requirements
set out in the new §25.451(k).
EPE commented that the company is exempted from the requirements of these
rules and suggested that this be noted also in §25.454 and §25.457.
The commission agrees with EPE that an exemption needs to be noted in §25.454(b),
relating to applicability, and makes the corresponding change. Section 25.457,
however, very clearly applies only to the municipally owned utilities and
the electric cooperatives; consequently, the commission declines to make the
additional change.
With regard to §25.454, Consumer Commenters expressed general support
for the rules with certain policy-related exceptions. For example, the rules
do not define rates that are eligible for the low-income discount as PURA
implies. Consumer Commenters stated that their previous comments supported
the low-income customers exercising choice to be able to take advantage of
rates that will be lower than POLR or the price to beat; consequently, the
rule should define the type of competitive rate package that would qualify
for the discount and provide for affordable rates and a high level of service.
Consumer Commenters also stated that the rules should reflect that the service
package must be similar to that of the affiliated REP under the price to beat,
with no interruptions or time-of-use prices; the cost should be lower than
the price to beat or POLR; and the discount should not be applied to electricity
sold in combination with other services.
The commission disagrees with the Consumer Commenters that "the rules do
not define rates that are eligible for the low-income discount as PURA implies."
PURA §39.903(h) states: "The commission shall adopt rules for a retail
electric provider to determine a reduced rate for eligible customers to be
discounted off the standard retail service package … or the price to
beat…, whichever is lower." The proposed rules set out a way for the
REPs to determine a reduced rate by calculating the discount in a specified
manner; in addition, the discount is linked to the price to beat (since, it
is assumed, this will be the lower rate) as directed by PURA. In developing
the discount calculation, the commission was guided by some of the same principles
mentioned by the Consumer Commenters; i.e., preserving low-income customers'
ability to choose from a variety of rate offerings, access to rates lower
than the price to beat, same level of service for all customers, and discount
to be applied only to electric service. The commission finds that the proposed
language assures that low-income customers will have access to the benefits
of competition, while at the same time maintaining high service standard and
affordable rates.
When setting the amount of discount pursuant to §25.454, Consumer
Commenters proposed that the commission invite testimony from other state
agencies, serving low-income customers, and the public regarding the impact
of high electric bills on poor people.
When the legislature established the system benefit fund, it no doubt did
so based on a basic understanding that electric bills pose a higher burden
on low-income customers and that competition may remove historic subsidies.
The rate reduction program under the fund was created with the sole purpose
of alleviating this burden. The commission finds that additional testimony
would not illuminate this issue further and is, therefore, unnecessary.
Consumer Commenters also noted that under the current proposal for establishing
the price to beat, the existing rate plans may be continued and, therefore,
there will not be only one price to beat per service area. This would make
calculating the discount as it is proposed in the rules difficult and the
commission must return to setting a straight percentage discount. Consumer
Commenters expressed concern over the possibility--and regulatory conflict--that
customers may receive a discount that would be less than 10%, and supported
capping the eligible rates at the provider of last resort (POLR) rates or
price to beat, and also at the fact that the customer's ability to return
to the affiliated REP and the price to beat is still undecided in two other
projects. Consumer Commenters urged that this ability be clarified, otherwise
some customers may be unable to receive the minimum 10% discount. Consumer
Commenters proposed that the amount of discount be identified on the bill.
Consumer Commenters supported the customer enrollment part of the rules with
only minor technical changes.
The commission agrees with the Consumer Commenters that if the current
proposal to establish the price to beat is adopted, the originally proposed
discount calculation would have to be changed. The commission also finds that
the considerations that underlie the original proposal are still valid and
must be taken into account when amending the discount calculation. Consequently,
the commission makes the change in the discount calculation that will preserve
the idea of a single price to beat by calculating "a baseline" price to beat
for each service territory, by amending §25.454(d)(3)(B), and then applying
a percentage discount to that price to determine the specific amount of discount
per kWh. In addition, the commission notes that the discount, as defined in
PURA §39.903(h) should be at least 10% off the lower of the POLR rate
or price to beat. The discount calculation is set up to maintain this provision.
Also, under the most current proposal for the customer protection rules, a
customer would be able to return to the affiliated REP under the original
terms of service.
In its reply, AEP Energy Services disagreed with the Consumer Commenters
that the rates other than POLR or price to beat are eligible for the discount.
Pursuant to PURA §39.903(h), the discount should be off POLR or price
to beat rate, whichever is lower. AEP Energy Services also disagreed with
the Consumer Commenters suggestion that the amount of discount be identified
on each bill; while some designation of the discount is acceptable, Consumer
Commenters calculation is too complicated.
The commission agrees with the AEP Energy that the discount must be linked
to either the POLR rate or price to beat, whichever is lower. The commission
also agrees with the Consumer Commenters that the discount needs to be identified
on the customers' bills, and adds the corresponding language to §25.454(d).
Consumer Commenters in their replies expressed support for the low-income
discount administrator (LIDA), including collection of telephone numbers that
can later improve access to telephone lifeline programs. They also reiterated
all of their initial comments regarding the definition of the rate that can
be reduced; a concern that some customers may receive a discount lower than
10%; and a concern that the current proposals for the price to beat and the
discount calculation may be in conflict and lead to contentious proceedings
when determining the discount. Consumer Commenters stated that many states
provide a straight percentage-off discount and that this would be appropriate
in Texas, applied equally across the state, because it is meaningful and simple.
The rate discount should not be complicated, but rather a fixed percentage
off the customer's bill, shown on the bill, and not be offered off predatory
rates.
The commission notes that the discount calculation was crafted as a best
acceptable compromise, taking into account concerns of many parties, while
at the same time following the directive of PURA to base the discount off
the lower of the POLR rate or price to beat. While Consumer Commenters may
be correct to say that many states offer a simple discount, the commission
must follow the Texas statute when determining the discount. The current proposal
also closely follows one of the Consumer Commenters' expressed concerns to
allow low-income customers to benefit from competition by having access to
a variety of rate offerings. The commission, therefore, declines Consumer
Commenters' proposed change.
With regard to §25.454(b), AEP Energy Services and TNMP-Retail both
noted that some REPs may choose not to serve residential customers and recommended
that the phrase "except for REPs certified under PURA §39.352(d)" should
be inserted after "REPs." AEP-ED stated that the rate reduction program does
not apply to electric utilities as defined in PURA §31.002(6) and the
subsection should be revised accordingly.
The commission agrees with the addition proposed by AEP Energy Services
and has made the corresponding change. Additionally, the commission agrees
with AEP-ED's comment regarding applicability to electric utilities as defined
in §31.002(6) and has deleted the reference.
With regard to §25.454(c)(9), previously §25.454(c)(8), AEP Energy
Services stated that as the rulemaking for the Price to Beat is still pending,
it is unclear at this time whether each utility will have only one or multiple
price to beat rates for residential customers.
The commission agrees with AEP Energy Services' position and notes that
the rule offers sufficient flexibility to accommodate different rate structures.
With regard to §25.454(d)(2), EGSI-D supported developing guidelines
by the commission for determining the amount of rate discount. The guidelines
should take into account the relative energy burdens of low-income customers.
The commission finds that the rules as proposed establish sufficient guidelines
for determining the rate discount. As stated earlier, since the main reason
for establishing the rate discount program is to alleviate the potential burden
of higher electric rates on low-income customers, the commission finds that
no additional guidelines are necessary.
With regard to proposed §25.454(d)(3), AEP Energy Services recommended
that the commission publish the prevailing price to beat and the POLR rates
for each area on its WEB site so that the REPs can calculate the discount.
Reliant proposed to amend subsection (d)(3)(B) to include establishment of
a baseline rate (lower of the price to beat or the POLR for 1000 kWh), which
would then be multiplied by the discount percentage and divided by 1000. In
addition, Reliant suggested rewriting subsection (d)(3)(D) to state that the
REPs were not required to provide low-income discount if they could not be
reimbursed from the SBF.
In its reply, AEP Energy Services agreed with the comments made by Reliant
that the discount amount be revised to associate assumed kWh with the baseline
rate, otherwise it will be impossible for a REP to know the exact amount of
the discount to be applied to either the POLR or price to beat rate.
The commission finds that publishing the prevailing price to beat or the
POLR rates for each area on the commission Web site will not be necessary
because the discount amount will be calculated at the time the fee is set.
The REPs will not have to calculate the discount amount themselves. The commission
may decide in the future to publish the amount of discount on its Web site
for each service area. The commission agrees with the Reliant's suggestion
to calculate a baseline rate for 1000 kWh and the revised discount calculation
in the amended §25.454(d)(3)(B) follows Reliant's suggestion. The commission
does not agree with the Reliant's suggestion to rewrite proposed subsection
(d)(3)(D) regarding reimbursement, but finds that adequate safeguards exist
to assure that the fund will have sufficient revenues fully to reimburse the
REPs, and eventually, the MOUs and Coops, for the discount provided.
With regard to proposed §25.454(d)(4), Reliant proposed to amend the
subsection to state: "Each eligible low-income customer shall be entitled
to receive from any REP in the customer's area a discount equal to the discount
amount times the number of kWh of electricity that the customer has consumed."
The commission agrees with the Reliant's suggestion and has made the corresponding
change.
With regard to §25.454(e)(2), TXU expressed concern that the self-certification
process for enrollment in the low-income discount program lacks a verification
requirement. TXU proposed adding language that would make it one of LIDA's
responsibilities to verify income of self-certifying customers.
In its reply, TXU stated that tax returns, pay stubs, or letters from employers
could be used to verify income eligibility of self-certifying customers.
The commission agrees in principle with TXU's comment and has made the
corresponding change in the new §25.454(e)(2)(G), which will give the
LIDA an option to require income verification using tax returns, pay stubs,
or letters from employers.
With regard to §25.454(f)(2)(C), Consumer Commenters stated that ERCOT
will not be able to provide the move-in/move-out information; therefore, Texas
Department of Human Services (TDHS) should be responsible for reporting client
address changes and those who self-certify should send address changes to
LIDA.
The commission notes that ERCOT has indicated it may have at least some
address change information, therefore, the commission will not delete this
requirement. However, to the extent that TDHS will have this information,
too, the commission adds the same requirement for TDHS to provide address
changes to LIDA. The commission also notes that TDHS' ability to provide this
information depends on the clients' supplying such changes to the department.
With regard to §25.454(f)(3)(H) and §25.454(f)(4)(C), AEP Energy
Services and TNMP-Retail pointed out that these subsections contain identical
language on customer notification and that the REPs' only responsibility in
this area is notification when the rate changes, using commission-approved
standard language. AEP Energy Services, TXU, and TNMP-Retail pointed out that
the low-income discount administrator should have the responsibility to notify
the customers about the discount's expiration. AEP Energy Services recommended
either creating a new subsection, Terms of Customer Enrollment, or amending
language in LIDA and REP sections, to describe outreach responsibilities.
TXU recommended adding the above notification requirements for LIDA to §25.454(f)(3).
Consumer Commenters recommended that this subsection be changed to require
LIDA to maintain address changes reported by self-certified customers.
The commission agrees that the language regarding customer notification
for LIDA and the REPs is similar; however, the reasons and outcome should
be different. The proposed language is broad enough to allow both the LIDA
and REPs to develop procedures best suited to their goals. The commission,
therefore, declines to add a new subsection on outreach responsibilities;
in addition, such responsibilities for LIDA will be worked out in the actual
contract. The commission agrees with the Consumer Commenters recommendation
to have LIDA keep the address changes for the self-certified customers and
modifies subparagraph (G) accordingly.
With regard to §25.454(f)(4)(D), AEP Energy Services objected to the
requirement that the REPs notify customers twice a year about the availability
of the discount program. TXU objected to the education requirement by REPs
and asked that it be deleted.
In their reply, Consumer Commenters stated that outreach is important to
make the program work and that the companies' complaints about outreach are
baseless; on the contrary, outreach is mandatory and the requirement in the
rules should be expanded. Consumer Commenters also stated that LIDA cannot
be responsible for all outreach activities because of added costs; however,
requiring REPs to provide bill inserts should not be too costly. Consumer
Commenters supported the reporting requirements, and disagreed with the REPs
that those would be burdensome. The information is crucial as a cross-reference
and a measure of the program's success.
The commission notes AEP Energy Services' and TXU's objection to the twice-annual
notification requirement; however, the commission disagrees that this is a
burdensome requirement. The commission agrees with the Consumer Commenters
that bill notifications should not be too costly and that this minimal requirement
is needed to make eligible customers aware of the program.
With regard to §25.457(a), San Antonio proposed to add language to
the subsection that would further clarify the entire section applies to those
municipally owned utilities and electric cooperatives that have adopted customer
choice for service provided by them in their service territories.
The commission agrees with San Antonio and makes the proposed change as
indicated in §25.457(b).
With regard to §25.457(b), TEC suggested changing plural MOUs and
Coops to singular and adding "in its certificated service area" at the end
of the sentence.
The commission agrees with TEC and makes the corresponding change.
With regard to §25.457(g), Consumer Commenters noted that the language
in this subsection describing qualifying programs is insufficient and should
be changed to include only those programs that accomplish the same or better
results than the programs under the SBF. Less effective or higher cost programs
should not be credited.
The commission does not disagree with the Consumer Commenters regarding
the type of programs to be included. The commission finds that the rule as
proposed contains sufficient guidelines on this matter, and declines to add
further restrictions, particularly, since there is no basis for such restrictions
in the statute.
With regard to §25.457(j), San Antonio recommended that the language
on reimbursement in this subsection should be modified to state that the MOUs
and Coops "shall be reimbursed," based on the language in PURA §39.903(i).
San Antonio also suggested that "proportional," as the word relates to the
distributions from the fund, including the establishment of the proportional
amount in §25.457(j)(1)-(3), be deleted because the discount program
is to be fully funded by the SBF fee allocated to the MOUs and Coops by the
commission.
The commission finds that the language in this and other subsections regarding
reimbursement for the rate discount makes it clear that once requested, reimbursement
to the MOUs and Coops, and REPs will be provided. Therefore, the commission
declines to make the requested change. The commission disagrees with San Antonio's
interpretation of PURA §39.903(c) and (h), and declines to delete the
specified subsection.
All comments, including any not specifically referenced herein, were fully
considered by the commission. In adopting this section, the commission makes
other minor modifications for the purpose of clarifying its intent.
These sections are adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998) (PURA) which
provides the commission with the authority to make and enforce rules reasonably
required in the exercise of its powers and jurisdiction, and specifically,
PURA §39.903(h), which requires that the commission adopt rules on determining
a reduced rate for the low income discount program, and PURA §39.903(j),
which requires that the commission adopt rules on enrollment options for eligible
customers to participate in the low income discount program, and which requires
the commission to provide for an automatic enrollment option.
Cross Reference to Statutes: Public Utility Regulatory Act §§14.002,
39.901, 39.903, and 39.905.
§25.451.Administration of the System Benefit Account.
(a)
Purpose. The purpose of this section is to implement the
system benefit account, including its administration, establishment of a revenue
requirement, fee collection procedures, and review and approval of accounts
pursuant to the Public Utility Regulatory Act (PURA) §39.901 and §39.903.
(b)
Application. Except as provided in PURA §39.102(c),
this subchapter applies to electric utilities, retail electric providers,
retail electric providers pursuant to PURA §39.352(g), and transmission
and distribution utilities. This section applies to municipally owned electric
utilities and electric cooperatives no sooner than six months preceding the
date on which a municipally owned electric utility or an electric cooperative
implements customer choice in its certificated service area.
(c)
Definitions. The following words and terms when used in
this subchapter, shall have the following meaning, unless the context clearly
indicates otherwise.
(1)
Electric cooperative (Coop)--As defined in §25.5 of
this title (relating to Definitions).
(2)
Electric utility--As defined in PURA §31.002(6).
(3)
Fiscal year--The State of Texas fiscal year, starting on
September 1 of a calendar year, and ending on August 31 of the next year.
(4)
Low-income customer--For the purposes of rate reduction
program, as defined in §25.454(c) of this title (relating to the Rate
Reduction Program). For the purposes of targeted weatherization programs,
as defined in §25.453(f) of this title (relating to Targeted Energy Efficiency
Programs).
(5)
Retail customer--As defined in PURA §31.002(16).
(6)
Retail electric provider (REP)--As defined by PURA §31.002(17).
(7)
System benefit account--An account with the Texas Comptroller
of Public Accounts (Comptroller) to be administered by the commission.
(8)
System benefit fee--A nonbypassable fee set by the commission
to finance the system benefit account. The fee shall be charged to electric
retail customers based on the amount of kilowatt hours (kWh) of electric energy
used, as measured at the meter and adjusted for voltage level losses.
(9)
Transmission and distribution utility (TDU)--As defined
in PURA §31.002(19).
(d)
System benefit fee.
(1)
The commission shall set the amount of the system benefit
fee for the next fiscal year at or before the last open meeting scheduled
for July of each year.
(2)
The amount of the fee will be based on the total revenue
requirement as determined in subsection (e) of this section and the projected
retail sales of electricity in megawatt hours (MWh) in the state as determined
in subsection (f) of this section.
(3)
The commission may, at any time during the fiscal year,
review the revenue requirement, projected retail sales of electricity, or
the system benefit account payments and balance, and revise the system benefit
fee for the remainder of the year to accomplish the purposes of PURA §39.901
and §39.903. The commission may issue an order revising the fee amount.
The TDUs shall implement the new fee in billings to the REPs within 30 calendar
days of the date such order is issued. Whenever the fee is changed, or at
least once annually, the TDUs will file with the commission an updated tariff
sheet, reflecting the new fee.
(4)
The fee may not exceed $0.50 per MWh, except beginning
in January 1, 2002, and until December 31, 2006, it may be set in an amount
not to exceed $0.65 per MWh if necessary to fund at least a 10% reduction
in rates for qualifying low-income customers.
(e)
Revenue requirement. The revenue requirement used by the
commission to set the system benefit fee for each fiscal year shall be established
as provided by this subsection.
(1)
The total revenue requirement used to set the amount of
the system benefit fee will be the total of the revenue requirements determined
under paragraphs (2)-(5) of this subsection, including the shortfall, if any,
in funding for the Texas Education Agency (TEA) from the previous year.
(2)
TEA shall provide by June 1 of each year its estimate of
the amount required to fund school funding losses as determined under PURA §39.901(b)
and (c) for the next fiscal year. If TEA does not provide its estimate by
this date, the commission may use the amount determined by TEA under PURA §39.901(b)
and (c) for the current fiscal year in setting the amount of the fee for the
following fiscal year.
(3)
The revenue requirement needed to effect the rate reduction
for low-income customers and the targeted energy efficiency programs shall
be determined as follows:
(A)
The revenue requirement for reduced rates as provided by
PURA §39.903(h)-(l) shall be based on the average annual consumption
of electric energy by low-income customers and the number of such customers
enrolled in a rate reduction program as of June 1 of each year, or the number
of eligible participants as listed in the Texas Department of Human Services'
client database, plus a projection for new enrollees, to account for growth
in enrollment, based on the latest available census data and as determined
by the commission. The average annual expenditure by a low-income customer
for electric energy shall be derived from the latest available data. The commission
may use information provided by the REPs for the purposes of estimating rate
discount revenue requirement.
(B)
The revenue requirement for targeted energy efficiency
programs, including a low-income energy efficiency plan, to be administered
by the Texas Department of Housing and Community Affairs (TDHCA) shall be
provided to the commission by June 1 of each year. If TDHCA does not provide
an estimate by that date, the commission may use the estimate from the previous
fiscal year, the actual amount spent on the programs in the prior fiscal year,
or any other amount the commission determines to be reasonable.
(4)
The commission shall include in the calculation of revenue
requirement any additional amounts authorized by the legislature, including
appropriations to the Public Utility Commission for customer education programs
and any other authorized purpose, and for the Office of Public Utility Counsel.
(5)
The commission shall include in the calculation of the
revenue requirement the operating costs for the low-income discount administrator.
(f)
Electric sales estimate. The TDUs, and when applicable,
the municipallly owned utilities (MOUs) and Coops, upon request by the commission,
shall supply an aggregate number of the amount of retail electric sales in
their service areas for the preceding calendar year, by April 1 of each year.
Upon receipt of such information, the commission will file the aggregated
retail electric sales in the relevant areas, after adjusting for projected
growth. The commission shall determine the most reasonable estimate when it
sets the system benefit fee.
(g)
Remittance of fees after January 1, 2002.
(1)
Beginning in January 2002, each TDU, MOU, or Coop, collecting
the system benefit fee from the REP, MOUs or Coops, in its service area, shall
remit the fees to the Comptroller on the 20th day of each month.
(2)
Remittance of funds to the Comptroller shall comply with
the Comptroller's rules governing any such deposits. Any amounts over $250,000
shall be transferred electronically.
(3)
Deposits due to the system benefit account pursuant to
PURA §39.352(g) shall be transferred to the Comptroller at the time of
the filing of the annual report pursuant to §25.107 of this title (relating
to Certification of Retail Electric Providers(REPs)).
(4)
The collecting utility shall account for all system benefit
fees received from the REPs, and MOUs or Coops, in its service area separately
from any other account in its records.
(h)
Billing requirements.
(1)
A TDU, an MOU, or a Coop shall send billing statements
to the REPs indicating the amount of system benefit fee owed for the specified
period. The billing and payments between the TDU and the REPs shall be governed
by §25.214 of this title (relating to Terms and Conditions of Retail
Distribution Service Provided by Investor Owned Transmission and Distribution
Utilities), and between MOUs and Coops and the REPs by §25.215 of this
title (relating to Terms and Conditions of Retail Distribution Service Provided
by MOUs and Coops).
(2)
The REP shall remit to the TDU, an MOU, or a Coop, an amount
equal to the kWh of electric energy consumed by its customers in the utility's
service area times the fee approved by the commission for that period.
(3)
For those retail customers who switch to on-site generation
pursuant to PURA §39.262(k), the system benefit fee shall be based on
the amount of actual power delivered to them by a TDU. The TDU will calculate
and bill any such fee, and will forward the payment, once received, to the
Comptroller on the next fee payment due date. The TDUs will separately identify
these sales when submitting the aggregate number of electric retail sales.
(i)
Reporting and auditing requirements.
(1)
Each retail electric provider offering rate reduction discounts
to eligible customers shall keep records of such discounts to enable an audit
by the commission or its agent, for at least three years from the date the
discount is first given to the customer. Reports filed under subsection (j)
of this section will also be used for auditing purposes.
(2)
Each TDU, MOU, or Coop collecting and forwarding the system
benefit fee to the Comptroller shall file with the commission at the time
the money is sent a report, on a commission-prescribed form, stating for each
service territory the amount of the system benefit fee billed, the amount
forwarded to the Comptroller, and the number of MWh of electric energy sold.
The report shall contain monthly amounts and year-to-date totals.
(j)
Reimbursement for the rate reduction discount. Each REP,
or MOU or Coop, when applicable, shall submit to the commission a monthly
activity report on a form prescribed by the commission listing information
in paragraphs (1)-(5) of this subsection. The commission shall, within five
business days of receipt of the monthly report, prepare and deliver to the
comptroller an authorization for reimbursement to the REP, MOU, or Coop in
a form prescribed by the commission. The prescribed form shall include, but
not be limited to, instructions for direct deposit of the reimbursement into
the bank account of the REP, MOU, or Coop. The Comptroller shall transfer
the funds by the close of the next business day, following receipt of an authorization
from the commission. The monthly activity report submitted by the REPs, MOUs,
or Coops shall be due on the 20th day following the reporting month and contain
the following:
(1)
The number of low-income customers enrolled in the rate
reduction program;
(2)
The amount of reimbursement requested and received from
the fund for the month;
(3)
The aggregate electric energy consumption in kWh for all
low-income customers enrolled in the program for the previous month;
(4)
The total amount of rate discounts provided to the low-income
customers in the previous month; and
(5)
The amount of the system benefit fee billed by and remitted
to the TDU.
(k)
Transfer of funds to other state agencies. Payment transfers
to other state agencies pursuant to this rule shall be governed by interagency
agreements.
(l)
Establishment of fee and collection of funds prior to January
1, 2002. Prior to the beginning of customer choice on January 1, 2002, the
commission shall determine the level of the system benefit fee based upon
the expenses authorized for payment out of the system benefit account or as
needed for purposes of PURA.
(1)
An estimate of projected retail sales of electricity for
the period shall be filed by the commission staff prior to the issuance of
a commission order.
(2)
The commission shall issue an order setting the amount
of the system benefit fee, assessing that amount against each electric utility
in proportion to its retail electric sales out of the total retail sales in
the state, and directing the utilities on the method and timing of payment.
§25.453.Targeted Energy Efficiency Programs.
(a)
Purpose. The purpose of this section is to implement the
targeted energy efficiency programs for eligible low-income customers, including
administration, program design, and program evaluation. All programs carried
out under this section must reduce energy consumption and costs for customers.
(b)
Application. This section applies to all electric utilities'
service areas in the state, except service areas of municipally owned utilities
or electric cooperatives that have not opted in to competition and the service
area of a utility referred to in the Public Utility Regulatory Act (PURA) §39.102(c).
(c)
Definitions. The following words and terms, when used in
this subchapter, shall have the following meanings, unless the context clearly
indicates otherwise:
(1)
Deemed savings--A pre-determined, validated estimate of
energy and peak demand savings attributable to an energy efficiency measure
in a particular type of application, which a utility may use instead of energy
and peak demand savings, determined through measurement and verification process.
(2)
Demand--The rate at which electric energy is delivered
to or by a system at a given instant, or averaged over a designated period,
usually expressed in kilowatts (kW) or megawatts (MW).
(3)
Energy efficiency program (program)--Programs that are
aimed at reducing the rate at which electric energy is used by appliances,
equipment and processes. Reduction in the rate of energy used may be obtained
by substituting technically more advanced equipment to produce the same level
of end-use services with less electricity; adopting technologies and processes
that reduce heat or other energy losses; or reorganizing of processes to make
use of waste heat.
(4)
Energy efficiency measures--Equipment, materials, and practices
which, when installed and used at a customer site, result in a measurable
and verifiable reduction in purchased electric energy consumption, measured
in kilowatt-hours (kWh), or peak demand, measured in kilowatts (kW), or both.
(5)
Energy efficiency service provider--A person who installs
energy efficiency measures or performs other energy efficiency services. For
the purposes of this section, entities currently under contract with the Texas
Department of Housing and Community Affairs (TDHCA) to provide Weatherization
Assistance for Low-Income Persons (WAFLIP) services are energy efficiency
services providers.
(6)
Energy savings--A quantifiable reduction in a customer's
consumption of energy.
(7)
Inspection--On-site examination of a program to verify
that a measure has been installed and is capable of performing its intended
function and is in compliance with TDHCA health and safety standards.
(8)
Measurement and verification (M&V)--Activities intended
to determine the actual kWh and kW savings resulting from energy efficiency
programs.
(d)
Energy efficiency goal requirement under PURA §39.905.
Electric utilities may count savings achieved under this program towards the
requirements of §25.181 of this title (relating to the Energy Efficiency
Goal).
(e)
Compliance with state and federal law. Programs offered
under the system benefit account shall maintain TDHCA's current service delivery
structure and quality standards unless alternative programs are necessary
to meet performance requirements under this section. The energy efficiency
program under the system benefit account may fund the equivalent of 25% of
the state's U.S. DOE WAFLIP allocation to programs structured to comply with
the cost-sharing requirements under the federal fiscal year 2000 Interior
and Related Agencies Omnibus Appropriations Bill. TDHCA shall notify the commission
of changes in other state and federal law that affect the system benefit account
programs and amend its low-income energy efficiency plan as appropriate.
(f)
Eligibility criteria. A beneficiary of the targeted energy
efficiency programs must be a low-income electric customer of a retail electric
provider, or a municipally owned utility or an electric cooperative that offers
customer choice. For the purpose of this section, a "low-income electric customer"
is an electric customer:
(1)
whose household income is not more than 125% of the federal
poverty guidelines; or
(2)
who receive food stamps from the Texas Department of Human
Services or medical assistance from a state agency administering a part of
the medical assistance program.
(g)
Program transition. Existing programs to fund low-income
weatherization services under contracts between individual utilities and TDHCA
shall continue until utilities enter the competitive market. An electric utility
currently under contract with TDHCA and entering the competitive market shall
enter into a successor in interest agreement with TDHCA by no later than June
1, 2001, to transfer program materials, funding, and responsibilities to TDHCA.
(h)
Low-income energy efficiency plan.
(1)
Schedule. TDHCA shall:
(A)
By June 1, 2001, file a low-income energy efficiency plan
for the years January 1, 2002 and beyond in accordance with paragraph (2)
of this subsection.
(B)
By June 1, 2003, and annually thereafter, file its updated
low-income energy efficiency plan in accordance with paragraph (2) of this
subsection.
(C)
No later than April 1, 2002, and quarterly thereafter,
file quarterly reports in accordance with subsection (i) of this section.
(D)
No later than April 1, 2003, and annually thereafter, file
final reports in accordance with subsection (j) of this section.
(2)
Low-income energy efficiency plan. The TDHCA low-income
energy efficiency plan shall describe how TDHCA intends to achieve the legislative
mandate under PURA §39.903(e) and the requirements of this section. Beginning
in January 1, 2002, the plan shall be on a calendar year cycle and may cover
a multiple-year period. The plan shall propose an annual budget in accordance
with subparagraph (E) of this paragraph. TDHCA's energy efficiency plan shall
include:
(A)
A summary description of every program being implemented
through the system benefit account, including programs fully funded, programs
funded in part, programs funded statewide and programs funded regionally,
including pilot projects. Each program summary shall include a description
of:
(i)
The manner in which the program reduces energy consumption.
(ii)
The manner in which energy and demand savings are measured.
(iii)
The anticipated number of households assisted.
(iv)
The projected eligible population.
(v)
The anticipated amount of kW and kWh savings expected to
be created in each electric utility service area.
(B)
A description of the monitoring responsibilities and reporting
requirements of the contractor, TDHCA, and any other parties conducting reviews,
audits, inspections, and oversight.
(C)
The proposed annual budget required to implement the TDHCA
energy efficiency plan. The proposed budget should detail funding allocations
to energy efficiency services providers, TDHCA's administrative costs, including
monitoring, training, and technical assistance and outreach, and the rationale
and methodology used to estimate the proposed expenditures. If the proposed
budget is more than 10% higher than the previous year's budget or expenditure
level, the plan should include a detailed explanation for the need for additional
funding and, if necessary, an implementation plan for an expanded program.
In the budget:
(i)
The total cost of administration may not exceed 10%.
(ii)
Funding allocations to energy efficiency service providers
must reflect the proportional size of the eligible customer base for all applicable
areas in the state.
(D)
A discussion of the solicitation process TDHCA plans to
use to select energy efficiency service providers, including the manner in
which TDHCA will post notice of requests for proposals, minimum contractor
qualifications, and any other facts that may be considered when evaluating
a program. Except for pilot projects and existing contractors under the Texas
WAFLIP, competitive solicitation shall be the method for contract selection.
(E)
A discussion of the public participation process TDHCA
used in the development of programs to be funded through the system benefit
account, including a summary of comments submitted by parties during the process.
(F)
A description of the customer protection provisions in
the contract appropriate to the program design and implementation structure.
The description should include a statement how the process allows:
(i)
The energy efficiency service provider to file a complaint
against a TDHCA.
(ii)
A customer to file a complaint against an energy efficiency
service provider. TDHCA may use customer complaints as a criterion for disqualifying
energy efficiency service providers from participating in the program.
(iii)
Complaints unresolved within 60 calendar days shall be
reported to the commission.
(3)
Minimum program requirements. Programs shall encourage
a comprehensive approach to energy efficiency either by installing multiple
measures or through the coordination with other programs. Programs must describe
the manner in which they are coordinated with the existing Texas WAFLIP.
(A)
Each program must be cost-effective. An energy efficiency
program is deemed to be cost-effective if the cost of the measure installed
is less than or equal to the benefits of the measure. The benefit of the measure
is the value of the purchased electrical energy saved to the customer, based
on 1/1000th of the cost for the first 1000 kWh block at the price to beat
for the standard residential rate, seasonally adjusted, as calculated pursuant
to §25.454(d)(3)(B) of this title (relating to Rate Reduction Program),
in the applicable service area. For programs designed outside the WAFLIP structure,
the present value of the measure benefits shall be calculated over the projected
life of the measure, not to exceed ten years.
(B)
Each program must identify the goal it is intended to achieve
and the goal for the calendar year.
(C)
Each program must identify a timeline and milestones, including
a quarterly production and expenditure schedule.
(D)
Programs shall result in consistent and predictable energy
savings over a seven-year period.
(E)
Programs shall disclose known potential adverse environmental
or health effects associated with the energy efficiency measures to be installed.
(F)
Programs shall include the procedures for measuring and
reporting the energy and peak demand savings from installed energy efficiency
measures consistent with the requirements of paragraph (5) of this subsection.
(G)
Pilot projects to test new concepts and technologies may
be implemented in limited geographic areas prior to making the program available
in all appropriate areas of the state.
(H)
Programs or projects not eligible for compensation are
those that:
(i)
Do not reduce the customer's total energy consumption and
energy costs.
(ii)
Would achieve demand reduction by eliminating an existing
function, shutting down a facility or operation, or would result in building
vacancies.
(iii)
Result in negative environmental or health effects, including
effects that result from improper disposal of equipment and materials.
(4)
Commission review. Prior to the implementation of the energy
efficiency program, the commission shall review the energy efficiency plan.
The commission may consider, in addition to the requested budget, the amount
of system benefit funds available and the percentage increase in program funding
requested from the previous year. Deemed savings shall be reviewed in accordance
with the guidelines of §25.181 of this title.
(5)
Monitoring, inspection, and measurement. Each program shall
be subject to monitoring of operation and management of contracts, as well
as measurement of savings.
(A)
TDHCA is responsible for the monitoring of contract operation
and management. Findings of fraud shall be reported to the commission immediately.
(B)
TDHCA is responsible for the measurement of energy and
peak demand savings, using a commission-approved measurement and verification
protocol. Commission-approved deemed energy and peak demand savings may substitute
for a measurement and verification protocol.
(C)
Each customer shall sign a certification indicating that
the measures contracted for were installed before final payment is made to
the energy efficiency service provider.
(D)
At least a statistically significant sample of installations
will be subject to on-site inspection by TDHCA in accordance with the protocol
set out for the program. Failure to meet health and safety, and installation
standards may be cause for contract termination.
(i)
Quarterly energy efficiency report. The quarterly energy
efficiency report shall provide the information listed below:
(1)
The most current information available comparing the baseline
and milestones achieved under the program, including the number of households
served under each program.
(2)
A statement of funds expended by energy efficiency service
providers and TDHCA program administration during the quarter.
(3)
A statement of any funds that were committed but not spent
during the quarter.
(j)
Annual energy efficiency report. The annual energy efficiency
report shall provide the information listed below:
(1)
The most current information available comparing projected
savings to reported savings, including the amount of kW and kWh savings achieved
in each electric utility service area.
(2)
The most current information available comparing the baseline
and milestones achieved under the program.
(3)
A statement of funds expended by the energy efficiency
service providers and TDHCA program administration.
(4)
A statement of any funds that were committed but not spent
during the year, by program.
(5)
A statement regarding the number of households served by
each program.
(6)
A summary of the previous year's operation and management
monitoring and installation inspection findings.
(k)
Legislative report. The commission shall compile the information
submitted by TDHCA in its quarterly and annual reports and any other relevant
information bi-annually. The report shall be submitted to the joint legislative
oversight committee on electric restructuring.
§25.454.Rate Reduction Program.
(a)
Purpose. The purpose of this section is to define the low-income
electric rate reduction program, establish the discount rate calculation,
and specify enrollment options and processes.
(b)
Application. Except as provided in the Public Utility Regulatory
Act (PURA) §39.102(c) and retail electric providers (REPs) certified
under PURA §39.352(d), this section applies to REPs, to providers of
last resort (POLR) as defined in PURA §39.106, and to municipally owned
electric utilities and electric cooperatives no sooner than six months preceding
the date on which a municipally owned utility or an electric cooperative implements
customer choice in its certificated area.
(c)
Definitions. The following words and terms when used in
this subchapter, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Discount amount--The amount of discount an eligible low-income
customer is entitled to receive from any REP in the customer's area, expressed
as cents per kilowatt-hour (kWh).
(2)
Discount percentage--The percentage of discount established
by the commission annually, or as needed, and applied to the lower of the
price to beat or POLR rate in a particular service territory.
(3)
Discount rate--A rate charged by a REP or POLR that includes
the commission-established discount.
(4)
Electric Reliability Council of Texas (ERCOT)--a non-profit
Texas corporation that represents an area of Texas served by electric utilities,
municipally owned utilities, and electric cooperatives, and which is not synchronously
inter-connected with electric utilities outside the state of Texas.
(5)
Electric service identifier (ESI ID)--The basic identifier
assigned to each point of delivery used in the registration system and settlement
system managed by ERCOT or another independent organization.
(6)
Low-income customer--An electric customer, whose household
income is not more than 125% of the federal poverty guidelines, or who receives
food stamps from the Texas Department of Human Services (TDHS) or medical
assistance from a state agency administering a part of the medical assistance
program.
(7)
Low-Income Discount Administrator (LIDA)--A third-party
administrator contracted by the commission to administer the rate reduction
program.
(8)
Provider of last resort (POLR) rate--The rate for the standard
retail service package offered by the provider of last resort in the area
under §25.43 of this title (relating to the Provider of Last Resort).
(9)
Price to beat (PTB)--A price for electricity, as determined
pursuant to PURA §39.202, charged by an affiliated REP to customers in
its service area.
(10)
Rate reduction program--A program to provide reduced electric
rates for eligible low-income customers, in accordance with PURA §39.903(h).
(11)
Registration agent--Entity designated by the commission
to administer registration and settlement, premise data, and other processes
concerning a customer's choice of retail electric provider in the competitive
electric market in Texas.
(d)
Rate reduction program. All eligible low-income customers
shall be entitled to receive a discount rate, as determined by the commission
pursuant to this section, on their electric bills from their retail electric
providers. The discount will be identified on each eligible customer's bill
and applied only to the electric service portion of the bill.
(1)
Eligibility criteria. A low-income customer, as defined
in subsection (c) of this section, is entitled to receive a discount rate.
(2)
Discount percentage. The commission shall establish a discount
percentage each year at the time the commission sets the system benefit fee.
The discount percentage:
(A)
Shall not be less than 10% and may, if there are funds
sufficient to support a higher level, be set as high as 20%.
(B)
May be recalculated during the year as necessary.
(3)
Discount amount. A REP shall provide to each eligible low-income
customer a rate discounted by an amount as established by this subsection
for the area in which the customer is located.
(A)
The commission shall calculate and establish the low-income
discount amount for distinct geographical areas, which shall correspond to
the certified electric utility service areas, or smaller areas designated
by the commission as POLR service areas.
(B)
The discount amount shall be calculated by taking the lower
of the POLR rate and the PTB to establish the baseline rate. If there are
multiple price to beat rates available to a residential customer, the commission
will calculate the baseline rate by using the standard residential rate, seasonally
adjusted; multiply it by the cost of the first 1000kWh of usage; and then
divide it by 1000 to obtain a cents per kWh cost. The discount amount shall
be calculated by multiplying the cents per kWh cost of the baseline rate by
the discount percentage.
(C)
If the commission changes the discount amount, by either
changing the discount percentage or establishing a new baseline rate for any
area, then REPs must implement the resulting change in the discount amount
in their billings to customers within 30 calendar days of the date the commission
issues its order.
(D)
REPs are entitled to reimbursement under §25.451(j)
of this title (relating to Administration of the System Benefit Account) for
amounts equal to the documented discount amounts they have provided to eligible
low-income customers.
(4)
Each eligible low-income customer shall be entitled to
receive from any REP in the customer's area a discount rate equal to the discount
amount times the number of kWh of electricity, which the customer has consumed
during a billing cycle. The discount rate shall be the rate the customer would
otherwise be charged by that REP minus the discount amount.
(e)
Terms of customer enrollment. Eligible customers will be
enrolled in the low-income discount rate program through automatic enrollment
or a self-certification process implemented by LIDA.
(1)
Automatic enrollment. Automatic enrollment is an electronic
process of identifying customers eligible for the low-income discount rate
by matching data from agencies that operate programs serving eligible clients
with electric utility data maintained by the ERCOT's registration agent. The
transfer of data for the purposes of establishing and maintaining the automatic
enrollment process shall occur between TDHS, ERCOT, and the LIDA. To accomplish
the purposes of this subsection, the commission shall:
(A)
Contract with a person to perform the LIDA function. This
person shall perform all necessary tasks to establish and maintain the automatic
enrollment system, or any other related task, as specified in the contract.
(B)
Enter into a memorandum of understanding with TDHS to establish
the respective duties of the two agencies.
(C)
Develop a protocol to define the automatic enrollment process
and the respective duties of the participating entities sharing data.
(2)
Self-certification. Self-certification is a form of alternate
enrollment available to those eligible electric customers who do not receive
benefits from TDHS, but whose combined household income does not exceed 125%
of federal poverty guidelines. Self-certification enrollment process shall
be administered by LIDA. LIDA's responsibilities shall include:
(A)
Processing the self-certification applications, which shall
be filed on a form developed by the commission.
(B)
Adding qualified applicants to the list of eligible electric
service identifiers (ESI IDs).
(C)
Processing and maintaining a list of applicants' address
changes.
(D)
Forwarding to the REPs the list of ESI IDs, with monthly
updates.
(E)
Maintaining a toll-free number for inquiries. This number
shall be displayed on the self-certification application.
(F)
Conducting outreach and distributing self-certification
applications.
(G)
LIDA may, at its discretion, verify the self-certification
applicants' income by requesting copies of tax returns, pay stubs, or letters
from employers.
(3)
Period of customer enrollment: Once enrolled, the eligible
customer shall receive the discount rate for 13 months from the date of enrollment.
(A)
The continued eligibility status of the customer shall
be reviewed during the twelfth month after the date of initial enrollment,
and every 12 months thereafter.
(B)
Customer who continues to receive TDHS benefits as defined
in subsection (c) of this section, will have eligibility for the discount
rate renewed for a new 13-month period.
(f)
Protocol. The purpose of the protocol is to define responsibilities
of the participating entities. Other technical information may be added to
the request for proposal for the LIDA and memoranda of understanding between
the parties as necessary to establish the automatic enrollment process, in
accordance with this section.
(1)
TDHS shall:
(A)
No later than April 1, 2001, provide the LIDA with a complete
database of its clients, stripped of all information except as listed below,
and sorted by ZIP codes. For each client, the database shall include:
(i)
Full name; and
(ii)
Service and mailing addresses, including city, state,
and five-digit ZIP code, following the U.S. Postal Service standards;
(B)
Provide the LIDA with monthly updates of the names, or
ESI ID if available, and addresses of new clients and any address changes
for existing clients who move.
(C)
Provide monthly updates of clients who are no longer receiving
benefits from TDHS as of the twelfth month of client enrollment in the low-income
discount program.
(D)
Distribute the self-certification applications in TDHS
offices statewide.
(2)
ERCOT shall:
(A)
No later than April 1, 2001, allow the LIDA to have access
to a database of residential premises that includes for each premise:
(i)
Service address, including city, state, and five-digit
ZIP code, following the U.S. Postal Service standards; and
(ii)
ESI ID.
(B)
Provide the LIDA with monthly updates of new residential
premises and their ESI IDs.
(C)
Provide the LIDA with monthly updates of residential premises
that have had a change of tenant (i.e., move-out/move-in).
(D)
Provide the LIDA with monthly updates of those customers
and ESI IDs who switched retail electric providers.
(3)
LIDA shall:
(A)
Retrieve the initial database of residential premises and
ESI IDs from ERCOT.
(B)
Retrieve the initial database of clients from TDHS.
(C)
Establish a list of eligible ESI IDs by initially, and
then periodically, comparing the addresses from the ERCOT and TDHS databases
and identifying records that reasonably match.
(D)
Retrieve on a monthly basis the ERCOT's update of change
of tenants and remove those ESI IDs from the list of eligible ESI IDs.
(E)
Retrieve on a monthly basis the ERCOT's list of new premises
and add those to the database used for matching.
(F)
Retrieve on a monthly basis the TDHS list of addresses
of new clients and clients who have moved and add those that reasonably match
the ERCOT list to the list of eligible ESI IDs.
(G)
Implement a program whereby potential low-income customers
can self-certify for enrollment in the rate reduction program, as specified
in subsection (e)(2) of this section. The program must enable the customer
to submit a change of address.
(H)
Develop procedures to notify customers of enrollment, expiration,
and opportunities for renewal of the rate discount program.
(I)
Annually report to the commission as to the number of customers
enrolled through the automatic enrollment process and the number of customers
enrolled though self-certification.
(J)
Make the database of eligible ESI IDs available to the
REPs.
(4)
A REP shall:
(A)
Retrieve on a monthly basis the list of eligible ESI IDs
from the LIDA.
(B)
Compare the list of its customers with the list of eligible
ESI IDs, and enroll those ESI IDs that match in the rate discount program.
The customer enrollment shall take place within the first billing cycle if
notification is received within seven days before the end of the billing cycle
or within 30 calendar days after the REP receives notification from the LIDA,
whichever comes first.
(C)
Develop procedures to notify customers of enrollment, expiration,
and opportunities for renewal of the rate discount program.
(D)
Notify customers twice a year about the availability of
the rate discount program.
(E)
Provide to the commission copies of materials regarding
the rate discount program given to customers during the previous 12 months.
(g)
Confidentiality provision.
(1)
All data transfers shall be conducted under the terms and
conditions of a TDHS confidentiality agreement so as to protect customer privacy.
The acquired data shall only be used for the purposes of implementing automatic
enrollment.
(2)
Data shall not be provided to the REPs in advance of registering
customers. LIDA's protocols and procedures shall be developed in a way that
maintains the customer eligibility for the rate discount as proprietary data
not to be used for any other purpose.
§25.457.Implementation of the System Benefit Fee by the Municipally Owned Utilities and Electric Cooperatives.
(a)
Purpose. The purpose of this section is to implement the
system benefit fee and associated programs as they relate to municipally owned
utilities and electric cooperatives.
(b)
Applicability. This section applies to a municipally owned
utility and electric cooperative, no sooner than six months preceding the
date on which a municipally owned utility or an electric cooperative implements
customer choice in its certificated service area.
(c)
Definitions. The following words and terms, when used in
this subchapter, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Electric cooperative--As defined in §25.5 of this
title (relating to Definitions).
(2)
Municipally owned utility--As defined in §25.5 of
this title.
(d)
Implementation of fee collection. Not earlier than six
months before the onset, and not later than the day of implementation of customer
choice in its service territory, a municipally owned utility or an electric
cooperative shall impose on its customers, including its transmission and
distribution customers who choose to receive a single bill from the municipally
owned utility or electric cooperative, a system benefit fee, as determined
by the commission pursuant to §25.451(d) of this title (relating to the
Administration of the System Benefit Account).
(e)
Billing requirements. Each municipally owned utility or
electric cooperative shall comply with the billing requirements in §25.451(h)
of this title.
(f)
Remittance of funds. The system benefit fee collected by
a municipally owned utility or an electric cooperative shall be remitted to
the Texas Comptroller of Public Accounts (Comptroller) pursuant to §25.451(g)
of this title.
(g)
Fee reduction. The commission shall, on a request by a
municipally owned utility or an electric cooperative, reduce the system benefit
fee, imposed on its retail customers, by an amount equal to the amount provided
by the requesting municipally owned utility or an electric cooperative, or
their retail customers, for local, low-income programs and local programs
that educate customers about the retail electric market in a neutral and non-promotional
manner. The qualifying low-income programs must reduce the cost of electricity
to the recipients of such programs and be targeted at customers whose total
household income does not exceed 125% of federal poverty guidelines. At the
time of its request, and once a year thereafter, the municipally owned utility
or an electric cooperative shall provide to the commission the following:
(1)
The total in kWh of electric power sold to its retail customers
in the 12 months preceding the request;
(2)
The total amount spent on the qualifying, local, low-income
programs, for which the reduction is being sought, in the 12 months preceding
the date of request;
(3)
The total amount spent on qualifying, local, educational
programs, for which the reduction is being sought, in the 12 months preceding
the date of request;
(4)
The total amount projected to be spent on qualifying, local,
low-income programs, for which reduction is being sought, in the 12 months
following the date of request; and
(5)
The total amount projected to be spent on local, qualifying,
educational programs, for which reduction is being sought, in the 12 months
following the date of request.
(h)
Reduced rate. A municipally owned utility or an electric
cooperative shall establish a reduced rate for its low-income customers, who
are eligible for a rate discount pursuant to §25.454(d) of this title
(relating to the Rate Reduction Program), which will be discounted off the
standard retail service package established under the Public Utility Regulatory
Act (PURA) §40.053 or §41.053, as appropriate.
(i)
Reduction in program funding. If a municipally owned utility
or an electric cooperative requests a reduction in fees paid pursuant to subsection
(g) of this section, then the portion of the system benefit fee proceeds allocated
for low-income or education programs for that municipally owned utility or
electric cooperative shall be reduced by the amount of such reduction.
(j)
Reimbursement. To receive reimbursement for the rate discounts
provided to eligible low-income retail customers, the municipally owned utility
or electric cooperative shall comply with §25.451(j) of this title. The
municipally owned utility or electric cooperative may seek reimbursement for
the difference between the reduced rate charged to its low-income customers
and the standard retail service package established under PURA §40.053
or §41.053, as appropriate. The total annual reimbursement for a municipally
owned utility or electric cooperative shall not be more than the proportional
amount a municipally owned utility or electric cooperative has paid into the
system benefit account. The proportional amount shall be established by the
commission in the following manner:
(1)
By calculating a share of the total revenue in the system
benefit account that is spent on each of the programs as described in PURA §39.903(e)
in the preceding 12 months;
(2)
By calculating the share of total spending on programs
pursuant to PURA §39.903(e)(1) paid by each municipally owned utility
or electric cooperative into the system benefit account; and
(3)
Any such calculations can be amended by the commission
as necessary throughout the year.
(k)
Reporting requirements. If a municipally owned utility
or an electric cooperative continues to bill customers pursuant to PURA §40.057(c)
or §41.057(b), as appropriate, then the municipally owned utility or
electric cooperative shall file with the commission two types of reports.
One report will identify the amount of system benefit fee collected and paid
by its retail customers pursuant to §25.451(i)(1) of this title; the
second report shall identify the amount of system benefit fee paid by the
transmission and distribution only customers pursuant to §25.451(i)(2)
of this title. Both types of reports shall be filed with the commission at
the time the system benefit fee is paid pursuant to §25.451(g) of this
title.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 21, 2000.
TRD-200008886
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: January 10, 2001
Proposal publication date: September 15, 2000
For further information, please call: (512) 936-7308
16 TAC §§25.471-25.475, 25.477-25.485, 25.491, 25.492
The Public Utility Commission of Texas (commission) adopts
new §§25.471-25.475, 25.477-25.485, 25.491, and 25.492, Customer
Protection Rules for Retail Electric Service, governing the relationship between
a retail customer and a retail electric provider, with changes to the proposed
text as published in the September 1, 2000
Texas
Register
(25 TexReg 8544). The new sections are necessary to implement
the Public Utility Regulatory Act (PURA), Texas Utilities Code Annotated §39.101,
Customer Safeguards; §39.1025, Limitations on Telephone Solicitation;
and chapter 17, subchapters A, C and D, Customer Protection. The new sections
seek to foster competition, while balancing customer protection and establish
minimum customer service rules by which retail electric providers (REPs) must
abide in providing electric service to residential and small commercial customers.
The focus of the implementation includes: delineation of standards for the
provider of last resort (POLR) and affiliate REPs, disclosure requirements,
and the prohibition of fraudulent, unfair, misleading, deceptive, and anti-competitive
practices. These new sections were adopted under Project Number 22255.
A public hearing on the proposed sections was held at commission offices
on October 16, 2000 at 9:00 a.m. Representatives from American Association
of Retired Persons (AARP), American Electric Power Company, Inc. (AEP TDUs),
American Electric Power Energy Services (AEP Energy Services), Consumers
Union Southwest Regional Office (Consumers Union), Office of Public Utility
Counsel (OPC), Reliant Energy, Inc. (Reliant), Retail Electric Provider Coalition
(REP Coalition), Texas Legal Services Center (TLSC), Texas Ratepayers' Organization
to Save Energy (Texas ROSE), and TXU Electric-Retail Company (TXU Retail)
attended the hearing and provided comments. To the extent that these comments
differ from the submitted written comments, such comments are summarized herein.
The commission received comments on the proposed new sections from AEP
TDUs; AEP Energy Services; Center for Energy & Economic Development (CEED);
East Texas Electric Cooperative (ETEC); Enron Corporation, (Enron); Entergy
Gulf States, Inc. (Entergy Texas REP and Entergy TDU); Environmental Defense
Fund (EDF); Green Mountain Energy Company (Green Mountain), New Energy, Inc.,
and Enron Energy Services (collectively, Independent Retailers); The New Power
Company (New Power); Reliant; REP Coalition; San Antonio City Public Service,
the Cities of Austin, Garland, and Denton (collectively, MOU Commenters);
Shell Energy Services Co. (Shell); Southwestern Public Service Company (SPS);
the State of Texas; Texas Electric Cooperatives (TEC); Texas Industrial Energy
Consumers (TIEC); TLSC, Texas ROSE, OPC, AARP, Consumers Union, Public Citizen
Texas, Texas Association of Community Action Agencies (collectively, Consumer
Commenters); Texas-New Mexico Power Company (TNMP); TXU Electric Company (TXU
TDU), and TXU Retail.
Within the proposed rules, the term "electric service provider" was used
to refer to affiliated and non-affiliated retail electric providers (REPs)
and the provider of last resort (POLR). The comments received by the commission
from various parties also used the term electric service provider, often abbreviated
as ESP. There was some confusion among the commenters with respect to the
applicability of the electric service provider term to municipally owned utilities
and electric cooperatives. Additionally, the commission notes that ESP is
a term of art in other jurisdictions, and its definition in those jurisdictions
may be significantly different from that used in these proposed rules. For
these reasons, the commission has determined that the most appropriate term
to refer to these entities is retail electric provider (REP), as defined in
PURA §31.002(17) and §25.5(67) of this title (relating to Definitions),
with the clarification that the term REP does not, in these rules, refer to
a municipally owned utility or electric cooperative when it sells retail electric
power and energy within its certificated service territory. The commission
has amended the proposed rules to reflect this change in terminology. Furthermore,
for purposes of consistency and clarity in this preamble, commenters' references
to "ESPs" have been summarized as references to "REPs."
In the preamble to the proposed rule, the commission posed the following
questions:
Question 1: Are the proposed rules consistent
with the standards proposed by the Coalition for Uniform Business Rules (CUBR)?
The commission notes that the CUBR proposal, issued in September 1999,
represents the competitive providers only and is not the same as the Uniform
Business Practices (UBP) project. The CUBR report was compiled primarily by
prospective competitive suppliers and does not necessarily represent the perspectives
of other market participants. In contrast, the UBP project is a consensus
effort that included, to varying degrees, transmission and distribution utilities
(TDUs), competitive providers, and consumer groups. The UBP project produced
a final report published on August 1, 2000. All commenters answered this preamble
question by referring to the CUBR report and did not make reference to the
UBP report. The UBP report defers to state regulators on most policy issues,
and the commission exercises its discretion on the policy raised in response
to this question.
REP Coalition, SPS, and TNMP all noted provisions of the proposed rules
that are materially inconsistent with the CUBR rules. First, all noted that
CUBR's provision for seven calendar days contrasted with the proposed provision,
in §25.474(j)(2)(A)(iii), which included seven business days from the
date the enrollment notice is sent to the last date a customer may respond
to the enrollment notice. REP Coalition and SPS asserted that CUBR's calendar
day standard was more reasonable and recommended that the proposed rule be
changed to reflect calendar days, as provided in CUBR.
The commission appreciates the need to adopt consistent, nationwide standards,
when appropriate. The commission believes that customers should be provided
with sufficient time to respond to an enrollment notice, particularly if such
notice contains an incorrect switch. The commission expects that the registration
agent will have the capability of receiving customer cancellation requests
24 hours a day, seven days a week. Therefore, the commission agrees to the
proposed change and modifies §25.474(j)(2)(A)(iii), accordingly.
REP Coalition and SPS noted that CUBR rules provide for the customer to
notify the registration agent that the enrollment is "incorrect." They suggested
that the proposed rule allows the customer to "cancel" the switch request
and asserted that the provision implies that the customer may cancel its service
with the REP for any reason. These parties asserted that CUBR's enrollment
notice is solely a slamming protection and does not grant the customer the
right to cancel the switch unless the REP is not the same as the REP the customer
has selected to provide service. REP Coalition recommended that the proposed
rule be revised to be consistent with CUBR.
The commission agrees that the purpose of the notice provided to customers
by the registration agent is to allow the customer to confirm that the selected
REP is the "correct" REP. The commission changes §25.474 to reflect this
understanding. However, the commission notes that the registration agent cannot
engage in substantive distinctions between customers who allege slamming and
those who have merely changed their mind. The customer's contact must be interpreted
broadly and the switch cancelled by the registration agent for any customer-directed
reason.
REP Coalition and SPS noted that CUBR's standards allow a REP's bill format
to be determined at the REP's discretion. REP Coalition and SPS added that
the CUBR rules further provide that the maximum required content for electric
service does not include the following information included in the proposed
rules: (1) a separate calculation of the average unit price of the current
charge for electric service, (2) the customer's usage for the prior 12 billing
periods, and (3) conspicuous notice of any services or products being provided
to the customer that have been added since the previous bill. REP Coalition
recommended the proposed rules be changed to delete the average price requirement
and to permit the customer and the REP to agree to other format and content
provisions consistent with the CUBR rules and with the commission's proceedings
regarding billing for other services.
The commission notes that PURA §39.101(a)(4) requires that bills be
presented in a clear format. Further, §39.101(a)(7) requires information
concerning rates be presented in a standard format that will permit comparisons
between prices. The commission maintains that both a standardized Electricity
Facts label and a standardized actual cost disclosure on a customer's bill
are required for customers to make valid comparisons among REPs and to verify
that the price that was disclosed by a REP resembles the price actually being
charged to the customer. The commission declines to modify §25.479 to
remove the requirement to calculate the average unit price. The commission
agrees that the requirement to provide a 12-month usage history on a customer's
monthly bill may be unduly burdensome and eliminates this requirement from §25.479.
However, the terms of service document provided to the customer by the REP
shall contain a notice about how the customer can obtain a 12-month usage
history. PURA §17.102(3) requires clear and easy identification of the
REP's name, services or products, and charges being billed to the customer.
The commission's experience in the telecommunications industry has shown that
customers benefit from clear disclosures of changes to the products or services
for which they are being billed. As a result, the commission declines to remove
the requirement found in §25.479 to provide a conspicuous notice of any
products or services that were added since the customer's previous bill.
REP Coalition, SPS, and TNMP noted that CUBR's standards for telephonic
enrollment provide for the REP to either audio record or third party verify
a customer's authorization of a REP, while the proposed rules allow only for
third party verification. REP Coalition recommended revision of the proposed
rules to allow both options, consistent with CUBR rules.
The commission agrees that an audio recording is a satisfactory method
for capturing a customer's authorization and verification. The commission
modifies §25.474(f)(2) to allow audio recordings. Independent third party
verification remains as another acceptable method of verifying a customer's
authorization.
REP Coalition recommended proposed §25.491(a)(3) be revised to permit
five business days for consistency with CUBR rules, asserting that the information
likely to be requested by the commission is information related to verification
of a customer's authorization.
The commission modifies the requirements of the rule, now found in §25.491(b)(3),
to lengthen the time REPs have to provide information from five to 15 calendar
days.
TNMP noted that CUBR standards provide customers with protection from "illegal
discriminatory behavior in (a REP's) selection and/or service of customers,"
and pointed out that, while the proposed rules include a similar provision,
they also include the "marketing" of electric service. TNMP contends the addition
of "marketing" to the activities that are subject to the discrimination provisions
of Senate Bill 7 (SB7), 76th Legislative Session, is inconsistent with CUBR
and recommended that the proposed rule be changed to reflect consistency with
CUBR.
The commission addresses this concern in its response to Question 2, below.
Question 2: Does the rule language regarding market
practices and reporting requirements at proposed §25.471(c) and proposed §25.491(b)(1)
provide enough specificity for the commission to determine if a marketing
practice is discriminatory?
The State of Texas stated that the language in these sections would assist
the commission in determining instances where further investigation of discriminatory
marketing practices is warranted, but did not believe a self-reporting mechanism
would identify all instances of discriminatory marketing practices. The State
of Texas commented that there would have to be some reliance on complaints
from affected parties and specific investigation by the commission.
Shell and TXU Retail stated the rule does not provide sufficient specificity
to determine what constitutes a discriminatory marketing practice, leaving
REPs vulnerable to frivolous complaints. Shell and TXU Retail recommended
the commission either clearly define proscribed marketing practices, or delete
the word marketing in §25.471(c). Shell noted that deleting marketing
in §25.471(c) would be consistent with PURA §39.101(c), which prohibits
discrimination in the provision of electric service, but does not mention
marketing.
AEP Energy Services, Entergy Texas REP, SPS, and REP Coalition stated prohibitions
on marketing of electric services should be limited to safeguards against
fraudulent, unfair, misleading, deceptive, or anti-competitive business practices.
These parties were concerned that certain provisions in §25.471(c) and
the reporting requirement of proposed §25.491(b)(1) exceeded PURA's intent
for the monitoring and regulation of marketing practices for electric services.
Consumer Commenters stated a "thou shalt not discriminate" approach will
not prevent discrimination by REPs and puts the burden on customers to prove
that they have been discriminated against. Consumer Commenters recommended §25.471(c)
be expanded to require REPs and other marketers to develop written policies
for informing personnel of the commission's anti-discrimination requirements
and of internal company procedures designed to assure compliance.
AEP Energy Services stated the measures proposed by Consumer Commenters
might be appropriate after discrimination has been shown to exist; however,
they appear to be excessive requirements for REPs who adhere to the discrimination
prohibitions. AEP Energy Services noted the ability of the commission to consider
sanctions for violating discrimination prohibitions should be an adequate
deterrent and that §25.107(h) of this title, (relating to Certification
of Retail Electric Providers), clearly provides that a REP cannot discriminate
if it wishes to maintain its certification.
TXU Retail opposed Consumer Commenters' change and stated the additional
reporting and policy requirements would add unreasonable cost and micro-management
to the process. TXU Retail asserted that proposed §25.485 already provides
a means for a customer to complain if he feels he has been subjected to discrimination
and that the commission's Market Oversight Division will have the ability
to access any information to determine whether a further investigation is
warranted. TXU Retail further noted that ERCOT is creating an extensive system
to support this process.
AEP Energy Services, Entergy Texas REP, TNMP, and REP Coalition stated
that proposed §25.471(c) and proposed §25.491(b)(1) could also be
broadly interpreted to preclude a REP from limiting its marketing of electric
service to certain utility service territories or areas within certain utility
service territories. These parties noted that any type of statewide marketing
obligation is unsupported by PURA or §25.107, and the imposition of such
a requirement would impose an impenetrable barrier to entry for REPs wishing
to conduct business in Texas. The parties urged the commission to appreciate
the distinction between prohibited discrimination and permissible and appropriate
strategic marketing activities.
AEP Energy Services, Entergy Texas REP, Independent Retailers, Reliant,
TNMP, TXU Retail and REP Coalition recommended that the term marketing be
deleted from §25.471(c).
The commission appreciates the concerns expressed by parties over the inclusion
of the term "marketing and" in §25.471(c). The commission modifies subsection
(c) to reflect that REPs should not "unduly" discriminate in the marketing
or provisioning of electric service. PURA §17.001 clearly delineates
the commission's authority to adopt and enforce rules that protect retail
customers from fraudulent, unfair, misleading, deceptive, or anticompetitive
business practices. The commission finds that marketing is a business practice.
Additionally, PURA §39.352(c) and §39.353(c), require REPs and aggregators,
respectively, to comply with all customer protection provisions, all disclosure
requirements, and all marketing guidelines established by the commission.
Additionally, in response to arguments that the commission is mandating that
REPs or aggregators implement a statewide marketing campaign, the commission
notes that PURA §17.004(a)(4) specifically states that customers should
be protected from "unreasonable discrimination on the basis of geographic
location." The commission fully expects that REPs and aggregators will target
their marketing efforts to the specific geographic areas in which they will
be providing service. Consequently, the commission does not expect that such
targeted marketing efforts, in and of themselves, would result in undue or
unreasonable discrimination. The commission also believes that the requirements
it adopts in §25.491 preclude the need for the additional standards proposed
by Consumer Commenters in §25.471(c).
Consumer Commenters supported the requirements in proposed §25.491(b)(1),
because reporting by zip code is simple and does not reveal confidential consumer
information. However, Consumer Commenters recommended this section be amended
to satisfy PURA §39.101(d), which requires that REPs report annually
as to the extent of coverage and services provided by zip code and census
tract. Independent Retailers opposed any proposed enlargements to proposed §25.491(b).
TXU Retail disagreed with Consumer Commenters' changes, because a census
tract requirement raises a problematic issue. TXU Retail acknowledged that
PURA §39.101(d)(2) provides for the commission to receive reports from
certificated entities by zip code and census tract, but noted census tracts
have confusing boundaries that do not follow or replicate zip code, area code,
city limit, or county limit boundaries. TXU Retail further noted that the
ERCOT registration database is not currently being designed to capture this
data. TXU Retail stated that the ERCOT database could be converted and interpreted,
but the cost of such a project must be considered. TXU Retail recommended
the commission investigate this issue to determine whether the data are available
at a reasonable cost before adopting this provision.
SPS asserted that the requirement for data regarding direct mail solicitation
is not necessary to monitor discriminatory practices and such a reporting
requirement would pose a significant administrative burden.
AEP Energy Services, Entergy Texas REP, and REP Coalition agreed with SPS
and stated it appeared that the reporting requirement contained in proposed §25.491(b)(1)
was intended to ensure that REPs would utilize direct mail marketing to reach
all customers in a utility's service territory. These parties commented it
would be inaccurate and highly inappropriate to assume that a REP was not
marketing to a broad customer base solely because there were no direct mail
solicitations sent to a certain zip code. These parties noted experience in
other states indicates that REPs will use a variety of marketing techniques
to reach customers. The parties also noted marketing data for electric products
and services is highly proprietary information that should not be subject
to commission review as this may prevent REPs from entering the market. These
parties asserted the commission will know where each REP's customers are located,
because of the annual report required by PURA §39.101(d)(2) and proposed §25.491(b)(2),
and no additional benefit will be derived by providing annual reports of proprietary
marketing information. AEP Energy Services, Entergy Texas REP, REP Coalition,
and TNMP urged the commission to consider the practical problems associated
with trying to identify discriminatory marketing practices for electric service
and to afford all REPs as much flexibility as possible with regard to marketing
their electric products and services. For the reasons discussed above AEP
Energy Services, Entergy Texas REP, Independent Retailers, Reliant, TNMP,
TXU Retail, and REP Coalition recommended proposed §25.491(b)(1) be deleted.
Consumer Commenters replied that the industry described marketing strategies
as discriminatory by nature, but rational business decisions. Consumer Commenters
disagreed and asserted that such a "marketing free-for-all" will inevitably
lead to redlining. Consumer Commenters asserted their proposal takes the extra
step to assure that complaint data and disconnect data are similarly provided
to the commission, so the commission may readily perform an annual desk review
to determine whether there is a need for a more formal inquiry. Furthermore,
Consumer Commenters asserted that knowing that the data is being examined,
the industry will take steps internally to assure that discriminatory practices
are not occurring.
The commission adds subsection (a) to clarify application of this section,
resulting in citation changes to the remaining subsections. The commission
agrees with the arguments presented by parties that the requirement to report
the number of direct mail solicitations annually distributed to prospective
customers by zip code would be unduly burdensome, and would not prevent redlining.
As such, the commission removes this requirement. However, the commission
modifies §25.491(b)(1)(A) to clarify that REPs should maintain records
and data necessary to demonstrate compliance with anti-discrimination requirements
in addition to all other applicable commission rules. The commission also
agrees with Consumer Commenters that information in §25.491(c) should
be reported by census tract, as well as by zip code and modifies §25.491(c)
accordingly. The commission understands that census tract software is readily
available that can easily convert the address and zip code information that
will already be available to REPs. The commission also adopts subsection (d),
which requires REPs to provide the commission and the Office of Public Utility
Counsel with any information necessary to investigate an alleged discriminatory
practice.
Question 3: Should the commission adopt a prepayment
plan, as set forth in §25.478(a)(3)(D)-(E), as a means for bona fide
low-income applicants and certified victims of family violence to avoid the
necessity of paying a deposit that might otherwise be required in order to
receive service? If so, what additional requirements, if any, should apply
to such prepayment plans?
The State of Texas supported the adoption of a prepayment plan; it did
not believe any additional requirements were necessary.
TNMP, REP Coalition, and SPS stated that prepayment plans should be offered
at the discretion of the REP and, if offered, should be made available to
all customers in accordance with that REP's terms of service. They further
stated that because PURA prohibits discrimination based on income and family
status, payment options should not be designed to single out a specific class
of customers based on the statutory criteria.
Shell stated that it is not required to offer a prepayment plan under §25.478(a)(3)(D),
because it is not an affiliate REP. Shell, REP Coalition, and SPS stated that
if such a plan were required of all REPs, there should be readily available
and easily verifiable means for REPs to identify bona fide low-income applicants
and certified victims of family violence eligible for the program. Shell proposed
that the commission could facilitate implementation of such a program by making
a list of qualified applicants available to REPs in a manner that would maintain
the confidentiality of such information. REP Coalition stated that the commission
would have to provide guidance regarding how to administer the prepayment
option. REP Coalition also stated that there were additional issues on whether
special metering would be required and how the prepayment would be calculated.
Consumer Commenters proposed alternate language that would define the prepayment
plan as a levelized payment based on an estimate of the customer's annual
electric usage. They further proposed an annual adjustment in the levelized
payment based on the customer's actual use and that the prepayment plan could
not limit the amount of electricity the customer uses.
The commission acknowledges that a deposit can represent a significant
barrier to a customer who has limited financial resources and may limit a
customer's ability to obtain electric service. Allowing a customer to pay
a required deposit over a set period of time would aid in eliminating this
barrier, while still providing security for the affiliate REP or POLR. However,
the commission does not find it is necessary to create an additional protection
for low-income customers beyond those already established in PURA §39.903.
Accordingly, the commission modifies the proposed language at §25.478(a)(3)(D)
to restrict the waiver of a required deposit for certified family violence
victims only. The commission agrees with Shell that there should be an easily
verifiable means for REPs to identify certified victims of family violence
and includes such provisions.
Question 4: With respect to proposed §25.479(b)(17),
relating to issuance and format of bills, what labels should be required to
be used by REPs that elect to present their electric bills in an unbundled
format? Please provide the standard label and a definition of what types of
charges or services that label should include.
REP Coalition said that the proposed list contained in proposed §25.479(b)(17)
is sufficient and acceptable for providers offering unbundled service and
a corresponding bill. However, AEP TDU and TXU TDU said that if the listing
of unbundled service terms is intended to be all-inclusive, the terms "gross
receipts assessment" and "nuclear decommissioning fee" should be added.
The commission agrees that the nuclear decommissioning fee, designated
as a nonbypassable charge in PURA §39.205, should be among the unbundled
terms listed on the bill. However, the commission declines to add the gross
receipts assessment to the list of unbundled charges because the gross receipts
assessment is charged against the "gross receipts from rates charged to the
ultimate consumer" (see PURA §16.001(b)) and does not constitute a nonbypassable
charge. The commission notes that the definitions of the labels, now §25.479(c)(1)(P),
will be established in a separate implementation project or working group.
Consumer Commenters opposed allowing providers to issue bills under a single
bundled rate, saying that customers need a breakdown so they can check the
accuracy of their bills and accurately compare the prices offered by different
providers. According to Consumer Commenters, allowing the transmission and
distribution rate, system benefit fee, transition charge and other fixed charges
to be rolled into a single per-kWh charge for billing purposes would allow
a REP to overcharge for these regulated services as part of a market rate.
They added that if competition transition charges (CTCs) are not shown on
the bill, neither residential customers nor the commission can ensure that
illegal cross subsidies or commercial discounts are not allowing certain customer
classes to avoid paying their fair share of stranded costs.
New Power, Green Mountain, Reliant, and TXU Retail disagreed with Consumer
Commenters. Reliant said that any charge above the regulated non-bypassable
fees are, by definition, not a charge for regulated services. REP Coalition,
SPS, AEP Energy Services, Entergy Texas REP, and TXU Retail said a provider
should be able to offer either bundled or unbundled products or services to
its customers and should be allowed to present its bill with standard labels
for charges or notices in accordance with its terms of service. TXU Retail
noted that the terms and conditions a customer accepts prior to service will
determine the way services will be priced and will be the standard against
which a customer will judge whether an overcharge has occurred.
TNMP, Shell, and REP Coalition commented that it should be left to the
individual REP to propose a format for disclosure of non-electric products
and services, because each product would have unique pricing and unique labeling
needs. Shell noted further that requiring a massive amount of information
to be included on the bill would add to customer confusion and burden the
market with unnecessary costs without providing any meaningful customer protection.
Shell said that customers who want detailed billing information are certainly
entitled to it, but those who simply want to know "how much do I owe" should
not have to hunt through other information on the bill.
PURA §39.202 requires an affiliate REP to make available to its residential
and small commercial customers rates that, on a bundled basis, are 6.0% less
than the affiliated electric utility's corresponding average residential and
small commercial rates in effect on January 1, 1999. These bundled rates will
be known as the "price to beat" for residential and small commercial customers
and shall include all costs formerly billed to customers, including those
associated with generation, transmission and distribution, and customer service.
The Electricity Facts label, proposed in §25.475(e)(1)(A)(i), also requires
all REPs to disclose the "bundled" price. Further, PURA §17.004(a)(8)
and §39.101(a)(3) require bills be presented in a clear, readable format
and in easy-to-understand language. The commission anticipates that the objective
of a clear, easily understood bill would be aided by the provision of charges
in bundled format, consistent with the manner in which such charges are currently
disclosed, and will be disclosed in the future in the Electricity Facts label.
The commission strongly favors a bundled bill format. The commission also
agrees with Consumer Commenters that customers need to have access to itemized
billing information if they wish to check the accuracy of their bills. However,
this objective can be accomplished by requiring a REP that offers a bundled
bill format to provide a notice in the terms and conditions document advising
the customer that unbundled information can be obtained by contacting the
REP, and allowing the customer to call the provider and ask for a detailed
breakdown of the bundled charges. Regarding products that combine electric
and non-electric service, the commission holds that any bundled bill must
prominently include a subtotal for electric-only charges. The provider may
choose whether or not to further unbundle the non-electric charges, as long
as the billing method does not conflict with any other provision of this subchapter.
Question 5: Should a REP other than the POLR be
permitted to charge a late fee for overdue payments?
SPS, Entergy Texas REP, and REP Coalition stated that the ability of REPs
to charge a late fee for overdue payments sends appropriate pricing signals
to customers. They determined that late fees are designed to encourage customers
to pay their bills on time by giving them incentive to prioritize payments.
The parties contend that the ability to charge late fees is simply an additional
tool that REPs may use for non-payment to reduce the costs of collection and
the level of write-offs. REP Coalition concluded that if late fees are not
allowed, there would be a negative impact on the competitive market. Entergy
Texas REP commented that late fees will have the effect in the competitive
market of fewer disconnect notices, thus lowering the costs of credit and
collection, while reinforcing positive payment behaviors of the consumer.
REP Coalition and SPS recognized that both late payment fees and the right
to authorize a disconnect are incentives for residential customers to pay
their bills. They stated that if REPs were given the right to disconnect for
non-payment of a customer's bill, the REPs would be willing to forego the
right to charge a late fee for residential customers and would be willing
to comply with other provisions regarding credit requirements, deposit, deferred
payment plans, and billing arrangements. SPS also agreed to forgo small commercial
late charges in exchange for the right to authorize a disconnection for non-payment.
In its reply comments, Reliant agreed that any REP that does not have the
right to disconnect customers for non-payment of electric service bills should
be allowed to charge late fees limited to 5.0% of the customer's past due
bill. REP Coalition, in its reply comments, stated that late payment fees
provide the second best incentive behind the threat of disconnection for customers
to pay bills on time.
In support of the proposed rule, Consumer Commenters maintained that the
existing prohibition of late fees on residential customer bills is important,
and should continue until evidence shows that late fees for residential customers
are both necessary in a competitive market and in the best interest of consumers.
Consumer Commenters pointed out that late fee proposals have been rejected
for residential customers in the past. They cited Project Number 19513,
Consumer Commenters also commented that the cost to a REP of collecting
late payments is already accounted for in the utility's cost of service. They
stated that after competition begins, the allowance will be rolled into a
REP's competitive rates. REPs, they concluded, will recover the cost of uncollectible
accounts in market-based rates the way other businesses do. TXU Retail stated
that Consumer Commenters' arguments that REPs would profit from late fees
are wrong and unsupportable. TXU replied that in the historical regulated
market, the commission established rates that were intended to recover collection
costs from all residential customers, and this will not be possible in a competitive
market. Entergy Texas REP commented that Consumer Commenters failed to realize
that we are entering a competitive market and REPs have the responsibility
of paying all non-bypassable charges plus costs associated with the purchase
of generation, regardless of when customers remit payment to the REP. Entergy
Texas REP stated that timely payment by all parties is good for consumers,
good for the market, and supports customer choice by encouraging REP entry.
At the very least, Consumer Commenters contended that REPs should not be
allowed to charge penalties on a deferred payment plan where the Comprehensive
Energy Assistance Program (CEAP), Low-income Home Energy Assistance Program
(LIHEAP), or other publicly funded program makes contributions so as to avoid
forcing agencies to pay late fees and penalties with public funds. TXU replied
that this did not make sense because if a publicly funded program is designed
to help customers pay their bills and late payment fees are part of the bill,
then the late payment fees should be paid. Entergy Texas REP also noted that
not charging late fees to customers receiving payment assistance would create
a need for special record systems and would create additional cost over and
above the cost of carrying the late payment.
TEC and MOU Commenters stated that the municipally owned utilities and
electric cooperatives can set their own rates, and a late fee is included
in rates.
The commission agrees with REP Coalition and SPS that a late fee is an
appropriate incentive to ensure timely payments. Since the ability to disconnect
electric service for non-payment is a right reserved for the POLR, the commission
determines that all REPs, except the POLR, may assess a one time late fee
of 5.0% to the electric service portion of a residential customer's bill,
and has amended the proposed rule accordingly. However, the commission finds
that customers receiving assistance from the system benefit fund should not
be required to pay late fees. The commission also agrees with TEC and MOU
Commenters and determines that municipally owned utilities and electric cooperatives
can set their own rates and late fees when operating in their own service
territories. However, when operating outside their service territory the commission's
customer protection rules, including the application of late fees, shall apply.
Question 6: Should REPs be required to make available
a voluntary customer donation program to benefit low-income customers?
REP Coalition and SPS stated that, while voluntary customer donation programs
may be beneficial, they should not be required; a better way to provide assistance
to low-income customers is the system benefit fund, which has already been
established. TNMP did not oppose such programs, but stated they should not
be mandatory. Shell pointed to the mandatory system benefit fund and noted
the need for additional programs is not clear.
The State of Texas stated that the system benefit fund should be used for
customer assistance and that any other program may be too costly. Reliant
agreed and noted that if a REP wants to institute a donation program, it should
be at the REP's discretion.
Entergy Texas REP made a distinction between emergency or temporary assistance
and the system benefit fund, believing that resources from the system benefit
fund will not be sufficient or timely to provide help for all who need it.
While mandating a checkoff may not be the best way, Entergy Texas REP expressed
willingness to work with others to find a way to maintain the existing safety
net programs.
Consumer Commenters emphasized that PURA requires REPs to offer assistance
programs to low-income customers; therefore, the commission should make such
programs mandatory, including customer donations. Consumer Commenters recommended
programs that would have REPs and POLRs informing customers, through quarterly
billing inserts, about the opportunity to contribute a fixed amount each billing
cycle to an assistance program, mandate all bills to have a check-off box,
and require TDUs to collect money from the REPs and POLRs for distribution
to needy customers. Additionally, 10% of the funds would go towards promotion
of such programs statewide and TDUs would be encouraged to match customer
money with shareholder funds. Finally, those TDUs that currently match funds
would be required to continue to do so at 1999 levels.
Consumer Commenters were also concerned that not mandating voluntary customer
donation programs will eliminate billing assistance programs altogether since
the system benefit fund does not provide temporary help to customers. Consumer
Commenters asserted that omitting such a mandate in the rule is contrary to
PURA §17.004(a)(11), which requires all REPs to offer bill payment assistance
programs. Consumer Commenters' proposal would allow customers to make contributions
to maintain current crisis assistance levels.
Entergy TDU noted that while mandating assistance programs would be seen
as burdensome by REPs and TDUs, Entergy has operated a program similar to
the one proposed by Consumer Commenters for the past 18 years and is a strong
proponent of preserving fuel programs. However, Entergy TDU noted the main
question is how to transition existing programs to the competitive market
and pointed out that in the competitive market, the local community organizations
will not have the resources to deal with a multitude of providers.
Entergy Texas REP agreed with Consumer Commenters that bill payment assistance
programs are important to end-use customers and stated that the system benefit
fund does not address the same types of customers or needs that are met by
the existing bill payment assistance programs, which are not synonymous with
low-income programs. Entergy Texas REP commented that several issues addressed
by Consumer Commenters deserved more attention. Entergy concluded that the
commission did not have the authority to mandate TDUs currently providing
shareholder-matching funds to continue to match these funds at current levels.
Secondly, Entergy Texas REP suggested that funds collected by REPs in bills
from contributors could be passed directly to the bill payment assistance
administrator in each TDU's area. Entergy Texas REP suggested that language
proposed by Consumer Commenters could be revised to provide that the TDUs
would primarily coordinate the interaction between community organizations
and the program administrator. Finally, Entergy Texas REP concluded that if
the commission found that it has the authority to address bill payment assistance
issues, then it would seem appropriate to reimburse REPs for the costs of
such programs out of the collected bill payment assistance programs. Entergy
Texas REP commented that there is time to develop a workable program that
would maintain the voluntary character of such programs and continue their
good work.
The commission agrees with parties regarding the importance of the bill
payment assistance programs and notes their beneficial nature. PURA §17.004(11)
requires REPs to offer low-income customers a bill payment assistance program,
in addition to energy efficiency and affordable rates. The commission agrees
that the system benefit fund provides low-income customers with rate reductions
that meet the "affordable rate" requirement. However, the system benefit fund
does not contemplate a bill payment assistance program for low-income customers.
Consequently, in §25.480(g)(2) the commission requires all REPs to establish
a bill payment assistance program, which shall include a box on customers'
bills that allows customers to make voluntary donations to such a program.
However, the commission declines to delineate how a REP should operate its
program and instead adopts annual reporting requirements that require a REP
to summarize the amount of money set aside for bill payment assistance, the
assistance agencies selected to disburse funds to customers, and the amounts
provided to each assistance agency for that purpose. The commission believes
that such a reporting requirements will provide oversight, without micromanaging
the specifics of each program. However, the commission reserves the right
to more clearly define appropriate bill payment assistance programs should
the need arise.
Question 7: What provisions and processes within
these rules should apply to the customers of individual cooperatives and municipally
owned utilities as they open their home markets to electric competition?
All parties agreed that the proposed rules should apply to retail customers
served by cooperatives and municipally owned utilities outside of their certificated
service area. There was, however, disagreement among parties over the applicability
of the commission's rules within the service areas of municipally owned utilities
and cooperatives that opt into competition.
REP Coalition, Consumer Commenters, TEC, and MOU Commenters, noted that
for customers served by cooperatives and municipally owned utilities within
their service area, PURA provides cooperatives and municipally owned utilities
the authority to promulgate their own rules designed to achieve the statutory
customer protection objectives. MOU Commenters added that none of the provisions
and processes in the proposed rules apply to customers of a municipally owned
utility or cooperative within its service area. MOU Commenters also stated
that the billing standards contained in the draft Terms and Conditions of
Transmission and Distribution Utilities' Retail Distribution Service (commission
Project Number 22187,
Rulemaking to Establish Terms
and Conditions of Transmission and Distribution Utilities' Retail Distribution
Service
) should control in consolidated billing situations.
The State of Texas argued that most, if not all, provisions of these proposed
rules should apply to cooperatives and municipally owned utilities that opt
into competition, because customers deserve the same basic protections regardless
of what entity is providing service. TNMP and SPS also commented that all
provisions and processes in the commission's rules should apply to individual
electric cooperatives and municipally owned utilities that opt into competition.
Without the same customer protections, TNMP claimed that there would be a
non-level playing field among market participants. Consumer Commenters asserted
that the proposed commission rules are the minimum standard every REP must
meet and are not optional.
REP Coalition and Consumer Commenters emphasized that the rules adopted
by municipally owned utilities and cooperatives within their service areas
shall have the same effect of accomplishing the customer protection objectives
of PURA. According to REP Coalition, all customers should expect to have the
same customer protections regardless of the service area in which they reside.
TEC replied that the customer protection rules adopted by municipally owned
utilities and cooperatives are not required to be identical to the commission's
rules, even though they must have the effect of accomplishing the same customer
protection objectives specified in PURA. According to TEC, the customer protection
rules enacted by cooperatives and municipally owned utilities could be significantly
different from the commission's rules, especially if the commission enacts
customer protections beyond those mandated by PURA §17.004(a) and (b)
and §17.102.
Specific concerns were raised by both MOU Commenters and TEC with respect
to the applicability of certain rule provisions, irrespective of whether the
customer was in its existing service area. Specifically, TEC and MOU Commenters
raised concerns over the various reporting requirements imposed by many of
these rules, arguing that such requirements were not consistent with PURA §40.004(7)
and §41.004(5), respectively. TEC and MOU Commenters also raised concerns
regarding the applicability of enforcement actions against electric cooperatives
and municipally owned utilities. The parties argued that the administrative
penalty statute refers to a "person" and that by PURA definition neither a
municipally owned utility nor an electric cooperative is considered a "person."
In its reply comments, TIEC noted that although some of the parties would
like to see the commission's rules made applicable to all retail electric
customers, that is contrary to what is mandated by PURA.
The commission agrees that these customer protection rules apply to customers
served by an electric cooperative or municipally owned utility operating outside
of its certificated service area. In addition, these rules apply to all customers
served by a REP irrespective of the service area (
i.e.
, both inside and outside of the certificated area of a competitive
municipally owned utility or electric cooperative). The commission also determines
that PURA §17.005 and §17.006 give an electric cooperative or municipally
owned utility the authority to adopt and enforce its own customer protection
rules for customers inside its certificated service area, which must meet
the customer protection objectives of PURA. The commission's rules should
serve as a model for the minimum customer protections that all customers can
expect in a competitive market.
The commission agrees with TEC and MOU Commenters and modifies all sections
of these rules to eliminate the relevant reporting requirements. The commission
also agrees that administrative penalties cannot be applied to municipally
owned utilities or electric cooperatives and modifies the applicable sections
of these rules accordingly. However, the commission will issue a report to
the appropriate governing body of a municipally owned utility or an electric
cooperative regarding potential violations.
Question 8: Is the minimum contract term established
in §25.477(a)(8) the appropriate mechanism to discourage customers from
gaming the affiliate REP's price to beat rate?
TNMP commented that the minimum requirement in proposed §25.477(a)(8)
is an appropriate mechanism for discouraging customers from gaming the affiliate
REP's price to beat rate.
Consumer Commenters, the State of Texas, and Shell disagreed, arguing that
customers have a right to seek out the best prices in the market and should
not be penalized for exercising their right to return to the "safe harbor"
of the price to beat rate. The parties also commented that the proposal might
force price to beat customers to make 12-month commitments against their will
because if a provider leaves the market, the returning customer has no choice
but to sign a 12-month contract with the affiliate REP, default to the POLR,
or go without electricity. The proposal would result in: (1) less participation
in the competitive market; (2) more difficulty for new providers to win customers
as customers would be intimidated from switching to new providers; and (3)
damage new providers' ability to compete with affiliates since customers will
be locked into contracts with the affiliate. Shell also argued that PURA §39.202(a)
does not give the commission the authority to allow affiliate REPs to put
conditions on the availability of the price to beat rate or mandate minimum
terms.
Consumer Commenters also commented that customers will not be able to game
the price to beat rate for two reasons: (1) the language in the actual proposed
subsection does not refer to the price to beat and could be read to allow
the affiliate REP to refuse service to any returning customer who refuses
to take a 12-month contract on any rate plan offered; and (2) residential
customers will most likely remain on volumetric meters, paying fixed rates.
Consumer Commenters stated that other states with a competitive retail electric
market have not experienced the problem of residential customers gaming the
system, but that residential customers have been victimized because REPs that
cannot cover wholesale market costs are "dumping" them on the POLR.
The State of Texas said that forcing customers who choose the affiliate
REP to remain for one year would lead to artificially high prices for retail
electricity.
REP Coalition, Shell, and SPS suggested deleting the minimum one-year service
contract term from this rule and addressing the gaming issue in the rulemaking
in Project Number 21409,
Price to Beat
. Shell
and AEP Energy Services said the gaming issue should be addressed by ensuring
that the price to beat accurately tracks changes in the market price for power.
They noted that PURA §39.202(l) permits the commission to adjust the
fuel factor underlying the price to beat to reflect "significant changes in
the market price of natural gas and purchased energy." The parties concluded
that gaming would not occur if there was a level playing field in which the
market price of energy is reflected in the prices charged by competitors,
and the price to beat charged by affiliate REPs.
The commission agrees that customers returning to the affiliated provider
and the price to beat should not be penalized and subject to a long-term contract.
Ensuring that the price to beat accurately reflects market prices of electricity
will more effectively prevent customers from "gaming" the system and will
be addressed in Project Number 21409.
Question 9: In light of the emergency rule adopted
by the commission on August 10, 2000 in Project Number 22869, should the commission
adopt a new standard for terminations and disconnects during prolonged heat
events, that would preclude the future need for such emergency rule? If so,
please provide specific rule language that would be appropriate.
SPS commented that proposed §25.483(i) protects customers from being
disconnected during extreme weather and that there is no need to adopt a different
standard.
TNMP commented that a new extreme weather standard is necessary. TNMP and
SPS argued that extreme weather provisions should be limited to affected counties,
rather than the REP's entire service territory, because it would be unfair
to the REP to follow this requirement if it were certified for the entire
state and only one county was under an advisory. TNMP also argued that the
extreme weather provision should prevent terminations as well as disconnections
to avoid imposing an excessive burden on the POLR from terminations that transfer
the customer to POLR service. However, TNMP suggested that should a future
commission determine the need for emergency action, the commission should
include in the customer protection rules the guidelines for what such a rule
would provide. TNMP commented that an emergency rule should require REPs to
insert in their termination and disconnect notices an offer for a deferred
payment plan, regardless of the customer's payment history, and if the customer
does not contact the REP before the end of the ten-day notice period, termination
or disconnection could take place. TNMP commented that the TDU will be prohibited
under the proposed terms and conditions in Project Number 22187 from disconnecting
if there is a heat advisory issued in their service territory. TNMP stated
that if the customer does contact the REP, the REP would be required to make
alternative payment arrangements with the customer at least once during the
emergency period and that this is consistent with this year's emergency rule
and would not require extensive programming changes to achieve compliance.
REP Coalition commented that a new standard is needed and that heat as
extreme as that experienced during the summer of 2000 demonstrates the need
for additional customer protections and recommended the commission adopt a
new rule for disconnects during prolonged heat events that would preclude
the future need for emergency rules. REP Coalition noted it did not address
the application of the new rule to terminations since terminations will not
result in an interruption of electric service to the customer. REP Coalition
argued that the customer must be required to enter into a payment plan and
submit a minimum level of payment during the period in which disconnections
are prohibited and that the rule should encourage customers to adhere to the
payment plans to avoid being transferred to the higher priced POLR. REP Coalition
further argued that once an extreme weather emergency has been declared, REPs
should be required to insert in their disconnect notices an offer for a deferred
payment plan and that if the customer does not contact the REP before the
end of the ten-day notice period and enter into a deferred payment plan, the
disconnect could take place. REP Coalition also proposed the minimum payment
be automatically set as the 12-month average for the location, and any amounts
over the 12-month average be deferred until the extreme conditions expire.
REP Coalition further proposed a deferred payment plan to provide that the
delinquent amount be paid in equal installments over a period of at least
six billing cycles, unless the residential customer agrees to a shorter period,
and the deferred payment plan should not include a late payment penalty (as
long as the installments are paid on time), interest, or a deposit. Shell
agreed that the commission should adopt standards for terminations and disconnections
during prolonged heat events, but it had no specific suggestions regarding
appropriate language.
Consumer Commenters stated that the commission should maintain the current
weather standards triggering a prohibition on disconnection during extremely
hot and extremely cold weather and that a rule similar to the emergency rule,
offering a deferred payment plan to all customers to pay off high bills caused
by extreme weather, should be incorporated into this customer protection rule.
Consumer Commenters suggested the rule require utilities to monitor weather
conditions and have a system for reporting the presence of a weather emergency
to employees, energy assistance agencies, and the commission. Consumer Commenters
stated they wanted the same standard applied to the cold weather emergency
language. They further noted that the standards for defining weather extremes
are inadequate to fully protect consumers and that health risks are posed
by both heat and cold under temperatures not as extreme as those required
under the commission's rules. Consumer Commenters preferred that the commission
either lower the summer threshold and raise the winter threshold or institute
a seasonal ban on disconnection of residential service.
As an alternative, they suggested implementing a deferred payment plan
that would allow a customer to maintain service upon payment of a predetermined
minimum amount. Consumer Commenters noted that equal monthly payments are
convenient for consumers on a fixed budget, but that the commission's rules
do not require an electric utility to offer level and average payment plans.
Furthermore, they noted that the electric utility may require a deposit from
a customer participating in a level-billing plan and that the deposit may
take level-billing plans out of reach for consumers unable to afford the deposit.
Consumer Commenters stated that they were seeking a solution for customers
likely to be disconnected, and for customers who may need extra time to pay
off high bills caused by a weather emergency. Therefore, Consumer Commenters
proposed that all REPs be required to make deferred payment plans available
to all customers in any month during which a weather emergency occurs and
that the emergency rule adopted under Project Number 22869,
Petition of Texas Ratepayers' Organization to Save Energy and Texas Legal
Services Center to Adopt and Emergency Rule to Suspend Disconnection of Electricity
Because of Extreme and Persistent Heat
, provides a workable model that
can be readily modified for inclusion in the adopted rule. Consumer Commenters
proposed that the deferred payment plan establish a minimum payment schedule
to assure continuation of service and that the rule be drafted to assure that:
(1) during high usage months, a customer can only be terminated or disconnected
for failing to make a minimum payment under a deferred payment plan; (2) the
minimum payment should be an amount equivalent to an average monthly bill
based on annual usage; (3) any customer must automatically be offered six
months to pay off delinquent bills and at the customer's request must be given
up to 12 months to pay; and (4) utilities cannot charge a late payment or
penalty if the installments are paid on time or require a security deposit.
Consumer Commenters also recommended the rule specifically state that REPs
and utilities must track weather conditions and report all emergency weather
days to the commission, on a daily basis if necessary, and be required to
educate the commission and the energy service providers assisting its customers
on how to access up to date information on the weather in its service area.
Additionally, Consumer Commenters recommended that the rule specifically require
the REPs and utilities to convey any weather emergency and disconnection ban
status to all employees.
The commission acknowledges that prior emergency rules establishing a moratorium
on the disconnection of electric service have had the adverse impact of increasing
an electric utility's uncollectibles and resulted in significantly higher
rates of disconnections upon expiration of the moratorium period. The commission
also acknowledges that customers experience large increases in their summer
electric bills due to both seasonal rate structures and the need to use more
electricity to maintain a reasonable temperature inside one's home. The commission
further acknowledges that many customers on low, or otherwise fixed, incomes
cannot effectively manage such dramatic increases to their monthly expenses,
and risk having their electric service either terminated or disconnected.
The commission finds that the health and safety of Texas customers should
not be threatened by overly aggressive collection activities of REPs, but
that REPs should have systems in place to help mitigate the effect of high
summer electric bills. The commission adopts several requirements to provide
better opportunities for customers to remain current in their bills, make
payments of a more stable and predictable nature, provide protections from
"extreme weather emergencies" as specified in PURA §39.101(h), and limit
risk exposure to the REP. Specifically, the commission mandates in §25.480(h)
that all REPs offer all customers the option of entering into a levelized
payment program. Additionally, §25.480(g) requires all REPs to implement
bill payment assistance programs to aid customers who express an inability
to pay all or part of their bill. Further §25.482(f) requires REPs to
offer deferred payment plans to all customers for bills that become due during
the extreme weather emergency, and prohibits terminating or disconnecting
a customer for non-payment during an extreme weather emergency. The commission
also adopts a new deposit standard in §25.478(k)(1) that allows a REP
to keep a deposit for the entire period that the REP serves a customer. The
commission expects that when viewed as a whole, these provisions will eliminate
the need, in future years, to adopt an emergency rule. In reference to the
proposal by Consumer Commenters that REPs and utilities be required to track
and report weather conditions to the commission, the commission will form
an implementation working group to develop appropriate reporting procedures.
§25.471, General Provisions of Customer Protection
Rules.
The State of Texas asserted that the basic levels of customer protection
provided for in these rules should be applied to all customers and that any
large commercial or industrial customer who agrees to lesser customer protection
should do so under an express waiver that includes a statement that the customer
is expressly waiving one or more specific customer protections.
Consumer Commenters oppose the "double standard" being set for customers
of affiliate REPs and POLRs versus a lesser set of customer protections for
nonaffiliate REPs and affiliate REPs operating outside their current service
territory. Consumer Commenters stated consumers could focus on price and make
informed, confident decisions if there was only one set of customer protection
standards.
In reply, TEC noted that there is no statutory authority to support comments
that the customer protection rules, or at least a majority of them, should
be applicable to all retail electric customers in Texas. TEC cited PURA §§17.005,
17.006, and 39.101(g), which specifically contemplate various versions of
the customer protection rules be enacted, including those that would be adopted
by municipally owned utilities and electric cooperatives that opt-in to competition.
Additionally, TEC noted that the customer protection rules enacted by electric
cooperatives and municipally owned utilities do not apply to all customers
located within the certificated areas of the electric cooperatives and municipally
owned utilities, but only to those customers who continue to be served by
an electric cooperative or municipally owned utility within its certificated
service area; in all other instances, it noted, the commission's customer
protection rules apply.
MOU Commenters proposed changing the first sentence of §25.471(a)(4)
to clarify the correct applicability of the rules to customers of municipally
owned utilities and electric cooperatives within their service areas. MOU
Commenters also proposed moving and renumbering §25.471(a)(5) as §25.471(a)(6)
and adding a new §25.471(a)(5) to clarify the differing coverage of these
customer protection rules with regard to municipally owned utilities and electric
cooperatives when serving either within or outside their certificated service
areas.
The protections set forth in these rules are primarily intended for residential
and small commercial customers. The commission expects that large commercial
and industrial customers will find it in their interest to have the resources
necessary to negotiate contracts that will provide terms that are most important
to them. The commission notes that the purpose of this subchapter is to provide
minimum standards for customer protection and that nothing herein dilutes
or abridges any other applicable consumer protections. The commission believes
the adopted rules provide strong protections for all customers, while allowing
flexibility to new market entrants and encouraging increased competition.
Customers continue to have the full protections they have had under a traditional
monopoly through the affiliate REP and POLR and may or may not choose an unaffiliate
REP. The commission believes that imposing fewer burdens on new market entrants
will provide greater opportunity for meaningful competition. Nevertheless,
the commission will continue to monitor the market and will make appropriate
changes to these rules in the future in response to behavior by REPs. Finally,
with regard to the application of these customer protection rules to electric
cooperatives and municipally owned utilities, the commission refers to the
discussion in its response to Question 7.
AEP Energy Services commented that the fact that the application of these
customer protection rules to an affiliate REP extends until January 1, 2007,
has potentially unfair and anti-competitive consequences for affiliate REPs.
They proposed changing §25.471(a)(1) to provide that the customer protection
rules for the affiliate REP apply until January 1, 2007 only for those customers
receiving price to beat service.
Reliant recommended that the affiliate REP customer protection rules apply
until the period for the price to beat expires.
The commission believes that the affiliate REP and the offering of the
price to beat serves as a safe harbor until competition fully exists. PURA §39.202
clearly states that the price to beat must be made available until January
1, 2007; consequently, the commission also determines that the safe harbor
customer protections of the affiliate REP must also be available until January
1, 2007.
AEP Energy Services, AEP TDUs, TXU TDU, and Entergy TDU noted that the
effective date of January 1, 2001, in proposed §25.471(a)(3) may cause
confusion when both the existing customer service and protection rules and
the REP customer service and protection rules apply. Parties recommended the
preamble clearly state that after January 1, 2001, the rules do not apply
to electric utilities, and that prior to unbundling, electric utilities will
continue to be governed by the existing customer service and protection rules.
The commission clarifies that these rules apply to REPs. Customers not
participating in the pilot program will continue to be served by the electric
utility until January 1, 2002, and governed by current customer service and
protection rules in Chapter 25, Subchapter B, applicable to electric utilities.
TXU TDU proposed that §25.471(a)(5) be clarified to indicate that
this subchapter is the controlling authority over documents issued to residential
and small commercial customers by a REP. Reliant recommended that §25.471(a)(5)
clarify that the rules of this subchapter govern for residential and small
commercial customers. AEP TDUs and Entergy TDU stated that these proposed
rules govern the relationship between the REP and the retail customer and
should not purport to control over rules governing other relationships.
The State of Texas recommended that language be added to this section to
ensure that all consumer protections otherwise applicable will continue in
effect and will not be impinged upon by these rules.
The commission clarifies that this subchapter governs the interactions
between a REP and a retail customer. The commission further notes that it
has structured the market and these rules are structured based upon the premise
that the REP is the customer's primary point of contact and interaction. The
commission also modifies §25.471(b) to clarify that the purpose of this
subchapter is to provide minimum standards for customer protection and that
nothing herein dilutes or abridges any other applicable consumer protections
provided by state or federal statute.
Comments and discussions regarding §25.471(c) are addressed in Question
2.
TEC recommended adding a definition for "Consumer-Owned Competitive Retailer"
in §25.471(d) to address electric cooperatives and municipally owned
utilities that are essentially equivalent to a REP. MOU Commenters and TEC
proposed changing the definition of "electric service provider" to include
electric cooperatives and municipally owned utilities operating outside their
certificated territory.
As discussed previously, the commission has eliminated the term "electric
service provider" from the rules. Additionally, the commission has incorporated
the term "competitive retailer," as used in Project Number 22187, that addresses
electric cooperatives and municipally owned utilities operating outside of
their certificated areas.
AEP Energy Services argued that relying upon the current definition of
"applicant" in §25.471(d)(1) could create confusion and produce uncertainty
for an individual seeking service from one REP even though he or she may be
the customer of another REP.
The commission agrees that the distinction between the terms "applicant"
and "customer" may be somewhat confusing. Therefore, the commission has eliminated
the term "applicant" from the rules, and has adapted the definition of "customer"
to include both existing and potential customers.
TEC recommended that §25.471(d)(5) and the definition of "disconnection
of service," be changed to include the disconnection of service performed
by an electric cooperative or municipally owned utility.
The commission agrees with TEC and has revised §25.471(d)(5) accordingly.
Reliant, TXU Retail, and TEC recommended the definition of "electric service"
be clarified to indicate that transmission and distribution service and generation
service provided to an end-use customer by a REP are discrete types of electric
service that will not necessarily be provided by a single entity after competition
begins.
The commission agrees with parties and modifies the definition of electric
service in §25.471(d)(7) to indicate that transmission and distribution
services and generation services are discrete.
MOU Commenters and TEC proposed changing the definition of "POLR" to include
a municipally owned utility or an electric cooperative that has been designated
as a POLR.
The commission declines to amend any parameters for selecting a POLR that
were determined by §25.43 (relating to Provider of Last Resort) and therefore
makes no modifications to the definition of POLR.
AEP Energy Services proposed changing the definition "REP" to avoid confusion
and make it consistent with PURA §31.002(17) and §25.5 of this title
(relating to Definitions).
TEC suggested proposed §25.471(d)(8) not include a municipally owned
utility or an electric cooperative selling electric energy at retail inside
its certificated area or the service area of any division of subsidiary. TXU
TDU opposed this proposal and believed that for the purposes of the customer
protection rules a municipally owned utility's or an electric cooperative's
service area should conform to current certificated service areas.
As discussed previously, the commission has added to the §25.5 definition
a single clarifying sentence regarding the status of municipally owned utilities
and electric cooperatives, and believes no further modifications are necessary.
AEP Energy Services commented that it is not clear whether the term "service
provider," is meant to apply to a power generation company, power marketer,
TDU, other providers of goods or services to the REP, or a provider of goods
or services unrelated to the service provided by the REP but nonetheless included
in the bill issued by the REP. TXU TDU commented that a second sentence should
be added to this definition to avoid possible confusion and to clarify that
this definition does not include transmission and distribution utilities.
TEC recommend that this definition be changed to clarify that it pertains
only to the provision of "electric" products and services rather than just
any service or product. Reliant recommended that this definition be deleted
because a review of the proposed rules indicates that all are intended to
apply solely to REPs and not to the broader category of "service providers."
Due to amendments to §25.481, the commission finds the definition
of service provider is no longer necessary and deletes the definition.
TNMP recommended changing the definition of "small commercial customer,"
to limit the demand not to exceed 50 kilowatts during any 12-month period."
The REP Coalition recommended that the demand not exceed 50 kilowatts at a
single customer's premises during any 12-month period.
The commission does not believe that any of these suggested changes improve
the text as written and, therefore, declines to adopt these changes.
TEC recommended the definition of "termination of service" be changed to
include expiration of the agreement or contract related to energy sales. TXU
Retail opposed TEC's proposed use of the word "energy" in the definition,
because it could encompass natural gas as well as electricity and recommended
the word "electric" be used instead, thus referring to cancellation or expiration
of an electric sales agreement. Reliant recommended that this definition be
changed to require notification to the customer and the registration agent
when terminating service.
The expiration of an agreement does not automatically result in a termination
of service as evidenced by §25.475, relating to Information Disclosures
to Residential and Small Commercial Customers. Therefore, the commission declines
to adopt TEC's proposed changes. However, the commission agrees with Reliant
and modifies §25.471(d)(15) to require notification to the customer and
registration agent when termination occurs.
§25.472, Privacy of Customer Information.
TNMP, REP Coalition, Enron, and SPS all agreed that the initial release
of customer information was essential to a vibrant competitive market.
TXU TDU questioned the propriety of the release of utility account numbers
before January 1, 2002, noting that such information is not necessary for
marketing purposes and may present security concerns, because possession of
a valid account number could enable the holder to make changes to a customer's
account and provide access to a customer's confidential credit and payment
histories. Consumer Commenters strongly urged that all of §25.472(a)
be stricken, because they opposed giving REPs access to a mass customer list
with customer name, address, telephone number, historical usage information,
and account number (electric service identifier, ESI) prior to actually enrolling
a particular customer. Consumer Commenters argued that a mass release of customer
information will lead to redlining, and will be used to facilitate price discrimination.
They further argued that the proposed rule is contrary to PURA §39.101(a)(2)
and §39.157(d)(4) provisions on privacy, and to the current code of conduct
rule which classifies usage information as protected, proprietary information,
for which verifiable prior consent must be obtained.
In response to Consumer Commenters, Shell noted that nothing in PURA prohibits
the release of information as contemplated by §25.472(a). Shell argued
that PURA §39.157(d)(4) is clear that the commission has the authority
to determine what constitutes "verifiable authorization" and that similar
opt-out or negative check-off procedures have been adopted by CUBR and expressly
approved for use in Georgia and Pennsylvania in the face of statutes guaranteeing
privacy of customer information. Shell further argued that the Consumer Commenters
ignored §25.272(g)(1)(C), of this title (relating to Code of Conduct
for Electric Utilities and Their Affiliates), which expressly allows the release
of proprietary customer information to affiliate REPs and the POLR "without
authorization of those customers" in order to "facilitate transition to customer
choice." Shell further noted that the information disclosed is limited to
customer name, address, rate classification, usage data, meter type, and account
number. Finally, Shell noted that Consumer Commenters' concern about the misuse
of the information for redlining and other discriminatory purposes is exaggerated
and misplaced. Shell stated it knew of no correlation between a customer's
meter type or monthly usage and his race, creed, color, sex, national origin,
source of income, etc. Shell stated that the more customers a REP has, the
greater its economy of scale or ability to spread its costs among a larger
customer base, regardless of the consumption level of any individual customer.
The State of Texas and Consumer Commenters preferred an "opt-in" provision,
because customers should not be burdened with the responsibility of having
to respond to a mass mailing to prevent the release of their private customer
information. The State of Texas asserted that those interested in being marketed
to will quickly respond and let potential REPs know of their interest in receiving
marketing information. Consumer Commenters argued that the "opt-out" provision
is not verifiable prior consent because it could not be verified that a customer
actually chose not to return the "opt-out" postcard. Consumer Commenters noted
that throughout the rulemaking process in Project Number 20936,
Code of Conduct of Electric Utilities Pursuant to PURA Section 39.157(d)
,
all customer classes were united in support of prior authorization before
customer information, including usage, was released to a REP.
AEP Energy Services opposed the Consumer Commenters' view regarding the
negative check-off option and stated that it does not violate a customer's
reasonable expectation about the privacy of utility account information if
the customer has an option.
The commission finds that the affirmative "opt-out" provision for purposes
of not being included on the mass customer list is not a violation of PURA §39.101(a)(2)
and §39.157(d)(4), or the current code of conduct rules. The commission
agrees with Shell's comments that PURA §39.157(d)(4) is clear that the
commission has the authority to determine what constitutes "verifiable authorization."
The commission finds that the affirmative opt-out provision constitutes verifiable
prior consent pursuant to PURA. The commission believes that it has applied
the safeguards of PURA §39.101(a)(2) and §39.157(d)(4) in §25.472(b)
to apply after the initial release of the mass customer list and that the
release of such a list will help develop a robust, competitive market. The
commission disagrees with TXU TDU's suggestion that a customer's utility account
number not be included as part of the information included on each customer
in the mass customer list.
REP Coalition, Enron, and SPS stated that §25.472(a)(1) should authorize
the electric utility or the TDU, but not the registration agent, to release
mass customer lists to REPs and aggregators. They asserted that the registration
agent should not be required to perform this function because its database
would not have the necessary information that REPs need for marketing efforts.
Shell noted that the burden of supplying this information will be minimal
because utilities are retaining their meter reading role and will, therefore,
collect usage information for residential and small commercial customers in
the ordinary course of business. AEP TDUs suggested that this function be
performed by entities that possess the information necessary to conduct the
mailing and to establish the "Do Not Call List"--either the commission call
center or the ERCOT registration agent. AEP TDUs, however, suggested that
the registration agent should be responsible for the development and maintenance
of the "Do Not Call List."
TXU TDU noted it is not sure that TDUs will be a viable source of the information
required on an ongoing basis by §25.472. TXU TDU referenced Project Number
22187, where investor-owned utilities (IOUs) have suggested that the TDUs
receive retail customer information of the nature contemplated by this provision
from REPs on a regular basis to assist with outage service restoration but
the independent retailers have vigorously objected to the IOUs' suggestion.
TXU TDU and AEP TDUs stated that after January 1, 2002, the TDUs will simply
not have the information enumerated in §25.472(a)(1) for annual mass
release and that REPs will be the primary point of contact with retail customers,
and thus the primary source of information about those customers. TXU TDU
and AEP TDUs further commented that the costs to those required to prepare
and distribute these mass customer lists should be paid through the system
benefit fund because it falls within the scope of customer education.
Entergy TDU stated that it is willing to accept the commission's mandate
to be the designated party to produce the initial mass customer lists, including
12 month history, as recommended by the REP Coalition and is also willing
to continue the process on an annual basis. It further stated that the commission
should direct REPs to assist the TDUs and electric utilities in ongoing maintenance
of accurate mass customer lists for the respective wires service area. AEP
TDUs suggested that the initial mass mailing list be accomplished through
bill inserts.
The commission finds that electric utilities are in the best position to
provide the initial mass customer list, because they will possess the necessary
information. The commission disagrees that an electric utility may charge
for the list and may not recover these costs from the system benefit fund.
TNMP, REP Coalition, and SPS noted the date for release should be changed
to September 1, 2001, to better coordinate with the commission's customer
education program and to provide the most current information available. Shell
stated it saw no reason to delay release of this admittedly "essential" information
beyond February 15, 2001, the date residential class sign-up starts for the
pilot projects; pilot project participants should be given a meaningful opportunity
to evaluate mass customer information in designing products and services to
be offered in the competitive market. AEP TDUs stated that if the TDU is required
to prepare and disseminate the mass customer list, this should occur only
once, and that should be in 2001 because after December 31, 2001, the TDU
will not have access to the requisite customer information.
The commission agrees with the REP Coalition that for such a list to be
effective, it should be released by September 1, 2001. While the commission
appreciates Shell's desire to have such a list for use with the pilot project,
the commission does not believe such a list is necessary to reach the required
5.0% participation goal.
TNMP, REP Coalition, and SPS asserted that such information should be restricted
to a one time release by the TDU. TXU Retail recommended deleting the annual
release of a mass customer list because it doubts whether a negative check-off
option for the release of confidential information satisfies the requirements
of PURA, and because it believes there will be no single entity with all the
necessary information to make the list. If thought necessary by the commission,
however, TXU Retail stated that it would support a one-time affirmative authorization
by customers for release of their confidential information to REPs. Enron
disagreed and stated that REPs should have information for large customers
well in advance of the pilot program and on an ongoing basis, and that customer
information for all classes of customers should be available no later than
March 2001 and annually thereafter. Shell recommended that the mass customer
information be made available during the five years of the price to beat period
after which the commission could decide whether there remains a continued
market need for the data.
The commission determines that the mass customer list shall be released
annually and modifies the rule accordingly.
AEP TDUs stated that should TDUs be chosen to conduct the mass customer
mailing, the most cost-effective manner to accomplish this would be via a
bill insert in the July 2001 billings under the following conditions: the
materials included in the insert should be developed and provided by the commission's
designated customer education agent; and the mass-mailing post card should
provide notice of the release of customer information in the mass customer
list and provide the customer with an opportunity to be excluded from that
list. Regarding the separate Do Not Call List, the customer should be provided
with the option of being contacted by the registration agent or the commission's
call center on how to be included in the Do Not Call List, rather than being
placed on the Do Not Call List. The registration agent would know that the
customer desires information on the Do Not Call List by receiving the customer's
post card.
The commission believes that for the initial list, an insert in the electric
utility's bill is the best method informing the customer about the development
of the mass customer list and the customer's choice not to be included on
that list, as well as the customer's option to be included on the Do Not Call
List. The commission will develop an acceptable format for this list. With
regard to the separate Do Not Call List, the commission agrees that the registration
agent should be responsible for the development and maintenance of the Do
Not Call List and that because of the associated costs of being placed on
the Do Not Call List, the customer should not be placed on the list directly
from his response to the mass mailing. The commission will convene an implementation
working group to resolve issues surrounding the production and distribution
of subsequent lists.
TEC recommended the references to "certified by" and "registered with the
commission" in §25.472(a)(3) be deleted because the term "electric service
provider" is defined to include a "certified" REP and municipally owned utilities
and electric cooperatives which are not required to be certified by the commission.
TEC also argued that aggregators must be registered with the commission but
electric cooperatives and municipally owned utilities may be aggregators in
certain circumstances but are not required to register.
As noted previously, the term electric service provider is no longer used
in these rules; therefore, the commission does not believe the suggested change
clarifies the rule.
With regard to §25.472(b) regarding individual customer information,
TIEC stated that protection of confidential and proprietary information is
not simply an issue of privacy but is an issue of economic harm, which is
threatened by the improper release of competitively sensitive information.
Therefore, TIEC stated, it continues to question why §25.472(b) applies
only to "proprietary" customer information and not also to "confidential"
customer information. It noted that to the extent that these two categories
of information are distinguishable, both need to be specified and protected.
TIEC further noted that the proposed exceptions for release of protected information
are far too broad.
TXU Retail recommended the addition of a new second sentence to confirm
that the proposed rule does not override the provisions of §25.272.
The commission's interest is in protecting customers from the abuses attendant
in the improper release of "proprietary customer information" as defined in §25.272(c)(5).
The commission is not in a position to determine what other information possessed
by a REP or aggregator may be considered "confidential" by the customer. The
commission declines to adopt TXU Retail's suggested language.
TXU TDU stated that §25.472(b)(1) would have the unintended consequence
of prohibiting a REP in the case of an outage, from giving the TDU the affected
customer's name, address and other information required by the TDU to investigate
the outage, without the REP obtaining the customer's verifiable authorization
for the disclosure of such information. It noted that Project Number 22187
addresses the subject of outage reporting and that proposed tariff section
4.11.1, concerning notifications of interruptions, irregularities, and service
repair requests, requires the REP (defined as a competitive retailer in the
tariff) to communicate detailed retail customer information, as specified
in the tariff to the TDU either at the time the outage report is made or in
advance for particular retail customers, depending upon the outage reporting
option selected by the REP. It also noted that the treatment of such information
by the TDU will be subject to the code of conduct information safeguards of §25.272.
It further noted that there are other circumstances under the tariff for retail
delivery service in which retail customer information will need to be communicated
by the REP to the TDU, such as for discretionary services (other than construction
services) which require name, ESI, address, and contact telephone number.
As a result, TXU TDU proposed the addition of a new exception to the release
of proprietary customer information concerning these and similar situations.
In reply, Entergy TDU stated that it shares TXU TDU's concern and that future
TDUs need to receive and maintain accurate retail customer information on
a regular basis to assist in outage restoration. It further stated that a
commission mandate for the TDUs and electric utilities to provide this information
will allow the independent REPs to gain the customer information they need.
In reply, Reliant also stated that it supports TXU Retail's recommendation
that the rules should allow sharing of customer information with third party
contractors that a REP hires for contract services, limited to the information
necessary to perform the contracted functions.
The commission agrees with TXU TDU and Entergy TDU and modifies the language
in §25.472(b)(1).
With regard to the exceptions stated in §25.472(b)(1), Entergy Texas
REP requested that an additional exception be added to permit the release
of information to a service company affiliate or third party contractor that
provides billing and call center operations to the REP. It noted that §25.272(g)(1)
contains a similar exception that allows "utilities" to release customer information
to an affiliate providing corporate support services without obtaining prior
customer authorization.
With regard to §25.472(b)(1)(B), AEP Energy Services, with TXU Retail
proposing very similar language, recommended that this provision be changed
to allow the REP to outsource its duties.
The commission does not agree a change is necessary. While the commission
agrees that some duties may be outsourced, the commission will still hold
the same standards for in-house or outsourced duties.
TIEC stated that debt collection and credit-reporting agencies listed in
subsection (b)(1)(C) have no legitimate reason to have access to trade secrets
and competitive information. Further, TIEC recommended limiting the provision
that allows the REP to release proprietary customer information to the commission
because only relevant information should be released, and only upon proof
that the information is absolutely necessary to the commission's pursuit.
Additionally, TIEC recommended that the provision should mandate that the
information be subject to a protective order in order to protect this data
from disclosure beyond what is absolutely necessary for the commission to
carry out its responsibilities.
In reply, AEP Energy Services, with Entergy Texas REP in substantial agreement,
opposed the Consumer Commenters' proposed wording that individual customer
information be released to credit reporting agencies only if "required" by
state or federal law. It stated that such wording would remove another potential
collection tool from REPs and that a customer may be less inclined to pay
on time or at all once he became aware that his payment practices could not
hurt his credit.
The commission does not believe the suggested changes improve the rule
and declines to adopt either change.
Reliant proposed adding a new second sentence to §25.472(b)(2) to
ensure that REPs will not be limited in their use of commercially available
information that may be duplicative of the information provided by the registration
agent, TDU, or the customer.
The commission does not amend §25.472(b)(2), because this general
principle is already in place and does not need to be addressed in this rulemaking.
AEP Energy Services proposed modifying §25.472(b)(3) to allow a customer's
authorized agent to also be entitled to request this information free of charge
once every 12 months.
Reliant proposed language to recognize that this information is already
available to REPs from either the TDU or registration agent upon submittal
of a customer's ESI for each of the customer's premises. Reliant stated that
REPs should not be forced to provide this duplicative information to other
REPs because doing so would require unnecessary trading partner agreements
and testing of standard electronic transactions among all REPs.
The commission agrees with AEP Energy Services and modifies §25.472(b)(3)
to allow a customer's agent to receive this information at least once annually
free of charge. The commission declines to make the changes recommended by
Reliant and disagrees with Reliant's argument that standard transactions must
occur as a result of the provisions of §25.472(b)(3). This section is
primarily intended to address transmittal of information between a customer's
authorized agent and a REP. This section does not impede nor prohibit any
standard information sharing practices among REPs.
TXU Retail recommended adding the settlement agent to §25.472(b)(6).
The commission declines to make this change as the settlement agent is
associated with the registration agent.
REP Coalition recommended adding a new subsection §25.472(b)(7) so
that REPs would not have to meet the requirements of this section when trying
to establish whether or not a customer can demonstrate satisfactory credit
under §25.478(a)(3)(A).
The commission declines to make this change because credit and payment
information is customer-specific and specifically subject to the requirements
of this section.
MOU Commenters recommended adding a new §25.472(b)(7) to specifically
exempt electric cooperative and municipally owned utilities from these provisions.
The commission disagrees that there is sufficient justification to exempt
electric cooperative and municipally owned utilities from meeting the requirements
of this rule, and declines to make the suggested change.
§25.473, Non-English Language Requirements.
AEP Energy Services proposed revisions in subsections (a) and (b) to ensure
that information would be provided to a customer in a different language based
on that customer's request. The company also proposed adding "customer" in §25.473(a)(1)
and (2) to clarify that the rule referred to customer information. In subsections
(a)(2) and (b)(2), they proposed adding "electric" to the words "services"
and "discounts."
The commission agrees with the change proposed by AEP Energy Services and
amends the rule accordingly.
Consumer Commenters in subsection (a) and (b) deleted the reference to
"customer's designation," effectively changing the subsections to mean that
all REPs and aggregators would have to provide information in English and
Spanish to all customers. In subsection (a)(1), they added disconnection notices
and enrollment notification notices to the list of documents to be provided
to all customers in both languages.
TXU REP, AEP Energy Services, and Entergy Texas REP opposed the proposal
by Consumer Commenters to make information mandatory in both English and Spanish.
All three companies stated that giving customers options on what language
to use would satisfy PURA §39.101(a)(8). A REP marketing to Hispanics,
for example, could market only in Spanish under the current rule language.
AEP Energy Services and Entergy Texas REP pointed out that such a requirement
would increase printing and postage costs with little benefit and, therefore,
the current language should be maintained.
The commission concludes that both REPs and the aggregators should provide
customers with materials in English or Spanish at each customer's designation;
therefore, the commission declines to make the changes specified by Consumer
Commenters. The commission clarifies, however, that a REP, including an affiliate
REP, must solicit from the customer the customer's language preference at
the time the information required by §25.474(b)(2) is provided to the
customer, and must provide the following information and documents in both
English and Spanish: customer rights; termination notices; access to customer
service, including restoration of electric service; and billing inquiries.
A new subsection (c) has been added to reflect this requirement.
§25.474, Selection or Change of Retail Electric
Provider.
Reliant proposed deleting the word "express" from subsection (a), arguing
that it created an inappropriate impression that this type of authorization
was different from a regular "authorization." Consumer Commenters proposed
the deletion of the reference to "subsection (c) of" to ensure that all change
orders are authorized and verified according to all the provisions of this
section.
The commission agrees with the changes offered by Reliant and Consumer
Commenters and revises the rule accordingly.
TNMP, REP Coalition, SPS and TEC all suggested changing the nature of the
document provided to customers in subsection (b)(1) from a selection form
to an information and interest identification form. These parties argued that,
as proposed, the rule contemplated that checking the box next to the name
of a particular REP designated that particular REP as the customer's REP of
choice. Additionally, the parties asserted that checking the box on the form
would not have created a contract between the REP and the customer, since
the customer had not chosen any one of that REP's market products. These parties
stated that almost certainly, the customer would not have had the sort of
detailed information about those options that would permit the customer to
make a reasoned selection. Further, parties stated that it would be doubtful
that the mere act of selecting a REP on the initial ballot would satisfy the
detailed authorization and verification requirements of §25.474(c) and
the REP's terms of service requirements that, in other circumstances, are
a prerequisite for agreement and subsequent enrollment. These parties modified §25.474(b)(1)
to clarify that checking a box would not be a firm commitment on the part
of the customer to take electric service from the selected supplier or on
the part of the REP to serve that customer. These parties also proposed deleting §25.474(b)(1)(B)
for that same reason. Parties proposed language to make it clear that customers
would be able to request that they be contacted and/or provided with additional
information concerning product offerings of a single REP, selected REPs or
all REPs. New Power and Green Mountain both supported REP Coalition's initial
comments and believe REP Coalition's proposed changes addressed both the concerns
of the new market entrants and the consumer representatives. AEP Energy Services
and TEC proposed modifying the language to make it clear that such information
should only be provided to customers who will have choice, not to all customers.
Shell argued that the document should allow customers to select REPs and
encourage the exercise of customer choice. Additionally, Shell argued that
a selection mechanism would reduce the affiliate REP's competitive advantage.
Shell further stated that the rule should use "shall" in subsection (b)(1)
to assure a pro-competitive selection process. The Consumer Commenters observed
that the selection process was a new and innovative idea; but they had concerns
regarding several aspects of the proposed process. Specifically, their concerns
were that the process would be in conflict with the pilot project rule, that
customers would switch with incomplete information from a REP, and that the
process may confuse the purpose of the commission's call center. Enron endorsed
the idea of a selection form and process as proposed by Shell. Additionally,
Enron proposes that additional information be provided on the ballot that
explains to customers what will happen if they "choose not to choose," particularly
non-price to beat customers. Additionally, the Independent Retailers argued
that all customers ineligible for the price to beat should be advised, no
later than May 21, 2001, of the terms, conditions, and rates that will apply
should the customer decide to default to the affiliate REP. The Independent
Retailers further argued that under current schedules, the May 21, 2001 disclosure
date should allow the affiliate REP to review interim orders in the unbundled
cost of service cases (those being conducted pursuant to PURA §39.201),
and additionally allow customers to review terms before commencement of the
pilot project. REP Coalition stated that the informational materials should
be distributed to customers "not later than September 1, 2001." Additionally,
Shell proposed new subsection (b)(4) and (b)(5) that specified how customers
would be advised of the specific terms of service requirements that would
be applicable and allow the designated provider to refuse service to any customer
not meeting those requirements. Shell also proposed the addition of new subsection
(b)(6) that would grant a REP the right to elect not to have its name included
on the list of REPs that customers could select as the provider of choice.
AEP Energy Services did not support the changes proposed by Shell, arguing
it would exempt the chosen REPs from the requirements for customer authorization
and verification for the initial selection process. Consumer Commenters proposed
new subsection (b)(1)(B) that would require the informational materials to
list a toll-free number for each REP and contain a table of comparative price
offerings for each REP. AEP Energy Services opposed the change to (b)(1)(B)
suggested by Consumer Commenters, stating it would be impractical and would
encourage customers to focus solely on prices when other aspects of service
may be just as important.
The State of Texas commented that proposed subsection (b)(1)(D) seems to
suggest that a fee will be charged for placement on the Do Not Call List and
that the amount of such fee is not disclosed elsewhere in the proposed rules.
The State of Texas argued that no such fee should be charged for placement
on the Do Not Call List as it would potentially reduce customer subscribership.
TNMP and REP Coalition proposed modifying subsection (b)(1)(E). TNMP proposed
that the postage-paid information/interest card should be addressed to the
commission. REP Coalition proposed leaving the card addressed to the registration
agent, but added a requirement that the registration agent electronically
provide the name, address and telephone number of customers who selected the
REP within five days of receiving the post card. Shell proposed new subsection
(b)(3) that contains essentially the same requirements as those proposed by
REP Coalition's change to (b)(1)(E). TEC proposed deleting subsection (b)(1)(E).
Consumer Commenters argued that the proposed §25.474(b)(2) would cause
customer confusion by giving the appearance that the customer has been intentionally
reassigned to another provider when the customer's account is maintained by
the recently separated affiliate REP. Consumer Commenters argued that it would
be more simple and straightforward to require the integrated utility to inform
the customer of its change to the affiliate REP and how such change may affect
the customer's service (phone numbers to call to report problems, etc.). Further
Consumer Commenters stated that instead of a terms of service agreement, the
affiliate REP should be required to send the customer an explanation of the
price to beat the customer will begin to pay, an electricity facts label for
the price to beat, information about the customer's right to switch, and the
availability of the price to beat in the competitive market. Consumer Commenters
saw no rationale for sending the customer a terms of service agreement or
to change the terms and conditions of the customer's service. Entergy Texas
REP argued that Consumer Commenters' proposed changes were not necessary since
the affiliate REP's terms of service document and Electricity Facts label
would naturally include information on the price to beat during the freeze
period. AEP Energy Services supported Consumer Commenters' proposed change
to (b)(2), but would include a provision that would allow providing the required
information to non-switching customers at the time the affiliate REP mails
the first bill after competition has commenced. Reliant proposed additional
language to subsection (b)(2)(C) that would clarify that an Electricity Facts
label must be provided in a separate document unless the label was contained
in the terms of service statement. Since the provision of the terms of service
statement is required by subsection (b)(2)(A), the proposed language sought
to reduce duplicative information from being provided to the customer. MOU
Commenters argued that the provisions of subsection (b) were not required
by Senate Bill 7, were not consistent with the objectives of the statute,
and therefore contained no basis for regulatory solicitation of customers
to choose an electric supplier. MOU Commenters argued that subsection (b)
and its related subsequent provisions should be deleted from the rule.
The commission agrees that the initial REP selection process should be
revised to eliminate the ability of customers to make a binding selection
of a REP on the information form. The commission agrees that the information
should only be provided to customers who will have the ability to exercise
choice on January 1, 2002 and revises language in subsection (b)(1) accordingly.
The commission further agrees that the adopted process should be mandatory
and agrees that it would be most beneficial to customers if such information
was required to be provided no later than September 1, 2001. However, because
the commission expects to provide this information as part of its customer
education campaign, the language is modified to reflect that the distribution
timeline will be determined as part of that campaign. The information form
can serve as a mechanism for a customer to express interest in a particular
REP, but such a selection cannot be binding on either the customer or the
REP until the REP has fully complied with the verification requirements of §25.474.
The commission adds new subsection (b)(1)(A) to clarify that the information
and selection form should contain an explanation of retail electric competition.
The commission clarifies that §25.474(b)(1)(B) is intended to allow
a specific REP to provide a customer with information in response to the customer's
designation of that REP on the selection form. However, the commission declines
to incorporate Shell's proposed new subsection (b)(4)-(6) to accomplish this
purpose. While the commission agrees with Consumer Commenters that any information
provided to consumers to help educate them on the choices available to them
is desirable, the commission declines to adopt new subsection (b)(1)(B). The
commission prefers, instead, to consider such requirements in conjunction
with the development of the customer education campaign. The commission acknowledges
the concerns expressed by the State of Texas with respect to the fee for being
placed on the Do Not Call List. It is not the intent this rule to specify
the amount of such fee, merely to require that if such a fee is to be assessed,
that it be disclosed in this information card. As a result, no change is made
to the subsection, now (b)(1)(E); §25.484, which covers the Do Not Call
List, discusses the assessment of such a fee. The commission modifies the
relevant subsection, now (b)(1)(F), to reflect that the information card will
direct the customer to return the form to the commission for processing by
the contractor selected by the commission to perform customer education fulfillment
functions. Therefore, the commission declines to adopt REP Coalition's suggested
language for subsection (b)(1)(F). The commission also declines to delete
subsection (b)(1)(F), because the provision of unbiased information to customers
concerning the selection process and specific REPs is critical to the development
of a fully functioning competitive market.
The commission holds that PURA does not prohibit the commission from adopting
mechanisms that allow customers to indicate their interest in receiving information
from the REPs of their choice in advance of retail competition. Further, the
commission believes that such a process empowers customers, which is integral
to the customer education campaign. As a result, it declines to delete subsection
(b). The commission agrees with Consumer Commenters that the proposed rule
language in subsection (b)(2) may lead to customer confusion regarding the
role of the affiliate REP. Therefore, the commission amends subsection (b)(2)
to require the affiliate REP to inform the customer of its change from the
integrated utility to the affiliate REP and how this change may affect the
customer. The commission also agrees with AEP Energy Services that information
for price to beat customers required by subsection (b)(2) may be provided
with the first bill sent by the affiliate REP. The commission finds that subsection
(b)(2)(C) would benefit from the changes recommended by Reliant and adopts
Reliant's suggested language. Additionally, the commission agrees with the
arguments presented by the Independent Retailers and adopts new subsection
(b)(3) that addresses the disclosures required for non-price to beat customers
that will be served by the affiliate REP.
TNMP and REP Coalition stated that subsection (c) should be amended to
clarify that the authorization and verification requirements should only apply
to REPs, not all service providers, and only to electric services offered
by the REP, not all other unrelated products or services. These parties argued
that this section only addressed the selection and switching of a customer's
REP, and as such, the only entities that perform such functions are the REPs.
Additionally, the parties argued that the commission has no authority to regulate
services that are not related to electricity. The parties went on to state
that REPs in the market may choose to offer products and services that are
unrelated to electric service and over which the commission has no jurisdiction.
TXU Retail also stated that subsection (c)(2) should be amended to allow REPs
to verify only a random sample of authorizations that are received by means
of telephone conversations. TXU Retail argued that requiring either independent
third party or audio self-recorded verification of every telephone authorization
would be extremely expensive, especially if change orders are not excluded
from this requirement, as recommended by REP Coalition. TXU Retail further
argued that the more expensive the authorization and verification process
becomes, the more difficult it will be for new entrants to survive and compete
in the marketplace. Consumer Commenters proposed new subsection (c)(4) that
specified requirements of a marketing agent employed by a REP. Specifically,
the proposed new subsection would have required the marketer to clearly inform
the customer of the marketer's name, affiliation with the REP, and any payments
the marketer receives from the REP for obtaining the customer's authorization.
Entergy Texas REP and AEP Energy Services opposed the language presented by
Consumer Commenters, stating it would not provide any practical information
to the customer. AEP Energy Services proposed modifying subsection (c)(4)
so as to not unnecessarily restrict who can change a REP. AEP Energy Services
argued that the proposed rule would prevent a spouse whose name is not on
the bill from authorizing a change in provider. MOU Commenters, TEC, and Consumer
Commenters all proposed changes to subsection (c)(5). MOU Commenters and TEC
argued that subsection (c)(5) should be modified to reflect that this provision
is not applicable to municipalities or cooperatives. Specifically, MOU Commenters
argued that the reporting requirements of this subsection are not authorized
as to municipally owned utilities, whether or not they opt-in, because of
PURA §40.004(7), which limits the authority of the commission to require
reports from municipally owned utilities to specific areas not explicitly
addressed in the statute. TEC made similar arguments regarding electric cooperatives,
citing PURA §41.004(5). Consumer Commenters proposed changing the frequency
of reporting requirements from "upon request" to "annually." Consumer Commenters
argued that this change would enhance the commission's ability to respond
to customer questions and complaints.
The commission clarifies that the purpose of this section is to establish
procedures for the orderly switching of a customer's REP and to have a customer's
selection of such chosen REP honored. Accordingly, the commission agrees with
REP Coalition and TNMP that subsection (c) applies only to REPs and amends
this subsection to reflect that understanding. However, the commission disagrees
with REP Coalition and TXU Retail that such rules apply only to the provision
of electric service to the exclusion of other services offered by the REP
and included on the REP's bill to the customer. PURA §17.151 clearly
delineates the commission's authority to establish requirements for the submission
of charges that will appear on a customer's electric bill. Specifically, PURA §17.151(a)
states that such charges may only be submitted if the service provider offering
the product or service has thoroughly informed the customer of the product
or service being offered, including all associated charges, and has explicitly
informed the customer that the associated charges will appear on the customer's
electric bill and the customer has clearly and explicitly consented to obtain
the product or service offered and to have the charges appear on the customer's
electric bill. PURA further specifies the acceptable methods for such verification.
However, many of these provisions relate to services offered to an existing
customer and therefore belong more appropriately in proposed §25.481,
which deals with protections for unauthorized charges. Accordingly, the commission
amends subsection (c) to reflect this distinction, while §25.481 is amended
to properly reflect the authorization and verifications that all REPs must
follow when submitting charges to a customer via the customer's electric bill.
With the changes to both this section and §25.481, the commission declines
to adopt TXU Retail's proposal that only a random sample of orders affecting
the customer's electric bill be authorized and verified. The commission recognizes
that requiring every transaction to be authorized and verified consistent
with the provisions of this section and §25.481 may increase costs to
the REPs. However, the commission's experience in the telecommunications industry
indicates that it is crucial to foster consumer confidence in the newly competitive
electric market by ensuring that every customer's electric bill contains only
charges authorized by that customer. The commission appreciates Consumer Commenters
proposal to add new subsection (c)(4). However, any entity performing functions
for the REP must do so in compliance with any rules applicable to a REP performing
those same functions. Further, the commission believes it is the responsibility
of the REP to ensure that such entities are, in fact, complying with all rules
that would otherwise apply to the REP, since the commission will ultimately
hold the REP responsible for compliance. Thus, no addition is made. The commission
agrees with AEP Energy Services' recommendation to broaden the language in
subsection (c)(4). Specifically, the commission clarifies that other individuals
may be authorized to make changes on or to the electric service account if
such person has been designated as, or would be legally presumed to be, an
authorized person by the customer of record. The commission agrees with the
arguments presented by MOU Commenters and TEC and modifies subsection (c)(5)
so that it does not apply to municipally owned utilities or electric cooperatives.
The commission declines to adopt Consumer Commenters' proposal to modify the
reporting frequency specified by subsection (c)(5). The commission's experience
in the telecommunications industry has proven that this information is easily
obtained upon request by the commission.
Reliant and Entergy Texas REP proposed revisions to subsection (d)(3).
Reliant suggested giving the REPs the flexibility to state the pricing disclosures
as a dollars and cents per time period (month, year, etc.) as an alternative
to the proposed cents per kilowatt-hour. Reliant argued that this change was
needed to preserve the REP's ability to offer flexible pricing options. They
suggested that the pricing terms need to permit disclosures as a price per
kWh, a single monthly fee ($ per month), fee for peak demand ($ per kW) or
a price combination of any of these three. Similar to this, Entergy Texas
REP proposed modifying this section to allow other price disclosures in addition
to the required price per kWh. In addition to stating whether the potential
customer would be required to pay a deposit and informing them of the amount
of such deposit, Consumer Commenters proposed a revision to subsection (d)(6)
that would require the REP to provide an explanation of the commission's standard
deposit requirements. AEP Energy Services did not support this change, arguing
that these disclosures are not part of the key rates and terms that should
be specifically authorized and verified. Consumer Commenters also proposed
a revision to subsection (d)(8) to clarify the specific information that would
be provided to customers regarding their right of rescission. Consumer Commenters
also proposed a new subsection (d)(9) requiring REPs to advise potential customers
of the policy regarding hold times for customer service calls. TXU Retail,
Entergy Texas REP, and AEP Energy Services all disagreed with the necessity
to develop and disclose a policy related to customer hold times.
The commission agrees with Entergy Texas REP and Reliant that other price
disclosures, in addition to the required total cents per kilowatt-hour, may
be helpful to consumers and revises subsection (d)(3) accordingly. The commission
disagrees with Consumer Commenters' proposed revision to subsection (d)(6)
and declines to incorporate such language. The purpose of this subsection
is for the REP to clearly disclose its specific offer to the customer, including
any deposits it is requiring the customer to pay. However, the commission
does agree with the suggested revision to subsection (d)(8) and has incorporated
those changes. The commission appreciates the intention behind Consumer Commenters'
proposed addition of subsection (d)(9), but does not believe that such a policy
disclosure would give consumers useful information at the time such disclosure
is provided. However, pursuant to PURA §39.101(e), the commission is
authorized to develop minimum quality of service standards and reserves the
right to do so should the need arise.
Consumer Commenters argued that the written authorization and verification
in subsection (f)(1) should be consistent with those in §26.130 of this
title (relating to Selection of Telecommunications Utilities), particularly
those provisions relating to the "letter of agency." As a result, Consumer
Commenters proposed new language to incorporate specific letter of agency
requirements and recommended deleting the proposed subsection (f)(1). Entergy
Texas REP and TXU Retail disagreed with the proposal to add more specific
letter of agency language. These parties argued that such detailed information
on a check is unnecessary to accomplish the goal of this rule, which is to
ensure that a customer understands that the decision to accept the check payment
functions as an election to change providers. Additionally, Consumer Commenters
proposed adopting a definition of "in writing" to mean "written words memorialized
on paper or sent electronically." The State of Texas disagreed with provisions
of subsection (f)(1)(A) that allow the use of a check as a means of authorization
or verification. The State of Texas argued that the use of a check for such
purposes too easily leads to misunderstanding of the check's purpose in authorizing
the provision of electric service. Reliant argued that subsection (f)(1)(B)
should be amended to clarify the effect of a customer's signature on the contract
or terms of service document. TNMP and REP Coalition suggested amending subsection
(f)(2) and (f)(2)(A) to eliminate the requirement for independent third party
verification of telephonic enrollments. Parties also proposed revising the
remaining language so that only the authorization portion of the telephone
call is audio recorded. Parties argued that requiring that all authorizations,
including those for initial enrollment and for subsequent service change orders,
be taped and verified by an independent third party would add substantial
costs to a market already anticipated to have very low margins. Parties recommended
that this section be modified to be consistent with CUBR such that REPs "must
either audio record or third party verify (via either a live operator or interactive
voice response (IVR))." Parties further argued that REPs should have an option
to decide the most efficient means to document a customer's authorization
and verification of telephonic enrollments for electric service. Additionally
they argued that verification should not be required for service changes that
are requested after a customer is enrolled with a REP. Consumer Commenters
replied that the industry proposals would water down controls that would prevent
unscrupulous REPs from slamming and cramming. TXU Retail proposed changing
(f)(2)(A) to eliminate the need to verify change orders after the customer
initially enrolls. Consumer Commenters proposed modifying subsection (f)(3)
to clarify that REPs that enroll customers via the Internet should comply
with subsection (c) regarding general standards for authorizations and verifications
and subsection (e) regarding verification requirements. TNMP and REP Coalition
proposed a revision to subsection (f)(3)(A) that clarifies how the commission
is provided with the address of the REP's Internet website. Their proposed
language also removed the requirement that the REP maintain the website address
provided to the commission. AEP TDUs proposed a revision to subsection (f)(3)(E).
As proposed, this section would have required the REP to provide a customer
with a toll-free telephone number, Internet website address, and email address
for contacting the REP throughout the duration of the customer's agreement.
AEP TDUs argued that in Project Number 22187, REPs are given the option of
requiring their customers to contact the TDU directly to report and inquire
about outages. AEP TDUs suggested that this section be modified to require
the REP choosing that option to provide the customer with the TDU's toll-free
telephone number for reporting and inquiring about outages. Consumer Commenters
proposed a revision to subsection (f)(4)(A), requiring door-to-door sales
to comply with the authorization and verification standards in subsections
(c), (d), and (e), as well as the letter of agency requirements proposed by
Consumer Commenters as new subsection (f)(1). TNMP, REP Coalition, and Entergy
Texas REP all proposed revisions to subsection (f)(4)(D). TNMP proposed deleting
language that regulated the clothing and sales presentation of the REP. REP
Coalition suggested deleting the affiliate REP from the list of entities (i.e.,
TDU, affiliate REP, and POLR) that the REPs should not be able to represent
themselves as. Similarly, Entergy Texas REP recommended that the POLR also
be excluded from this list, arguing that it makes no sense if the REP is either
the affiliate REP or the POLR. AEP Energy Services proposed amending subsection
(f)(5)(A) to include the words "and verification" so that it is clear that
electronic enrollment must comply with both authorization and verification
standards. Consumer Commenters suggested requiring a customer call be made
from the telephone at the service address, arguing that only this telephone
number would provide the automatic number identification which verifies that
the call is made from the expected residence, which is the one where the switch
would be made. Consumer Commenters argued that if the telephone call is not
required to be placed from the switching location, the automatic number identification
is useless and slamming will ensue.
The commission adds clarifying language to subsection (f) to reflect that
authorization and verifications can be obtained by using any one of the methods
listed in subsection (f). The commission agrees that subsection (f)(1) should
include specific provisions from §26.130 (relating to Selection of Telecommunications
Utilities) and that all written authorizations should include letter of agency
language. The commission also agrees that the definition of "in writing" should
be included in §25.471 to prevent any confusion. The commission agrees
with the State of Texas that the use of checks as a letter of agency instrument
has confused customers in the telecommunications industry and resulted in
many switches of service providers that were not intended by consumers. The
commission therefore eliminates the use of a check as a valid letter of agency
instrument for the purpose of switching a consumer's REP and revises subsection
(f)(1) accordingly. The commission agrees with and incorporates Reliant's
proposed change to proposed subsection (f)(1)(B), now subsection (f)(1)(E).
The commission understands parties' concerns about the cost of using independent
third parties to verify telephone enrollment orders, both initial and change.
The commission agrees to allow the use of an audio recording to capture a
customer's authorization and verification as an alternative to independent
third party verification and modifies subsection (f)(2) accordingly.
The commission amends subsection (f)(3) as suggested by Consumer Commenters.
The commission's existing REP certification form does not ask for the address
for the REP's Internet website, so the commission modifies subsection (f)(3)
to require REPs to file such information with the commission in a manner prescribed
by the commission. The commission maintains the requirement that the REP must
maintain the Internet website at the address that is disclosed to the commission.
Customers who enroll and do business electronically with REPs via the Internet
must be assured that the REP will be locatable at the Internet address provided
to the customer at enrollment. The commission agrees with AEP TDUs proposed
revision to (f)(3)(E) and Reliant's revision to (f)(3)(F) and revises the
language in each subparagraph. The commission also agrees with Consumer Commenters'
revisions to (f)(4)(A) that would require door-to-door enrollments to comply
with general authorization and verification requirements, as well as those
for written authorizations and revises the rule to reflect this change.
The commission agrees with REP Coalition and disagrees with the other parties'
proposed changes to (f)(4)(D). The commission's intent is to discourage any
REP from representing itself in a manner that is meant to mislead or confuse
customers into believing it is one of the listed entities. Both the TDU and
the POLR have specific obligations in the competitive market and consumers
should not be misled by a REP trying to misrepresent itself as one of these
entities. The commission revises (f)(4)(D) accordingly. The commission deletes
proposed (f)(5), thereby removing electronic authorizations as an acceptable
method of customer enrollment and authorization. The commission believes such
a mechanism was more appropriate in the telecommunications industry when a
customer was calling from the telephone number that was affected by the switch
order.
Reliant suggested additional language to clarify the date from when a record
of authorization and verification must be kept. Consumer Commenters suggested
changing the language to require REPs to provide the authorization and verification
to the customer or the commission upon request, rather than only when the
customer challenges the switch.
The commission agrees with both changes and revises subsection (g) as appropriate.
Reliant, AEP TDUs and Consumer Commenters all proposed changes to subsection
(h). Reliant suggested clarifying the number of days a customer has to exercise
the right of rescission from "three business days" to "three federal business
days, as defined in 16 C.F.R. §429.0(f)," to make the right of rescission
time periods the same under both federal and state law. Additionally, Reliant
and AEP TDUs suggested changing from four business days to three calendar
days the number of days a REP may assume it takes a customer to receive a
terms of service document after it has been placed in the U.S. mail. Reliant
argued that the "three day" standard is recognized by the Texas Rules of Civil
Procedure for filings by U.S. mail delivery. AEP TDUs argued that this change
would make it consistent with the timeframes being considered in Project Number
22187. Consumer Commenters proposed additional language that would allow customers
to assume that any cancellation document is presumed to be received timely
by the REP if it is deposited in first class U.S. mail within three business
days after the customer's receipt of the terms of service document. TXU Retail
and AEP Energy Services disagreed with Consumer Commenters' proposed change,
because it would seem to require an additional timeframe to elapse prior to
submitting a switch order.
The commission agrees with many of the proposed revisions to subsection
(h) and modifies the language accordingly. While the commission appreciates
Reliant and AEP TDU's efforts to ensure consistency with other standards,
the customer's right of rescission should not be unnecessarily shortened due
to the fact that the U.S. mail is not delivered on Sundays or holidays. However,
the commission agrees with Reliant that the cancellation period does last
for three federal business days. With respect to Consumer Commenters' proposal,
the commission anticipates that if a customer mails a cancellation notice
back to a REP, the postmark on such notice could be used to judge the timeliness
of such response by the consumer. The commission also modifies this section
to clarify that REPs receiving late notices of cancellation should contact
the registration agent and cancel the pending switch.
TNMP and REP Coalition both proposed changes to subsection (i) to incorporate
the concept of "federal business days," as mentioned in the comments for subsection
(h). Additionally, both parties suggested linking the start of the right of
cancellation period to the customer's receipt of the terms of service document,
instead of establishing a fixed number of days based on the terms of service
being delivered via U.S. mail. REP Coalition also proposed new subsection
(i)(2), which established an expedited switch or reconnect process, as part
of its argument for allowing all REPs the right to disconnect customers for
non-payment of delinquent accounts. The proposed section established specific
terms that must be agreed to by both the REP and the customer in order for
the expedited request to be processed by the registration agent. TXU TDU and
Entergy TDU both objected to REP Coalition's proposed new (i)(2)(F) concerning
the payment of associated TDU discretionary service charges for expedited
switches or reconnects. REP Coalition suggested that, if an expedited switch
or reconnect occurred within two business days of disconnect for non-payment,
"then the discretionary service fee for the switch or reconnect of service
shall be the lowest fee for such service, as applicable." TXU TDU and Entergy
TDU argued that this language should not be accepted, because it would have
a TDU charge for a service in a manner that is contrary to the TDU's commission-approved
rate schedules. If a TDU had an approved discretionary service charge for
a switch and a different approved discretionary service charge for a reconnect,
then it can only lawfully bill for the service it actually provides--either
the switch or the reconnect. It cannot provide one service, but bill for it
under a different rate schedule as if it had provided some other service.
The commission incorporates the "federal" business days standard in subsection
(h) as suggested by TNMP and REP Coalition. The commission also clarifies
that the right of cancellation time period begins when the customer receives
the terms of service document and that the customer has three federal business
days from the date the terms of service is received to cancel the contract
without penalty. The commission clarifies that the purpose of this section
is to specify the number of days the customer has to cancel a contract, if
the customer wishes to do so without incurring any penalties. These clarifications
are reflected in the commission's changes to subsection (h). Since the physical
disconnection of electric service for non-payment is an option available only
to the POLR, the commission does not believe it is necessary to adopt an expedited
switch or reconnect process. However, the commission modifies the rule to
clarify that REPs may submit a customer's enrollment or switch request to
the registration agent, prior to the expiration of the customer's right of
cancellation. The commission expects that REPs can develop appropriate business
practices that will mitigate risk, while providing service on a more expedited
basis to customers requesting such expedited service. In addition, the commission
requests that the REPs and TDUs review the switching process and related timelines
and attempt to work out a system for use of estimations between meter readings
to shorten customer account transfer times and reduce customer confusion caused
by receipt of multiple bills. The commission requests a report on this process
by March 15, 2001 as part of the electric restructuring transition implementation
project. Given this change, the commission disagrees there is a need for an
expedited process at this time, but reserves the right to open a rulemaking
in the future should such a need become apparent. As discussed in Project
Number 22187, the commission determines that REPs have the obligation for
identifying whether they are serving "special needs" customers and advising
the registration agent of the presence of such customers, so that this information
is ultimately available to the appropriate TDU.
Consumer Commenters proposed additional language to subsection (j) that
would require the registration agent to provide the notice to customers anytime
a customer's REP is changed. TNMP and REP Coalition both proposed changes
to subsection (j)(2) to clarify the purpose of the notice sent by the registration
agent to the customer in response to a switch request from a REP. The parties
suggested changing the intent of the notice from "a second chance to cancel"
to "correcting an incorrect change order." Consumer Commenters amended proposed
(j)(2)(E) to require the notice to contain the "slamming advisory" in English
and Spanish and to streamline information about how customers shall be advised
to report instances of slamming. AEP Energy Services, Entergy Texas REP, and
TXU Retail disagreed with the need for a slamming advisory, and TXU Retail
specifically disagreed that this advisory should offer promises of compensation,
since this may encourage customers to fake slamming reports. Consumer Commenters
proposed deleting subsection (j)(2)(F), which required the notice to contain
a toll-free number and statement in Spanish advising customers that the information
in the notice could be obtained in Spanish by calling the advertised telephone
number. Alternatively, Consumer Commenters argued that if the proposed change
to subsection (j)(2)(E) is accepted, this subsection is not needed. Entergy
Texas REP argued that Consumer Commenters' suggested changes to proposed (j)(2)(E)
and (F) are unnecessary and should be rejected. They argued that providing
statements in both English and Spanish would add needless costs and impose
additional burdens on REPs.
TNMP, REP Coalition, TXU TDU, Reliant, and Consumer Commenters all proposed
revisions to subsection (j)(3). REP Coalition proposed language that clarified
that the TDU should have one day to act on the switch request, that the customer
and the REP could agree to a specific switch date, and that the switch request
is valid unless the customer informs the registration agent that the switch
is incorrect. REP Coalition also added language consistent with its proposed
new subsection (j)(2) on expedited requests. TXU TDU proposed language that
ensures consistency with the Tariff for Retail Delivery Service being developed
in Project Number 22187. TXU TDU also acknowledged that switch requests could
happen at times other than the normal meter read cycle. Reliant proposed amending
subsection (j)(3) to make it clear that the registration agent should "direct
the TDU" to implement the switch to avoid any confusion about the entity that
actually performs the switch. Similar to the idea presented by REP Coalition
and TXU TDU, Consumer Commenters suggested amending (j)(3) to reflect that
the customer could request a special meter reading to effectuate a switch
on a specific date.
The commission amends subsection (j) to require the registration agent
to provide the notification of switch to a customer anytime that customer's
REP is switched and adopts new paragraphs (2)(A) and (2)(B) to distinguish
between standard switch requests and requests to switch a customer to the
POLR. The commission also agrees with the proposed changes recommended by
TNMP and REP Coalition and amends subsection (j)(2) accordingly. The commission
disagrees with Consumer Commenters' proposed revision to subsection (j)(2)(E)
and the deletion of subsection (j)(2)(F). The commission does not believe
the "slamming advisory" is necessary on this notice, since the customer will
receive this notice prior to a slam actually occurring and deletes proposed
(j)(2)(E). Additionally, the commission acknowledges the concerns raised by
other parties, this notification may be the only information the customer
receives if the switch is unauthorized. Given its critical importance, it
is imperative that both English and Spanish speaking customers have the maximum
amount of time to cancel such unauthorized switch orders. The commission agrees
with REP Coalition's proposal for subsection (j)(3) to allow the TDU one day
to act on the switch request provided by the registration agent. The commission
also agrees with all parties that the language in subsection (j)(3) should
allow a switch to happen on a specific date, not just at the next meter read,
and that such language should ensure consistency with the Tariff for Retail
Delivery Service. The commission also incorporates Reliant's suggestion to
make it clear that the registration agent directs the TDU to perform the switch.
The commission disagrees that there is a need for an expedited process at
this time, but reserves the right to open a rulemaking in the future should
such a need become more obvious.
The State of Texas proposed additional language to subsection (k) to clarify
that although the switch is made without authorization, no long-term commitment
to service from the POLR is intended or implied. Consumer Commenters proposed
language to clarify that the authorization, verification, and rights of cancellation
do apply if the change to the POLR is initiated by the customer or the POLR.
The commission agrees with both suggested revisions and incorporates such
language into subsection (k).
TNMP proposed deleting language in subsection (l) that would have capped
the fee that could have been charged to a customer for an off-cycle meter
read and prevented the registration agent from charging a switching fee to
the customer. REP Coalition proposed modifying subsection (l) to allow the
REP to pass through disconnect, reconnect, and off-cycle meter read charges
imposed by the TDU without markup. MOU Commenters and TEC argued that subsection
(l) should not apply to municipally owned utilities or electric cooperatives
since they have the authority to establish rates or determine what fees they
will charge.
The commission agrees with the arguments presented by MOU Commenters and
TEC and revises this subsection accordingly. However, the commission declines
to make any other changes to this subsection. The commission believes that
the language as originally proposed fairly balances the right of the customer
to switch service at an established, fixed date in exchange for the flexibility
to request a more suitable date upon payment of a fair price.
Consumer Commenters proposed increasing the notice timeframe from 30 days
to 45 days in subsection (m)(1) and mandating that the notice be a separate
mailing and not a bill insert. TXU Retail did not agree with Consumer Commenters'
proposal to increase the timeframe to 45 days and instead supports REP Coalition's
proposal. AEP Energy Services also did not support Consumer Commenters' proposals
to increase the timeframe for sending the notice and to require such notice
to be a separate mailing. AEP Energy Services argued that a separate mailing
would impose a potentially costly restriction on the notification process
and that customers do not have the expectation that everything sent with the
bill is unrelated or unimportant to his service. TNMP and REP Coalition proposed
deleting the requirement in subsection (m)(1) that such notice be provided
in advance to affected customers, arguing that in many cases the information
may not be available 30 days in advance, and such advance information many
negatively impact the merger or acquisition. Additionally, TNMP and REP Coalition
proposed deleting subsections (m)(1)(B),(C), and (E) and significantly revised
(m)(1)(D). These parties argued that the mere fact that the REP has been acquired
should not automatically give rise to a customer right to switch unless the
change will result in a modification of the terms and conditions under which
the customer is receiving service. Further, in some cases the customer and
the original REP may have had a long-term contract. In such cases, the parties
argued, both the new REP and the customer should be bound to continue service
under the existing terms and conditions. Reliant proposed modifying (m)(1)(F)
to make it clear that the notice may be sent to customers after the effective
date of the transfer of customers, particularly if customers are transferred
to the POLR. Consumer Commenters proposed modifying (m)(1)(G) to require the
acquiring REP to provide the terms of service in addition to the Electricity
Facts label.
The commission agrees with TNMP and REP Coalition that it may not always
be feasible to provide adequate notice to customers in advance, and adopts
language similar to that in §26.130 that allows the notice to be sent
promptly after all legal and regulatory conditions are met. The commission
disagrees with Consumer Commenters' proposal to increase the notice time from
30 days to 45 days, but agrees to the requirement that such notice be a separate
mailing. The commission disagrees that any further changes should be made
to subsection (m)(1) as proposed by TNMP and REP Coalition. The commission,
however, does agree that if there is no material change to the terms of service
offered to the customer by the new REP, then the customer does not have the
right to cancel the contract without penalty. The commission adopts new subsection
(m)(3) to reflect this understanding. The commission also modifies subsection
(m)(1)(F) as proposed by Reliant. The commission also makes the modification
suggested by Consumer Commenters to subsection (m)(1)(G).
TNMP and REP Coalition proposed deleting subsection (n)(1)(A) and (B).
They argued that REPs should not be considered guilty of slamming before they
are allowed to investigate and respond to a filed slamming complaint. TNMP
and REP Coalition also proposed revisions to subsection (n)(2) that would
make the commission's investigation more formal, by allowing an opportunity
for notice and hearing prior to the commission making a finding with respect
to the complaint. Additionally, parties suggested that corrective actions
be taken after such finding was made by the commission. Consumer Commenters
also proposed a revision to (n)(2) that would require the commission to notify
the complainant of his or her right to appeal the commission's finding. TNMP
and REP Coalition proposed several revisions to subsection (n)(3) to incorporate
the changes they recommended to subsections (n)(1)(A) and (B). They proposed
new subsections (n)(3)(A) and (B) to require the unauthorized REP to take
all actions within its control to return the customer to the original provider
and cease collections activities related to the switch only after the commission
has made a finding that the switch was an "intentional, unauthorized switch."
Similarly, both parties recommended revising subsection (n)(4) to reflect
that the responsibilities of the original REP are only triggered after a finding
of intentional slamming by the commission. They also proposed deleting subsection
(n)(4)(C), which required the original REP to maintain a record of customers
that experienced an unauthorized switch. Consumer Commenters proposed modifying
(n)(4)(A) so that the customer would also be informed of the amount they would
have been billed by the original REP had the unauthorized switch not occurred.
TNMP and REP Coalition also suggested modifying (n)(4)(D) to reflect that
while the original REP will not bill the customer for any charges, it may
collect from the authorized REP any charges incurred during the period the
customer was served by the unauthorized REP.
The commission disagrees with all the proposed changes to subsection (n)
submitted by TNMP and REP Coalition. Based on experience in the telecommunications
industry, the commission believes the rules as proposed appropriately respond
to allegations of slamming while allowing both the customer and the affected
REPs the opportunity to present information and supporting documentation to
the commission for review and consideration. The commission rejects the proposal
to turn the informal complaint resolution process into a more formal, evidentiary
process as that would only delay resolution for the affected customer. Similarly,
the commission declines to adopt Consumer Commenters' proposed change to subsection
(n)(2). Proposed §25.485 and §22.242 (relating to Complaints) adequately
document the commission's obligation to inform the customer of his right to
appeal a commission resolution of an informal complaint. The commission's
experience has demonstrated that customers who allege an unauthorized switch,
first and foremost wish to be returned to their original service provider.
If subsequent investigation by the commission determines that the allegedly
unauthorized REP did in fact have appropriate authorization, it does not change
the fact that, for some reason, the customer no longer wishes to receive service
from that REP. Additionally, nothing in the proposed rules prevents a REP
that is not found "at fault" of an unauthorized switch from subsequently re-billing
the customer for any and all appropriate charges, including any early termination/cancellation
penalties that may have applied, pursuant to the customer's terms of service
document. Additionally, the commission rejects that an unauthorized switch
must also be found "intentional" for the customer to receive appropriate corrective
actions. The commission defines an unauthorized change as a change in a customer's
REP that is made without having authorization and verification from the customer,
in compliance with the commission's rules, prior to switching the customer.
As such, an unauthorized switch is viewed from the perspective of the customer,
not the REP. Similarly, the commission also rejects the deletion of subsection
(n)(4)(C). The commission receives only a small fraction of customer complaints.
Typically, customers only complain to the commission after complaints to the
appropriate companies have not resulted in any satisfactory response from
those companies. As such, the commission encourages companies to respond to
and resolve customer allegations of slamming among themselves, without forcing
every customer to file a complaint with the commission to get appropriate
resolution. REPs may find it beneficial to adopt a standard 30-day cancellation
clause that allows a customer to switch back to the original provider for
any reason within the first 30 days, as long as the customer pays for the
electric service received. The commission also declines to adopt the modification
proposed by Consumer Commenters. The commission believes subsection (n)(4)(D)
provides correct notification to the customer of any charges he or she may
be required to pay to the original REP.
MOU Commenters and TEC both commented that the records of customer verifications
and authorizations required by subsection (o)(1) should not apply to municipally
owned utilities or electric cooperatives. These parties argued that reporting
requirements imposed on electric cooperatives and municipally owned utilities
are limited to those instances contained in PURA §40.004(7) and §41.004(5).
Similarly, both parties argued that subsection (o)(2) does not apply to either
since the proposed rule references PURA §15.023 and §15.024, which
address the imposition of administrative penalties by the commission against
"persons" in violation of provisions of the statute. Parties argued that neither
a municipally owned utility nor an electric cooperative is a "person" as defined
by PURA §11.003(14). TNMP and REP Coalition also proposed modifying subsections
(o)(2) and (o)(3) to incorporate the idea that corrective actions may only
be required by the commission "after notice and hearing." Consumer Commenters
proposed modifying (o)(3) by removing the phrase "and recklessly" from the
finding made by the commission in order to initiate the certificate revocation.
TEC argued that subsection (o)(3) should also be modified to reflect that
electric cooperatives and municipally owned utilities are not required to
be certificated and therefore, they are not subject to this provision.
The commission agrees with the arguments presented by MOU Commenters and
TEC and amends this subsection, as appropriate, to reflect their concerns.
The commission rejects the changes proposed by TNMP and REP Coalition for
the reasons cited in subsection (n). The commission notes that §22.246
of this title (relating to Administrative Penalties) adequately addresses
the concerns raised by these parties with respect to due process upon the
finding that they are in violation of commission rules. The commission agrees
to modify subsection (o)(3) to more closely reflect the standards outlined
in PURA §39.356.
§25.475, Information Disclosures to Residential
and Small Commercial Customers.
REP Coalition suggested a general clarification that the disclosure provisions
refer to "electric services" and "electric service products" rather than services
and products.
Reliant and the State of Texas noted that the term "plan name" in §25.475(a)
was not defined. Reliant said the term should be deleted if it meant the same
thing as "name of product offered." The State of Texas said "plan name" should
be defined in §25.471 if there is a requirement to disclose it.
With regard to advertising claims made about an electric product's price,
cost competitiveness, or environmental quality, AEP Energy Services suggested
eliminating the specific statement required by the rule and allowing REPs
to use words of their own choosing that indicated the phone number and/or
Internet site where consumers could obtain more details. AEP Energy Services
agreed, however, that persons contacting a REP for more information should
be provided with information in a form that allowed easy comparison with other
products.
With regard to §25.475(c)(3), terms of service document, MOU Commenters
and TEC said the commission has no authority to require municipally owned
utilities or cooperatives to furnish it with their terms of service documents,
because PURA specifically limits the commission's authority in this regard.
TXU Retail said the disclosures required in the terms of service document
should not restrict the customer's ability to purchase a package of electric
and non-electric services at a "package" price. The company said that experience
in other competitive markets has shown that REPs will probably be offering
a variety of services, some of which would not fall under the commission's
jurisdiction. At the public hearing for this project on October 16, 2000,
TXU Retail clarified that a provider should be exempt from having to provide
the information specified in §25.475(c)(5)(G) if electric service were
sold as a package that included services not regulated by the commission and
should not have to itemize component costs for the package on the customer's
bill. In its reply comments, Shell disagreed with TXU Retail's position. Shell
said if a provider can understate the true cost of electricity by bundling
it with dog-walking or other services, then the possible misrepresentation
of the price for electric service makes a mockery of the Electricity Facts
label.
The commission applauds efforts by TXU Retail or any other REP to offer
creatively designed products to meet customer demand. However, REPs are required
to provide an Electricity Facts label that reflects the "bundled" cost of
electric service,
i.e.
the price to beat rate
for affiliate REPs. To the extent other non-electric services are packaged
with electric service, competitive retailers must follow the standards outlined
in §25.475(c)(5)(G) and 25.475(e)(1)(A)(iii) in disclosing the price
to customers. The commission notes that this subsection is not intended to
allow affiliate REPs to offer bundled products, consisting of both electric
service and non-electric service, that have the effect of discounting the
price to beat rate.
AEP TDUs said the terms of service document should also include a list
of discretionary fees contained within the TDU's tariff, because the TDU will
be permitted to bill the REP for discretionary service fees incurred by a
retail customer.
AEP Energy Services said items specified in §25.475(c)(5)(L)-(N) should
be included in the "Your Rights as a Customer" disclosure rather than in the
terms of service document. These items relate to nondiscrimination and the
availability of assistance programs for qualified low-income persons.
Consumer Commenters said the terms of service should contain no minimum
contract term and no penalty for a customer to terminate a contract after
30 days notice. They also recommended: itemizing costs related to switching
(specifically special meter reading fees, deposit requirements and charges
associated with non-electric services, as applicable); clarifying that the
billing methods set forth under §25.475(c)(5)(G) are the same as those
used to produce the Electricity Facts label for that product; deleting switching
fees from §25.475(c)(5)(H) and limiting late payment and collection costs
to nonresidential accounts; requiring a description of the provider's own
anti-discrimination policy; informing all customers about bill payment assistance;
and describing the company's customer complaint procedures. Consumer Commenters
said limiting late payment and collection costs to nonresidential customers
would make this provision consistent with §25.480(b).
Consumer Commenters supported 45-day advance notice for changes in terms
and conditions, contract, or terms of service. Additionally, Consumer Commenters
said any material change should automatically cause the contract to revert
to a month-to-month term so that customers who missed the 45-day window would
still have an opportunity to change providers. Consumer Commenters support
requiring that notice be given in a separate mailing, not as an insert to
the bill, and support automatic renewal clauses to be in effect for a maximum
of 30 days.
The commission agrees with Consumer Commenters that 45 days advance notice
of material changes is appropriate and changes the rule accordingly. The commission
also agrees with Consumer Commenters that a material change in the terms of
the contract should give customers an opportunity to change providers. Accordingly,
the commission adds a requirement that the notice shall give the customer
the option to decline any material change in the terms of service and cancel
the contract without penalty. The commission also clarifies that such a provision
would not be required if the change would be beneficial to the customer, such
as a price decrease, or if the change is mandated by a regulatory authority.
The commission disagrees that such notice must be provided in a separate mailing,
but instead requires such notice to be conspicuously labeled.
AEP Energy Services supported the general format specified for the Electricity
Facts label, but wanted to allow REPs some flexibility in the appearance.
TXU Retail said the rule should provide flexibility for REPs to provide their
Electricity Facts labels electronically, and should permit the adjustment
of font sizes so that a label can fit onto a standard sheet of paper. EDF
sought a clarification to specify that an Electricity Facts label must be
provided for each product offered by a REP. EDF also said the label should
be distributed monthly or quarterly, and should coincide with a customer's
ability to shop. TXU Retail replied that updates and distribution more frequent
than those currently required under §25.475(e)(7) could create customer
confusion and lead to increased compliance costs that would be passed on to
customers.
The commission holds that a standard format will make it easier for customers
to compare product offerings, and declines to make the changes suggested by
AEP Energy Services and TXU Retail. Increasing the length or the width of
the label is acceptable. Furthermore, the current wording of the rule does
not preclude offering an electronic version of the label in the prescribed
format, as long as a printed version is also available. The language of subsections
(c)(1), (c)(5)(B), (e)(3) and (e)(4) taken together establish the intent of
the commission that an Electricity Facts label must be specific to the electricity
product being offered to customers, and a separate label should be prepared
for each product. The commission finds no compelling reason to require monthly
or quarterly distribution of the label as a billing insert as long as the
label is available to the customer upon request, as currently provided in
the rule.
Shell said separate price disclosures for consumption levels of 500, 1000
and 1500 kWh per month will be misleading to customers and lead to inaccurate
pricing comparisons among REPs. Shell suggested a single price based on the
actual average consumption of each class of customer in a TDU territory, as
determined by the commission. Shell said different utilities can have different
rate structures, which can skew the results of rate comparisons. The company
also commented that "most consumers are unlikely to know their monthly consumption,
much less the intricacies of utility rate design."
The commission disagrees with Shell's assessment of customer awareness.
Some customers--especially those who can modify their electric consumption--may
want a product that offers tangible savings for conservation, and the Electricity
Facts label should make it easy for customers to compare various products
on such criteria. The commission declines to make the change suggested by
Shell.
Consumer Commenters suggested changing the heading "energy charge" to "comparison
price." Consumer Commenters also said that for products priced according to
time-of-day rates, price disclosures should include the peak rate, the off-peak
rate, and the number of peak/off-peak hours used in load profile assumption.
Consistent with its comments with regard to standard month-to-month contract
terms, Consumer Commenters also said items concerning minimum term and penalty
for early contract termination should not have to be addressed. In addition,
Consumer Commenters suggested adding an item to the label disclosing the REP's
average wait time for calls into the company's customer service center. AEP
Energy Services, in reply, said issues regarding wait time were better addressed
in REP certification rather than the Electricity Facts label. AEP Energy Services
said it may be more important to a customer to have a question resolved quickly.
The commission agrees with Consumer Commenters that adding off-peak rates
would add to a customer's ability to compare products that vary seasonally
or according to time-of-day use, and revises the content of this portion of
the label accordingly. In addition, the heading of this section is changed
to "electricity price." The commission makes no change with regard to the
"contract" section, as there is no compelling reason to limit a provider's
ability to offer a long-term contract product.
EDF strongly supported the type of fuel and emissions disclosures contemplated
in the rule, noting that it followed the precedent set by §25.251 relating
to Renewable Energy Tariff. Enron suggested adding a column in the fuel mix
table to depict the statewide system mix, saying that the comparison would
be meaningful to customers. Green Mountain advocated eliminating mandated
renewables from the fuel mix table, a proposal TXU Retail said was illogical
and self-serving. TXU Retail said mandated renewable generation purchases
should be included in a REP's fuel mix disclosure. Green Mountain and Enron
recommend adding a footnote to the fuel mix table clarifying that state law
mandates a provider to buy a certain amount of renewable energy. Both said
the practice would be consistent with environmental marketing guidelines published
by the National Association of Attorneys General (NAAG), adding that under
the NAAG guidelines, marketing a renewable product solely on the basis of
mandated purchase requirements was misleading to customers. In its reply comments,
however, Reliant said it found no such statement in the NAAG guidelines. Reliant
said that even if there were such a statement, it would not apply, as there
is no requirement to purchase renewable energy because a provider may choose
to incur a statutory penalty instead. Reliant said providers should be allowed
to place a footnote in the label that states they are in compliance with purchase
requirements either through actual purchases or penalty payments.
The commission agrees with Enron that a column depicting the statewide
fuel mix would help customers evaluate different electricity products, and
changes the "sources of power generation" section of the Electricity Facts
label accordingly. The commission agrees in part with various comments made
by Green Mountain, Enron and Reliant regarding the renewable energy mandate.
The commission holds that a product's use of renewable resources can be compared
side-by-side with the state average, and that this comparison will be sufficient
for customers to judge the extent to which the provider is in compliance with
the renewable mandate. Unless it offers a renewable-only product at the price
to beat rate, an affiliate REP must include its renewable power in the Electricity
Facts label for its standard price to beat product. Further issues regarding
how mandated renewable energy purchases are disclosed shall be addressed in
Project Number 22816,
Standards for the Labeling
of Electricity with Respect to Fuel Mix and Air Emissions.
CEED said carbon dioxide should be deleted from the disclosures on the
Electricity Facts label because it implied a threat to consumer's health and/or
safety that was inappropriate. CEED asserts that there is no clear scientific
consensus regarding the correlation of carbon dioxide emissions and global
warming. CEED also suggested that the bar chart should use national averages
rather than state averages as a benchmark, and should carry a statement that
industrial air emissions in Texas, as regulated by the Texas Natural Resources
Conservation Commission, are required to comply with standards established
under the U.S. Clean Air Act. EDF, on the other hand, supported using a state
average as a benchmark for comparison, because the state is the relevant market
within which Texas consumers will purchase power. In reply comments, Reliant
joined CEED.
The commission declines to pass judgment on the quality of scientific research
on global warming. The commission does, however, have a statutory mandate
to ensure that Texans have sufficient information to make such a judgment
themselves if it affects their choice of a REP. The commission therefore declines
to make the deletion recommended by CEED. The commission agrees with EDF and
finds that using national emissions benchmarks would not contribute to a Texas
electric customer's ability to compare Texas electric providers.
EDF suggested changing the heading on the bottom section to "emissions
disclosures," noting that nuclear wastes are not air emissions. Consumer Commenters
found the emissions graph confusing and suggested developing another format
that replaces the label "100%" with the term "statewide average" and includes
a line or shading to indicate where bars are above or below the statewide
average. A similar suggestion was made by EDF. AEP Energy Services and TXU
Retail wanted to delete references to low-level nuclear waste, as previously
decided by the commission.
The commission agrees with the comments of EDF and Consumer Commenters
regarding the presentation of emissions disclosures. The commission finds
that a meaningful comparison of environmental impacts would show customers
how various products compare to a single benchmark, and that the most meaningful
benchmark is the Texas average for each environmental criterion. The commission
therefore revises the emissions graph to reflect indexed values, with the
value 100 representing the Texas average for each criterion. The area between
zero and 100 is labeled "better than Texas average," and the area above 100
is labeled "worse than Texas average." The graph heading is changed to "emissions
and waste per kWh generated." References to low-level nuclear waste are deleted.
Some of the comments regarding the Electricity Facts label also pertained
to issues being considered in Project Number 22816. Green Mountain recommended
that all issues relating to the presentation and calculation of fuel mix and
environmental impact on the Electricity Facts label be consolidated under
Project Number 22816. Similarly, Enron said specific fuel sources and emission
types should be determined in that project.
Consumer Commenters wanted labels to be ready June 1, 2001, so that they
could be distributed with products marketed during the pilot project. Enron,
however, wanted to change the annual distribution date of the label to April
so that it would coincide with the settlement schedule for the Renewable Energy
Credit (REC) Program in §25.173, relating to Goal for Renewable Energy.
Both Enron and Green Mountain advocated an annual calculation of historical
emissions and fuels, concurrent with settlement in the REC program, to authenticate
claims made on the Electricity Facts label. The companies also favored prospective
disclosures by which a REP would project the year's anticipated amount of
renewable energy, with authentication done at the end of the year.
Green Mountain and Enron recommended deleting the category "unknown resources"
from the fuel mix table. Both said including both categories is confusing,
redundant, and unnecessary. In its reply comments, Reliant concurred. Consumer
Commenters recommended renaming "unknown" as "spot market" to reflect the
fact that electricity purchased on the spot market probably will not be traceable
to specific generators. Consumer Commenters questioned the necessity of the
category "other" if spot market purchases were categorized separately.
TXU Retail wanted to add to the rule requirement for fuel mix disclosures,
"To the extent the information is available to the REP from the REP's supplier."
Green Mountain emphasized that REPs should not have the option of avoiding
environmental disclosure by claiming that a large portion of their power came
from unknown generation sources. Green Mountain advocated assigning statewide
system average values to such generation and factoring it in with a REP's
generation from known sources. Enron and Green Mountain said statewide system
averages should be recalculated annually to reflect changes in the renewable
energy market. EDF, in its reply comments, emphasized its support for company-specific
disclosures that would enable customers to compare REPs and their electricity
products.
Consumer Commenters supported reporting of emissions by all REPs (not just
those who claim to offer "green" energy) based on the estimated emissions
of the company's individual wholesale electricity purchases, and opposed using
statewide averages. New Power, in its reply, argued the opposite and said
REPs would not be able to determine the generation sources for such wholesale
electricity purchases. Green Mountain stated its preference for a system of
tradable tags that would permit identification of the emissions profile for
particular wholesale sales of electricity. Green Mountain said REPs should
have the flexibility to be as accurate as possible with their emissions disclosures,
and that regional average emissions values would not be sufficient for accurate
disclosure.
Issues relating to how fuel mix and environmental disclosures are calculated
are being addressed in Project Number 22816. The commission therefore deletes
from (e)(4) references to the Texas Natural Resource Conservation Commission's
Point Source Air Emissions Inventory. Of the specific issues raised by the
parties in these comments, the commission shall defer the following to Project
Number 22816: when disclosure data shall be calculated; whether disclosures
should be historical or prospective; the use of statewide, regional or ISO
averages; and accounting for power purchased on the spot market. The fuel
mix table shall retain the categories "coal and lignite," "natural gas," "nuclear,"
"renewable energy," and "other."
Further, the commission makes no change to §25.475 with regard to
the distribution of the label. Subsection (b) as written makes clear that
when a provider begins marketing an electricity product, the label for that
product must be ready for dissemination to prospective customers. The commission
notes that the date July 1, 2002, specified in subsection (e)(7) pertains
strictly to distribution of the label as a billing insert and does not prevent
providers from creating Electricity Facts labels for use in marketing, advertising,
and customer enrollment for both the pilot project and full retail competition.
REP Coalition said that a common statement for "Your Rights as a Customer"
would help avoid customer confusion. Consistent with its comments regarding
disconnection, REP Coalition wanted the "Your Rights" document to include
a statement describing disconnection of service protections by the REPs.
MOU Commenters noted that PURA maintains the authority of municipally owned
utilities and cooperatives over metering in their service areas. Rule provisions
for the "Your Rights as a Customer" disclosure with regard to meter reading--§25.474(f)(4)(B)--therefore
should be amended to reflect this.
AEP TDUs specified that the "Your Rights as a Customer" disclosure should
clarify that the TDU physically disconnects a customer.
Consumer Commenters suggested making the "Your Rights" document focus more
on general customer rights, with company-specific provisions moved to the
terms of service document. Consumer Commenters' specific changes included:
stating a customer's right to switch providers after 30 days notice; describing
the information that must appear in the terms of service document, with emphasis
on information likely to vary among providers (Electricity Facts label, cost
of electricity, amount of security deposit, special meter reading fee, cost
of services other than electricity, company anti-discrimination policies,
and procedures for handling complaints); moving company complaint resolution
procedures to the terms of service document and explaining in the "Your Rights"
document the commission's complaint process; clarifying payment arrangements
regarding weather emergencies and high bills; and moving procedures for reporting
outages to the terms of service document. Generally citing Senate Bill 86
(SB 86), 76th Legislative Session, Consumer Commenters also recommended requiring
providers to offer levelized payment options and to include a description
of this option in the "Your Rights" document.
The commission agrees with Reliant that the "Your Rights" document should
be provided free of charge to the customer. The commission agrees with Consumer
Commenters that the "Your Rights As a Customer" document should be more general
and contain standard rights for customers that do not vary between companies.
Additionally, the terms of service document is expected to be more company
specific and should contain policies that are specific to the company. The
commission agrees with Consumer Commenters that the "Your Rights" document
should include a statement that the company offers levelized payment plans.
The commission also agrees with AEP TDUs that the TDU performs the actual
disconnection and this information would be of value to the customer and should
also be contained in the "Your Rights" document. The commission makes changes
to the rule to reflect these findings. The commission will develop a pro-forma
"Your Rights as a Customer" that complies with these provisions and which
REPs may reproduce for distribution to their customers.
§25.476, Request for Service.
REP Coalition suggested changes to proposed subsections (a) and (b) to
make the connection process the same for all types of REPs. REP Coalition
further recommended that the REP initiate the connection process within one
day after the three-day cancellation lapses. In its clarifying statements
filed after the October 16, 2000 workshop, REP Coalition indicated that the
rule should instead require the REP to submit the switch from the registration
agent at the proper time so that the switch is processed on the date agreed
to by the customer and as allowed by the TDU's tariff. Moreover, REP Coalition
requested replacing "switch" with "connection" to indicate that this section
refers to requests for new service, not switches of providers.
Consumer Commenters recommended replacing "within three days" with "after
the rescission period is over" to clarify that the three-day cooling off period
applies to all requests for service.
The commission agrees with the clarification offered by the REP Coalition
after the October 16th public hearing and modifies the rule as suggested.
The commission declines to use the term "connection" instead of "switch" because
this section applies to all requests for service, not just new requests. The
commission also finds that requirements contained in this section would be
more appropriately contained in §25.474(i). Therefore, the commission
transfers the amended language to §25.474(i), and withdraws §25.476
as published from consideration for adoption.
REP Coalition recommended replacing "actual" with "scheduled" date that
the customer will being receiving service from the new provider. REP Coalition
further recommended that the TDU inform the REP and registration agent if
the scheduled date varies by more than two business days.
In reply, TXU TDU opposed this process, because it is intended to address
interactions between the TDU and REP and should not be included in the customer
protection rules. TXU TDU added that this type of requirement should be addressed,
if at all, in the tariff for delivery service (commission Project Number 22187,
The commission agrees that customers should be informed by their selected
REP of the scheduled switch date and of any subsequent changes to that date
and modifies the rule accordingly.
MOU Commenters suggested prefacing proposed subsection (a) with the phrase
"other than in service areas of municipally owned utilities or electric cooperatives,"
to account for the fact that service is initiated by the customer--not by
a REP--in municipally owned utility or cooperative service area, consistent
with the terms and conditions of access applicable to those areas.
TEC stated that proposed §25.476 fails to recognize that a municipally
owned utility and electric cooperative may be providing energy service, in
addition to a REP, affiliate REP, and a POLR. Therefore, TEC recommended adding
"consumer-owned competitive retailer" to the entities that may provide functions
in subsections (a) and (b). TEC further commented this section does not account
for the differences between the terms and conditions tariffs being developed
under commission Project Number 22187 for municipally owned utilities and
electric cooperatives. Specifically, TEC suggested adding the language in
proposed subsection (b) to reflect that a cooperative or municipally owned
utility may initiate access to the delivery system under their tariff terms
and conditions.
The commission agrees with TEC, and has amended the rule to apply to all
REPs. However, the commission declines to use the term consumer-owned competitive
retailer, and will separate municipally owned utilities and electric cooperatives
from REPs as necessary.
REP Coalition recommended a separate process for expedited connection,
at the customer's request. The expedited connection process would require
the new customer to agree to pay for all electric service received if the
customer exercises the right to cancel service within the rescission period,
as well as waive receipt of an enrollment notice from the registration agent.
Such a waiver would not, however, prevent the customer from filing a complaint
against the REP for slamming, cramming, or on some other basis. The proposed
language would allow the REP to request the registration agent and the TDU
to complete the connection at the time agreed to by the customer, or as soon
thereafter as the TDU can accomplish in accordance with its tariff.
In reply, TXU TDU expressed concern with REP Coalition's recommendation
for the same reasons outlined under §25.474 pertaining to expedited switch
or reconnect service.
As mentioned in the commission's response in §25.474(h), the commission
disagrees that an expedited connection process is needed, and instead allows
REPs to submit enrollment or switch orders to the registration agent prior
to the expiration of the customer's right of cancellation period.
TEC suggested adding the word "energy" before service throughout this section
to clarify the type of service being provided. In its reply comments, TXU
Retail recommended "electric" instead of "energy" to avoid confusion with
other types of energy service (
e.g.
, gas).
The commission agrees with TXU Retail, and has amended the rule accordingly.
§25.477, Refusal of Service.
In proposed subsection (a)(2), TEC recommended modifying the provision
regarding prohibited equipment to include not only the tariffs of TDUs, but
also the tariffs of cooperatives and municipally owned utilities.
The commission agrees with the proposed change, and has revised the rule
accordingly.
In proposed subsection (a)(3), Reliant and TXU Retail commented that the
term "prove" is used improperly here, and will be difficult to apply and enforce.
TXU Retail suggested replacing it with "reasonably demonstrate."
The commission concurs with Reliant and TXU Retail, and has amended the
rule accordingly.
REP Coalition and TNMP recommended changes to proposed subsection (a)(3)
and (4) to require all REPs, not just the affiliate REP or POLR, to offer
the customer an opportunity to pay outstanding debt to receive service. This
corresponds to REP Coalition's recommendation concerning the ability of a
REP to disconnect.
The commission disagrees with the proposed change, on the basis that a
REP has the discretion to offer the customer an opportunity to pay outstanding
debt. Only the affiliate REP and POLR should be required to do so. However,
the commission has eliminated proposed subsection (a)(5), which allowed any
REP to refuse service to a customer if the customer owed a debt to the POLR.
The commission finds that there would be no appropriate mechanism that would
clearly distinguish the debt owed to a POLR versus a debt owed to another
REP that shares the same company name as the POLR.
Consumer Commenters recommended amending subsections (a)(4) and (5) to
require all REPs to offer a deferred payment plan if the customer expresses
an inability to pay the outstanding (undisputed) debt.
TXU Retail, Entergy Texas REP, and AEP Energy Services replied that the
commission should reject Consumer Commenters' proposal regarding deferred
payment plans.
The commission disagrees with Consumer Commenters that all REPs should
be required to offer a deferred payment plan. While the commission encourages
REPs to offer alternative payment arrangements, the commission finds that
mandating such a requirement is inconsistent with the competitive market.
The State of Texas noted that a deposit should not be required under proposed
subsection (a)(4) due to indebtedness, if the dispute is over indebtedness
of the customer.
In reply, AEP Energy Services disputed the State's recommendation, on the
basis that a deposit should be required if a customer has had service legitimately
terminated and there is still unpaid indebtedness. AEP Energy Services added
that the fact that a customer raises a dispute over the amount previously
owed when the customer seeks to re-establish service, should not permit the
customer to avoid the deposit.
The commission recognizes the State of Texas' concern that requiring a
deposit for indebtedness when the indebtedness is in dispute implies that
the customer is at fault. However, the rule does not require the REP to collect
a deposit. Instead, it states that the REP must provide service if the customer's
indebtedness is in dispute and the customer pays a deposit. This provides
protection for both the new provider as well as the customer. Therefore, the
commission declines to strike this provision.
REP Coalition recommended changes to proposed subsection (a)(8) to allow
all REPs to refuse service if the customer is unwilling to accept its terms
of service. The purpose for this change, according to REP Coalition, is to
enable competition.
The commission declines to adopt such a provision in this section. The
commission finds that if a customer does not choose to accept a REP's terms
of service, as provided to the customer pursuant to §25.474 and §25.475,
the customer may decline to receive service from that REP or exercise the
right to cancel the contract.
Consumer Commenters, Shell, and the State of Texas opposed the one-year
minimum term for customers returning to an affiliate REP. The parties asserted
this provision is a barrier to competition and contrary to the notion of customer
choice. The State of Texas added that the proposed rules should not in any
way restrict a customer's ability to switch providers to obtain a better price
and/or service.
In reply, AEP Energy Services and TXU Retail expressed support for the
minimum term to avoid having customers return to the price to beat for short
periods when it is lower than the competitive market price. Both AEP Energy
Services and TXU Retail recommended the commission address this issue in the
price to beat rulemaking.
The commission disagrees with REP Coalition and finds that an affiliate
REP cannot require a minimum service term, for reasons specified in the discussion
of Question 8. The commission has amended the rule accordingly.
The State of Texas and Consumer Commenters recommended striking subsection
(a)(9), which allows a REP (that is not an affiliate REP or POLR) to refuse
service for any reason that is non-discriminatory. Consumer Commenters argued
that this provision provides too much discretion and would invite abuse.
TXU Retail claimed that an affiliate REP should be treated like all other
REPs, except the POLR, for the purposes of this subsection.
In reply, AEP Energy Services and TXU Retail opposed striking this subsection.
TXU Retail asserted that the rules should allow competitive REPs to choose
which customers to serve, so long as their choices are not made on illegally
discriminatory criteria. AEP Energy Services added that this subsection provides
a legally appropriate and non-discriminatory policy that may contribute to
lower costs and benefit a competitive market.
The commission agrees with TXU Retail, and declines to strike subsection
(a)(9).
The State of Texas recommended adding a category to proposed subsection
(b), so that a REP is not permitted to refuse service for failure to pay an
outstanding bill to another REP. The State argued that REPs should not be
in the business of collecting debt for their competitors.
In reply, TXU Retail stated that a REP must be able refuse to serve a potential
customer if they know the customer left its previous provider with an unpaid
bill.
The commission agrees with the principle embedded in the proposal by the
State of Texas. However, such a provision is inconsistent with the credit
and deposit standards adopted under §25.478(a) for competitive retailers.
Additionally, all REPs are encouraged to make use of readily available credit
reports from accredited reporting agencies. To the extent REPs report past
due accounts to such agencies, that information would be available for review
by other REPs and such REPs may use that information as the basis for collecting
a deposit or requiring a customer to produce other acceptable credit.
AEP TDUs stated that proposed subsection (b)(2) should be clarified to
allow a REP to refuse service to a customer who fails to pay charges for the
discretionary services contained in a TDU's tariff. AEP TDUs claimed this
is necessary because these charges are related to the provision of electric
service.
The commission agrees with AEP TDUs, but declines to make any changes to
the rule. As defined in §25.341(7) of this title (relating to Definitions),
discretionary services are related to the transmission and distribution of
electricity. Therefore, failure to pay these discretionary charges is grounds
for the REP to refuse service.
AEP TDUs also commented that proposed subsection (b)(3) is inconsistent
with the recovering period in cases of theft that are allowed under commission
Project Number 22187,
Terms and Conditions of Transmission
and Distribution Utilities' Retail Distribution Service
. Proposed subsection
(b)(3) allows a REP to back-bill a customer for services provided over a period
of more than six months in cases involving theft of service, whereas the standard
terms and conditions developed under Project Number 22187 allow a maximum
six-month period.
The commission declines to make any changes to this rule, because there
is no longer an inconsistency between the recovery period in cases of theft.
The terms and conditions of a TDU's retail distribution service tariff does
not place a restriction on amount of time a TDU can back bill in cases of
unauthorized use of the delivery system.
Consumer Commenters recommended amending proposed subsection (c) to require
a REP to explain in detail the specific reason for the refusal of service.
Without such information, according to Consumer Commenters, a customer might
not be able to determine whether service has been refused for a prohibited
reason.
TXU Retail replied that Consumer Commenters' recommendation is too subjective
and should not be adopted.
The commission agrees with TXU Retail that the term "in detail" in this
context is extremely vague. Thus, the commission declines to make the change
proposed by the Consumer Commenters. However, REPs should provide a sufficient
explanation so the customer understands the reason for such refusal.
Reliant claimed that proposed subsection (c)(1) should not require written
refusal of service notices in every case. Instead, Reliant suggested language
in proposed subsection (c)(1) for the notice to be provided in writing or
by other means at the customer's request.
Reliant and TXU Retail claimed that this subsection should also allow for
electronic disclosure to a customer attempting to enroll via Internet (
The commission agrees with Reliant's and TXU Retail's proposed changes
and modifies the rule accordingly.
REP Coalition and TNMP suggested adding an exception to written notices
in proposed subsection (c)(2) for customers that do not otherwise qualify
for the product or service offered by the REP under applicable terms of service.
Similarly, Reliant claimed that proposed subsection (c)(2) should recognize
the TDU's right to refuse service under its tariff.
The commission disagrees with REP Coalition and TNMP and declines to include
such an exception in subsection (c)(2), since it could be easily abused. The
commission also declines to make Reliant's proposed change to subsection (c)(2),
on the basis that this rule does not govern the relationship between the TDU
and the customer.
§25.478, Credit Requirements and Deposits.
REP Coalition made a general argument, with respect to all of the proposed
rules, that all REPs, and not just the POLR, should have the ability to disconnect
customers for non-payment of their electric bills. REP Coalition identified
a number instances in §25.478 where conformity changes would need to
be made if its policy recommendation on disconnection is adopted by the commission.
Reliant and TNMP filed redline editions of the proposed rules with the same
proposed changes. Reliant's redline edition also spelled out "REP" instead
of just "provider" in subsection (h) and (j) in this regard.
The commission declines to adopt a policy allowing all REPs the right to
seek disconnection of a customer's electric service for non-payment, including
the related right to prevent a customer from switching to another REP until
the customer pays all outstanding balances. The commission believes that such
a policy is an inappropriate collection mechanism in a competitive market.
However, the commission agrees other requirements that more properly reflect
competitive credit and collection practices should be considered. Specifically,
the commission amends subsection (f) to reflect that the amount of deposits
may be the greater of either the next two months' estimated usage or one-sixth
of the estimated annual billing. The commission believes that allowing for
an increased deposit during anticipated peak summer months appropriately allows
the REP to mitigate the potential risk that a customer may not be able to
pay a bill and that the deposit could then be applied to any unpaid balance.
For similar reasons, the commission modifies subsection (k) to allow a REP
to maintain a customer's deposit for the entire time a customer receives service
from the REP, and to allow the customer to designate whether a refunded deposit
is paid to the customer or transferred to the new REP, should the customer
switch REPs.
Concerning subsection (a), Entergy Texas REP said that it would potentially
allow a residential customer to establish credit on the basis of one month's
history with a REP and proposed that the wording of paragraph (3)(A)(i) should
instead be changed to reference a customer who has been a customer "for" two
years prior rather than "within" two years prior. Without explanation, REP
Coalition offered language to paragraph (3)(A)(v) to change "a letter of credit
history" to "credit history information detailing (A)(i)-(iv) above" and clarifying
that "provider" could mean either REP or TDU.
The commission declines to adopt Entergy Texas REP's proposal to limit
the applicability of subparagraph (A) to only those residential customers
who have been customers of REPs or TDUs for a minimum of two years. The other
clauses within subparagraph (A) offer sufficient balance to the potentially
small time period allowed in clause (i), where the term "within two years"
appears.
The commission agrees that the phrase "a letter of credit history" is confusing
and modifies the language to clarify that a REP obtains a satisfactory payment
history from the customer's previous REP or from an accredited credit reporting
agency. The commission declines to adopt the suggested detail concerning type
of provider, because the language in the published rule is inclusive of both
types.
REP Coalition proposed that the following language be added to the end
of subsection (a)(3)(C): "and previous REPs and transmission and distribution
utility furnish such information, if available, to the REP after a request."
In response to staff requests for clarification, members of REP Coalition
said that the intent of the wording was to acknowledge that the referenced
credit history might not be available from prior providers and to let the
new provider "off the hook" if the credit record was not available. Two members
of the Consumers Commenters argued against REP Coalition's proposal, saying
that it takes away the ability of the customer to establish credit under the
provision when credit records are not available, warning that providers could
conveniently lose such records and, once lost, the customer would be out of
luck with alternative providers as well. Consumers suggested that either providers
should be specifically required to keep such information, or, in the alternative,
that a new provider should have to allow the customer to qualify under the
provision when a negative credit cannot be established (due to unavailability
of records or otherwise). REP Coalition affirmed that it did not intend to
extend the credit history requirement beyond the stated two years, or to put
onus on either the customer or previous providers to produce the records.
The commission agrees with Consumer Commenters that a residential customer
who is 65 years of age or older, and who otherwise meets the requirements
of subparagraph (C), should not be denied this avenue of establishing credit
due to unavailability of records. The commission amends subparagraph (C) to
allow otherwise eligible customers to qualify if no negative record can be
established.
Regarding subsection (b), relating to credit requirements for non-residential
customers, the State of Texas argues that no deposit should be required from
governmental entities because their creditworthiness is not an issue and because
most governmental entities are not subject to the types of late fees and charges
which would be deducted from a deposit. Entergy Texas REP said that this provision
should be modified to explicitly allow a REP to require a deposit from non-residential
customers if satisfactory credit cannot be demonstrated, proposing the addition
of the sentence, "If satisfactory credit cannot be established by non-residential
customer using the criteria established by the REP, the customer may be required
to pay a deposit."
The commission agrees with the State of Texas that the provisions of subsection
(b) should not apply to customers that are governmental entities, and amends
the provision accordingly. The commission also agrees with Entergy's revision
and adds the proposed language.
For clarity purposes, AEP Energy Services proposes that subsection (c),
relating to initial deposits, be divided into two lettered subsections addressing
guarantors and initial deposits.
The commission finds that the separate paragraphs function to separate
the issues referenced by AEP Energy Services and declines to make the change.
REP Coalition also proposed language to subsection (j)(6), relating to
guarantees of residential customer accounts, that "terms of service document"
be changed to "letter of guarantee."
The commission disagrees with REP Coalition and declines to adopt the proposed
language. The commission believes that a customer's terms of service document
should clearly identify that failure of a customer acting as a guarantor to
pay the guaranteed amount may lead to the termination of the guarantor's contract.
The commission also encourages REPs to reiterate this provision in the letters
of guarantee actually signed by the customer.
Regarding subsection (l), relating to re-establishment of credit, REP Coalition
proposed that "by that customer" be inserted to the "disconnected for…theft
of service" reference. TXU Retail proposed that the requirement that a REP
prove the amount of electric service received but not paid for and the reasonableness
of any charges, be reduced to an obligation to "explain" the amounts and only
"upon request."
The commission agrees with REP Coalition and adds "by that customer" in
reference to theft of service. The commission finds that the burden of proof
for the amounts unpaid and the reasonableness of charges is appropriately
assigned to the REP. However, the commission agrees that the exercise of proof
need not occur except upon request and amends the rule accordingly.
Regarding subsection (m), relating to upon sale or transfer of company,
TXU-Retail argued that "customer deposits" should be added to the provision
so that customer deposits would follow customers when a new POLR is designated
or when a REP sells or transfers its business. TXU-Retail proposed that the
amount to be transferred should be the net deposit, the amount remaining after
the full deposit is applied to any final unpaid bill prior to the sale or
transfer of a REP's business.
The commission declines to adopt any changes to subsection (m), because
it presumes that deposits held by the selling company are transferred to the
acquiring company, provided the acquiring company accepts the transfer of
such deposits. Additionally, the changes made to subsection (k) already specify
that any amount still owed to the REP may be subtracted from the amount of
the deposit refunded or transferred. As a result, the commission declines
to re-iterate such provisions in this subsection.
§25.479, Issuance and Format of Bills.
Reliant, TNMP and REP Coalition proposed clarifying that §25.479 and §25.480
pertain to a customer's bill from a REP for electric service.
The commission agrees that §25.479 and §25.480 apply to electric
bills issued by REPs. However, the commission disagrees that it does not have
the jurisdiction to regulate other products and services as they relate to
the electric bill. Specifically, PURA §17.151 clearly establishes the
commission's authority over other, non-electric, products and services that
appear on the customer's electric bill. The commission clarifies these rules
to reflect this understanding.
REP Coalition, TNMP, and Reliant suggested that the requirement for a monthly
bill be negotiable between the customer and the REP, and proposed changes
in subsection (a) to reflect that. Reliant commented that some parties may
prefer, and some REPs may elect to offer, a quarterly, semi-annual, or annual
bill for electric service instead of the monthly bill required by this section.
In reply comments, the Independent Retailers and REP Coalition proposed that
through mutual agreement between the REP and the customer a less frequent
or more frequent billing could be established. The Independent Retailers suggested
that customers who agree to receive bills on a different cycle should be able
to do so, particularly if they are protected by the ability to obtain detailed
billing information on request.
The commission agrees in principle with REP Coalition, TNMP, Reliant, and
the Independent Retailers that a more or less frequent billing should be negotiable
between the customer and the competitive retailer. However, the commission
notes with concern that the Georgia natural gas program, for example, experienced
massive billing failures involving both delayed bills and inaccurate bills
from marketers. The commission believes it is fundamental to an emerging competitive
market that customers be provided timely and accurate bills so they can make
informed choices regarding their selection of REPs. Such concerns notwithstanding,
the commission does agree that, in an established competitive market, billing
frequency is an appropriate service upon which a competitor can distinguish
itself. Therefore, the commission determines that a requirement to issue bills
monthly is appropriate for the first two years of the competitive market.
REP Coalition, TNMP, Entergy, Reliant, and the Independent Retailers also
suggested that Internet billing be available to customers regardless of whether
they enroll via telephone, the Internet, or in writing, when the customer
has specifically agreed to the issuance of an electronic bill or statement.
Consumer Commenters propose that subsection (a) be amended to require that
the customer's consent to receive an electronic bill or statement be in accordance
with the Electronic Signatures in Global and National Commerce Act (Esign).
The commission agrees with REP Coalition, TNMP, Reliant, and the Independent
Retailers that all REPs should be able to offer Internet billing to customers
who desire to receive their bills via that method of delivery and amends the
rule accordingly. However, the commission also adopts requirements to prevent
an affiliate REP or POLR from conditioning the receipt of electric service
on the customer's acceptance to receive a bill electronically. Additionally,
the commission prohibits any REP from charging a customer a fee for receiving
a bill. The commission also determines that the bill must be in agreement
with the commission-established billing procedures and with Esign, and makes
changes to the rule accordingly.
AEP TDUs disagreed with subsection (a). AEP TDUs stated that meter usage
would be provided by the TDU to the REP. AEP TDUs pointed out that the Standard
Terms and Conditions contained in the TDU tariff in Project Number 22187 provide
that "billing determinants" will be provided by the TDU to the REP (REP is
referred to as "Competitive Retailer" in that project). AEP TDUs commented
that since it is possible that billing determinants could be based on a measure
other than metered usage, this section should be modified by striking "meter
usage" and replacing that term with "billing determinants." In reply comments,
TXU TDU agreed.
The commission agrees with AEP TDUs and TXU TDU that billing determinants
may include measures other than metered usage. However, the commission also
recognizes the importance of the reporting of meter usage to the customer
and wants to insure that meter usage will be reported. The commission alters
the proposed rule to incorporate other billing determinants as well as to
specify that metered usage will be included.
MOU Commenters commented that none of these provisions should be applied
to billing by a municipally owned utility for retail customers within its
traditional service area. MOU Commenters determined that where a customer
is receiving a consolidated single bill from the municipally owned utility,
the municipal utility's customer protection rules should control, not a dual
set of rules. Likewise, they continued, that billing standards under the proposal
should not apply to billing situations within the service areas of a municipally
owned utility that has adopted customer choice where the municipal utility
has exercised an option to have consolidated billing done by a third party
competitive retail entity. In that instance, they conclude, applicable billing
requirements will either be provided for in the rules relating to Terms and
Conditions of Access by Competitive Retailers to Municipal and Co-op Delivery
Systems, or will be a matter of contractual agreement between the consumer-owned
electric system and the third-party competitive retailer. TEC pointed out
that a customer located within the certificated service area of an electric
cooperative might be receiving two bills, one from the REP for electric service
and one from the electric cooperative for distribution services. TEC suggested
making it clear in the rule that this section applies only to a REP that is
actually issuing bills to retail customers, unless the REP is issuing a consolidated
bill on behalf of an electric cooperative or municipally owned utility.
The commission agrees with MOU Commenters that none of these provisions
should be applied to billing by a municipally owned utility. The commission
also agrees with TEC that a customer within the certificated service area
of an electric cooperative might be receiving two bills, one from the REP
and one from the electric cooperative for distribution services. The commission
determines that billing done by the municipally owned utility or electric
cooperative in its service territory does not need to adhere specifically
to §25.479 or §25.480. To reflect this understanding, the commission
adopts a new subsection (a) concerning the application of this section, and
renumbers all remaining subsections accordingly.
Reliant and REP Coalition proposed language in subsection (a) stating that
"through mutual agreement with the REP, a customer may request and receive
a bill with more or less detailed information than otherwise would be required
by the provisions of this section if the REP will also provide the customer
with detailed information on request." MOU Commenters determined that only
these items should appear on the bill and that the provisions of this section
shall not be applicable to billing by a municipally owned utility or an electric
cooperative providing a single bill to a retail customer within the municipally
owned utility's or electric cooperative's certificated area: the name and
address of the REP and the number of the license if any; a toll-free number
that the customer can call 24 hours a day, seven days a week to report power
outages and concerns about the safety of the electric system; the service
address, ESI, and account number of the customer; the service period for which
the bill is rendered; the payment and due date of the bill (and if different
the date by which payment from the customer must be received by the REP to
avoid a late charge or other collection action); and total current charges
for electric service.
The commission agrees with MOU Commenters that the items listed by the
MOU Commenters are vital elements of the bill. However, the commission determines
that there are other vital elements that MOU Commenters omitted. As discussed
previously, the commission encourages REPs to provide clear, easily understood
bills that present charges in a bundled format. The terms of service document
shall contain other notices, such as how the customer can contact the REP
to obtain more detailed, unbundled charges. Regarding products that combine
electric and non-electric service, the commission holds that any bundled bill
must prominently include a subtotal containing all electric-only charges.
The provider may choose whether or not to further unbundle the non-electric
charges, as long as the billing method does not conflict with the terms of
service agreement or any other provision of this subchapter.
Consumer Commenters suggested changing subsection (b)(2) to require that
the bill contain the provider's policy for the maximum amount of time a customer
will spend on hold or in a cue before speaking with a live customer service
representative. At the public hearing Consumer Commenters stated that they
did not intend to put this in the bill section but in the terms of service
section. In reply comments, AEP Energy Services agreed that many customers
have encountered frustrating experiences contacting service representatives
and that the answer is not to increase the complexity of every customer's
bill by adding potentially lengthy statements of call answering policy. This
may add to customer frustration AEP Energy Services maintained. Entergy Texas
REP requested that the commission reject Consumer Commenters proposed changes
requiring that hold times be reported.
The commission agrees with AEP Energy Services and Entergy Texas REP that
the bill is not the proper place for the statement of an electric service
representative's call policies, and declines to make changes to this section
of the rule.
TEC and MOU Commenters suggested that the billing and format section in
general appears to require more than is provided for under the customer protections
specified in PURA. TEC proposed to amend subsection (b)(3) to exclude the
toll-free requirements from the numbers the customer can call to make complaints
about the bill, and the number that the customer may call to report outages
and concerns about the power system. TEC also proposed to eliminate the requirement
that the outage number be available 24 hours a day, seven days a week. TEC
proposed to eliminate the requirement for a REP to place the numbers on the
bill if a municipality or co-op was billing for T&D services. TXU-Retail,
in reply comments, stated that it wants to ensure that the REP has the ability
to list the number on its billing statement should a customer choose dual
billing.
The commission strongly disagrees with TEC's proposal to eliminate the
toll-free 24-hour a day, seven day a week outage number. The toll-free 24-hour
number is vital to the public safety and is clearly in the public interest.
Therefore the commission declines to make changes to the rule based on TEC's
suggestion. If a municipally owned utility or electric cooperative is providing
bills in its service territory for non-retail electric service, the commission
determines that it does not have the authority to require the municipally
owned utility or electric cooperative to place the toll-free phone number
on the bill. The municipally owned utility or electric cooperative is required
to develop rules similar to the commission's customer protection rules for
the protection of customers served by it within its service territory. However,
in the case of a competitive retailer billing for retail services, the commission
does have jurisdiction, and the REP will be required to place the 24 hour
a day seven day a week toll-free phone number for outages on the bill. The
commission declines to adopt TEC's suggestion and makes no changes to the
rule to accommodate this suggestion.
Reliant, TNMP, MOU Commenters, the Independent Retailers, and REP Coalition
recommended removal of the requirement to place on the bill a separate calculation
contained in subsection (b)(8) for the average unit price for the current
billing period. Reliant, TNMP, and REP Coalition contended that for customers
on levelized payment plans or fixed monthly amounts, the required information
would be confusing or misleading. For example, they commented, for a customer
paying a fixed monthly amount, the required information would show a high
average price in low usage months and a low average price in high usage months.
Neither price, however, would provide the customer any meaningful information
as to whether its contract for service was a high or low priced one, they
contended. REP Coalition suggested that far more meaningful information about
average rates will be available in the Electricity Facts label of the REP's
terms of service, which will already be in the customer's possession.
The commission disagrees with Reliant, TNMP, MOU Commenters, Independent
Retailers, and REP Coalition that the bill should not contain the calculation
of the average unit price for the current billing period. As discussed in
its response to Question 1, the commission determines that this calculation
is vital for customers to compare rates between providers, and declines to
delete the requirement from the rule.
TXU Retail proposed to eliminate the requirement in subsection (b)(9) to
identify and itemize recurring charges on the bill for electric service, other
than those charges for electric service. TXU Retail argued the commission
does not have the authority to prescribe billing requirements for charges
other than electric service. TXU Retail commented that if a customer wants
to purchase electric service, gas service, home security service, and a dog-walking
service in a package and believes the total price offered for the package
is acceptable, the REP offering that package should be under no obligation
to itemize component costs for the package on the customer's bill. In reply
comments, Shell disagreed with TXU Retail stating that while Shell does not
care what TXU charges for its dog-walking service it is vitally interested
in what TXU Retail charges for electric service, especially if this rate is
disclosed in the company's Electricity Facts label used to attract other customers.
Shell stated that it is possible for TXU Retail to understate its true cost
of electricity by bundling dog walking and other services. In that case, Shell
claimed, it makes a mockery of the Electricity Facts label. Shell also stated
that a supplier that bundles Internet service and electricity into a single
product and then makes up a price for the electricity component misrepresents
the price of electric service. Shell contended that no one should be able
to claim that electricity is free, for example, by charging $200 per month
for Internet service. AEP TDUs suggested that the TDU's discretionary service
charges should be listed in the REP's terms of service document, because the
REP can pass these charges along to the customer.
The commission disagrees with TXU Retail that it does not have jurisdiction
over the items placed on the electricity bill. The commission determines that
PURA indeed gives the commission certain authority and does address the REP's
responsibilities for other services appearing on the bill. The commission
determines that it is vital that the electric portion of the bill be separated
from the other services so that late fees may be properly assessed and that
the average unit price for electricity can be determined. However, as mentioned
previously, REPs are required to provide an Electricity Facts label that reflects
the bundled cost of electric service,
i.e.
the price to beat rate for affiliate REPs. To the extent that other non-electric
services are bundled with electric service, competitive retailers must follow
the standards outlined in §25.475(c)(5)(G) and §25.475(e)(1)(A)(iii)
in disclosing the price to customers. The commission notes that this subsection
is intended to prevent an affiliate REP from offering bundled products, comprised
of both electric service and non-electric service, that have the effect of
discounting the price to beat rate. Additionally, the commission clarifies
that the customer' electric bill should identify services and costs as identified
and disclosed in the customer's terms of service document, both with respect
to electric and non-electric services and products.
AEP Energy Services suggested that subsection (b)(14) be altered to eliminate
the requirement for stating that the customer can obtain 12-month usage. AEP
Energy Services suggested that this requirement is redundant, because it is
contained in the customer's terms of service statement.
As discussed in the response to Question 1, the commission agrees that
the 12-month usage history need not be provided on a customer's monthly bill.
Instead, the commission requires that the terms of service document contain
a notice that this information is available by contacting the REP.
Consumer Commenters proposed a change in subsection (b)(15). This change
would require that the bill contain a notice of those services that have been
added since the last bill and be accompanied by a brief, clear, non-misleading
description (written in the same type size as the rest of the bill) of the
services being rendered. In reply comments, Entergy Texas REP proposed that
the commission reject the overly prescriptive disclosures regarding the addition
of new services proposed by consumers in §25.479(b)(15). Entergy stated
that customers will be better served by calling the REP's customer service
number and discussing any billing questions regarding new services since the
last bill with the REPs customer service staff. AEP Energy Services suggested
that subsection (b)(16) be deleted, because the requirement is redundant with
the customer's terms of service document.
As discussed in response to Question 1, the commission agrees with Consumer
Commenters that a listing of charges appearing since the last bill should
appear on the bill. This will help detect cramming from the first bill it
occurs.
Consumer Commenters offered suggestions on subsection (b)(17) that require
the unbundling of charges. Consumer Commenters stated that the charges should
be unbundled into generation, transmission, distribution, competition transition
charges (CTCs), system benefit fee, discretionary services, rate discount,
etc. If CTCs are not shown on the bill, Consumer Commenters contended, neither
residential customers nor the commission can assure that illegal cross subsidies,
or commercial discounts are resulting in certain customer classes not paying
their required obligations for stranded costs. In reply comments, Entergy
Texas REP stated that this proposal is akin to requiring hotel operators to
unbundle their room charges showing charges for guest registration, concierge,
laundry, maid service, etc. Entergy Texas REP suggested that REPs that decide
to present their charges in an unbundled fashion should have the option to
display transmission charges and distribution charges as separate line items.
Finally, Entergy stated that non-ERCOT REPs may be billed separately for transmission
and distribution charges. Independent Retailers disagreed with Consumer Commenters'
proposal as well and request that subsection (b)(17) remain unchanged. Independent
Retailers stated that given the high degree of regulatory oversight contemplated
by PURA and the proposed rule, this fear is not well grounded. TXU Retail
stated that an efficient and robust market will prevent REPs from overcharging
for services. Since there will no longer be a monopoly provider, TXU Retail
contended, customers will be able to move to another REP if they are not satisfied.
Retail electric providers who overcharge "will simply not get away with it,"
TXU retail stated. Consumer Commenters summarized in reply comments, when
faced with complicated terms and conditions, a lot of fine print, the risk
of paying more than is fair, and losing the security provided by the regulated
system, consumers will do what is in their best interests and stick with what
they know.
For reasons outlined in response to Question 4, the commission encourages
the REP to provide a bundled bill for electric service. It should be noted
that, with the Texas market's price to beat structure, the meaningful comparison
for the customer is the monthly bill against the bundled rate negotiated with
the REP and the bundled price to beat of the affiliate REP. This is the manner
in which prices will be included on the relevant Electricity Facts label.
It is unlikely that REPs in Texas will market to customers based on multiple,
disaggregated charges; therefore, the need to review unbundled information
is expected to be quite low. Nevertheless, a REP should include in its terms
of service document, the notice that a customer may receive a breakdown of
the bundled rate upon request. To ensure that unbundled products can be adequately
compared among REPs, the commission requires that standard terms approved
by the commission be used for unbundled electric services.
Reliant suggested that acronyms be allowed to be placed on the bill in
proposed subsection (b)(17). They suggested "TDSP" for transmission and distribution
service, "Gen. Service" for generation service, "SBF" for system benefit fund,
"TC" for transition charge and "CTC" for competition transition charge. AEP
proposed that the terms "gross receipts assessment" and "nuclear decommissioning
fee" should be added. In the reply comments, TXU recommended that the terms
"gross receipts assessment" and "nuclear decommissioning fee" should be added
to subsection (b)(17) to the listing of unbundled terms in this section. Consumer
Commenters also requested that explanations be provided for any non-obvious
abbreviations, symbols or acronyms.
The commission acknowledges that acronyms and abbreviations are used frequently
in the industry. However, such terms and acronyms may be unfamiliar to customers.
Accordingly, the commission adopts the following standardized terms for recurring
monthly electric charges presented in an unbundled format on a customer's
electric bill: "transmission and distribution service," "generation service,"
"transition charge," and "system benefit fund." The definitions, which include
what types of charges are covered by these terms, have been added to §25.471.
The commission does not believe it is in the public interest that these terms
be presented as acronyms or abbreviations.
Reliant proposed to change subsection (d) to make clear that an estimated
bill should only be used for an estimated meter read. The State of Texas suggested
that this section should also require the use of a true-up provision or some
future adjustment. TEC recommended adding the municipally owned utility or
electric cooperative's failure to obtain or transmit a meter reading on a
timely basis to the list of reasons a REP might be unable to issue an actual
bill.
The commission agrees with Reliant that an estimated bill should only be
issued for an estimated meter read and determines the proposed rule language
reflects that understanding. The commission agrees with the State of Texas
that there should be a true-up process. The commission determines that the
true-up process will occur when the customer receives a bill based on an actual
meter read. The commission also agrees with TEC that the failure of the municipally
owned utility or electric cooperative to provide the billing determinants
to the REP might also be the cause of an estimated bill. The commission makes
changes to the rule to reflect these findings.
Reliant proposed changes to proposed subsection (e) to clarify that copies
of a customer's billing records may be obtained by that customer on request
at least once annually at no cost.
The commission agrees with Reliant that a customer could receive billing
records once annually at no cost, but may receive detailed billing information
that is not included on the bill at any time at no additional charge. The
commission has made changes to the rule to reflect this.
Reliant proposed a change in subsection (f) to recognize that the customer
may have a credit balance (such as a level billing plan balance), not just
a delinquent balance, with a REP, which the customer would want transferred.
The commission agrees with Reliant that a customer may have a credit balance.
It is also possible that that customer would want that credit transferred
to another account in the same customer class with the same REP. The commission
changes the rule to reflect that. In Reliant's parenthetical comments, however,
it suggests that the balance (credit) could be transferred to a new REP. The
commission notes that this section is only intended for balance transfers
from one account to another account in the same customer class with the same
REP. The commission specifically did not allow for transfers between REPs.
The commission adjusts the rule to specifically disallow balance transfers
between REPs, since this places a collections obligation on the new REP. The
commission notes, however, that this prohibition on balance transfers does
not apply to the transfer of a deposit from one REP to another, should the
customer opt to do so.
TEC suggested that section (g) be deleted, because the allocation of partial
payments is already addressed in Project Number 22187. REP Coalition asserted
that the allocation order for partial payments remain as proposed unless another
agreement is reached with the customer. Reliant proposed that the allocation
order be changed to the first oldest past due amount for electric service,
then to past due balance for non-electric services, then to the current balance
due for electric services, unless another agreement had been reached with
the customer.
The commission disagrees with TEC's comments that suggest that the Terms
and Conditions rules determine where a customer's partial payments go. That
rule governs the relationship between the REP and the TDU. Section 25.479
addresses the relationship primarily between the customer and the REP; therefore,
this rule will determine how the REP must apply the customer's partial payment
to the customer's account. The commission declines to adopt TEC's proposed
changes. The commission disagrees with Reliant's proposed allocation order
change and REP Coalition's suggestion that the order should remain the same,
unless another agreement is reached between the REP and the customer. The
commission determines that allocation of a partial payment has important consequences
to the customer, as the customer's service contract may be terminated for
non-payment of electric service. The customer might not realize the implications
of how the partial payment is applied, if it is buried in a contract, therefore
the commission declines to make the changes suggested by Reliant or REP Coalition.
The commission clarifies the rule to clearly explain how the partial payment
is applied.
Additionally, the commission recognizes that this section is more appropriately
placed in §25.480 and will therefore become §25.480(j).
§25.480, Bill Payments and Adjustments.
MOU Commenters suggested that this section should not be applicable to
billing by a municipally owned utility or an electric cooperative providing,
itself or through an agent, a single consolidated bill to a retail customer
within the municipally owned utility's or electric cooperative's certificated
service area. They also suggested that any REP should be allowed to establish
its own policies for credit requirements, deposits, estimated bills, record
retention, transfer of delinquent balances allocations of partial payments,
bill due dates, penalties for delinquent bills for electric service, adjustments
for overbilling or underbilling, a process for investigation and resolution
of disputed bills, any alternate payment programs or payment assistance, average
and level payment plans, and any payment arrangements or deferred payment
plans.
The commission agrees that municipally owned utilities and electric cooperatives
can set their own billing standards and makes adjustments to §25.480
that exclude a municipally owned utility and electric cooperative from the
requirements of this billing section if it is providing service to customers
in its own service territory. If a municipally owned utility or electric cooperative
is providing a consolidated bill and has contracted billing to a third party
competitive retail entity, then the municipally owned utility's or electric
cooperative's customer protection rules apply. If a REP is issuing a bill
for electric retail service (except when it is issuing a consolidated bill
on behalf of a municipally owned utility or electric cooperative), the bill
must conform to the standards set forth in §25.480. The commission makes
other changes to the bill issue date to be consistent with other commission
rules.
Consumer Commenters commented that the current billing system is not designed
for timely payment. Consumer Commenters proposed to amend §25.480(a)
by extending the due date from 16 days to 25 days from the date of issuance,
or allowing the customer to choose the day of the month the payment is due.
Consumer Commenters stated that many households are paid only once or twice
per month. Consumer Commenters claimed that cash flow is an obstacle to timely
payment for many Texans, and difficulties are created when short due dates
are combined with such a payroll schedule. They stated that currently some
utilities resolve these difficulties by voluntarily allowing customers the
opportunity to choose their own due date.
In reply comments, Entergy Texas REP and AEP Energy Services disagreed
with Consumer Commenters' proposal, and stated that the market should take
care of the problem. They alleged that Consumer Commenters' plan would increase
the financing requirements for REPs. AEP Energy Services stated that according
to Consumer Commenters' plan a customer would have 50% more time to pay its
bill than now permitted in the regulated market. AEP Energy Services furthered
that a customer who chooses his payment date carefully in relationship to
when his meter is normally read could ensure that nearly another month is
added to the time by which the customer must pay. Entergy Texas REP and AEP
Energy Services stated that this would impose additional costs on all customers.
The commission agrees with Consumer Commenters that cash flow is a problem
for many customers. The commission also recognizes that many customers are
constrained by limited resources when paying the bill. As mentioned previously,
the commission requires all REPs to implement a bill payment assistance program
to address these concerns. REPs are also required to offer all customers a
levelized bill payment program. Additionally, the commission strongly encourages
REPs to develop programs that allow customers to designate a specific payment
due date each month. As such, the commission declines to adopt a longer bill
payment period.
Reliant and REP Coalition suggested changes to subsection (b) to reflect
that a one-time, 5.0% penalty should apply only for electric service, and
should not apply to non-electric services that are contained on the same bill,
provided they are separately stated on the bill.
TNMP and TXU Retail proposed to amend the language of subsection (b) to
allow a 5.0% late penalty to be charged to residential customers for electric
service. In reply comments, Reliant and REP Coalition agreed, and stated that
residential customers should also incur a one-time late penalty not to exceed
5.0% for electric service, provided the REPs do not have the privilege of
disconnecting customers for non-payment. TEC stated that municipally owned
utilities and electric cooperatives are given the exclusive jurisdiction to
set all rates, including any customer fees. TEC suggested that this rule should
clearly state that subsection (b) is not applicable to a REP that is an electric
cooperative or municipally owned utility.
As discussed in the commission's response to Question 5, the commission
agrees that REPs should be allowed to assess a late fee of not more than 5.0%
of delinquent electric service charges that appear on a customer's bill. The
commission notes that to appropriately assess the late fee, REPs must clearly
identify the total amount due for electric service on the customer's bill.
The commission agrees with TEC, and amends the rule accordingly.
Reliant, TNMP and REP Coalition suggested that the overbilling provision
in subsection (c) be limited only to charges for electric service and that
the interest should be compounded monthly based on the annual rate set by
the commission.
The commission agrees with Reliant, TNMP, and REP Coalition and makes the
suggested changes to subsection (c).
REP Coalition, TNMP, Entergy Texas REP, and SPS commented that there should
be consistency between overbilling and underbilling requirements in the rule.
SPS stated that the requirements of subsection (d) should be modified to better
balance the underbilling collection rights of REPs with the rights of customers.
Specifically, SPS, Reliant, and REP Coalition recommended the addition of
language in subsection (d) to allow REPs to collect all underbillings for
which they can produce records identifying and justifying the underbilling.
To balance this right, SPS recommended that additional language requiring
REPs to offer deferred payment plans for the underbilling. SPS and REP Coalition
recommended language that would prohibit a REP from disconnecting a customer
who failed to pay the underbilled amounts before the date the REP notified
the customer of the underbilling. Reliant maintained that the REP should be
allowed to disconnect or terminate service if the customer fails to pay the
underbilled charges within a reasonable time. In reply, AEP TDUs suggested
that TDUs should also have the ability to backbill for longer than six months.
Reliant proposed changes to subsection (f) that the POLR may not disconnect
service if the customer fails to pay charges arising from an underbilling
more than six months prior to the date the POLR initially notified the customer
of the amount of the undercharge.
The commission finds that it is the responsibility of the REP to provide
accurate bills to customers. The customers should not be penalized if the
REP fails to bill appropriately. Therefore, the commission declines to amend
the rule. The commission also notes that TDU-Competitive Retailer rules, adopted
under Project Number 22187, contain provisions that address the TDU's ability
to back bill a REP for a term longer than six months.
The State of Texas commented that subsection (e) should contain an additional
provision that states that there shall be no disconnection or disruption of
service while the bill is in dispute. Reliant, TNMP and REP Coalition proposed
to change "provider" to "REP." This proposed change would limit the REP's
responsibility for dealing with disputes to those only for electric service.
The commission agrees with the State of Texas that service should not be
terminated or disconnected while a bill is in dispute. The commission also
determines that it is very important for a customer to receive timely responses
to billing concerns and disputes and that any disputes are handled in accordance
with this section and PURA §§17.152, 17.153, and 17.155. The commission
strongly disagrees with REP Coalition, TNMP, and Reliant that billing dispute
provisions should be limited only to electric service. PURA §17.151 is
clear about which charges are allowed on the electric bill. Therefore, the
commission determines that the REP
is
ultimately
responsible for the content of the bill, and should handle disputes in accordance
with this section as well as PURA. The commission finds that this section
is not restricted to disputes for electric service, and declines to make the
suggested changes to this section. The commission clarifies the dispute process
in this rule and makes it consistent with other commission rules.
Consumer Commenters proposed to remove the words "as applicable" from subsection
(f). They proposed that each REP be required to offer alternative payment
assistance plans. Entergy Texas REP filed reply comments that stated that
"as applicable" should remain in (f) and that all REPs should not be required
to offer those programs. AEP Energy Services proposed deleting the phrase
"in addition a REP shall inform the customer of the availability of POLR service
and how to obtain this service." AEP Energy Services asserts this information
should not be given to a customer who calls to see how to meet payment obligations.
As discussed in response to Questions 6 and 9, the commission agrees that
all REPs are required to offer a bill payment assistance program. Therefore,
the commission disagrees with Entergy Texas REP that the phrase "as applicable"
should remain in the rule, and that non-affiliate REPs should not be required
to offer a payment plan or program unless otherwise required by this section.
The commission agrees that the customer needs to be well informed. Therefore,
the commission determines that the bill payment assistance programs offered
by REPs shall be disclosed to the customer when the customer expresses an
inability to pay. The commission agrees with AEP Energy Services that the
REP should not be required to inform the customer of the POLR service at this
time as it might not be appropriate if a payment plan is being offered to
the customer. The commission declines to make changes to the rule as suggested
by Consumer Commenters and adopts the changes suggested by AEP Energy Services.
REP Coalition, TNMP, and Reliant (in connection with their disconnection
proposal) and Consumer Commenters proposed changes in subsection (g) that
would require a REP to offer one or more average or level payment plans. Consumer
Commenters stated that level and average payment plans are invaluable to many
customers who must manage their cash flow, not just low-income customers.
Consumer Commenters pointed out that PURA §39.101(e) gives the commission
the authority to require all REPs to provide customers with levelized payment
plans, not just the affiliate REPs and POLRs. Customer Commenters agreed that
customers should be responsible for paying in full any amounts owed when switching
providers. They suggest that subsection (g) should clarify that customers
who switch providers are responsible for paying all actual usage up to the
date of the switch. In reply comments, Entergy Texas REP stated that REPs
should not be required to offer alternate payment programs or payment assistance
programs. Entergy Texas REP emphasized that termination of electric service
to customers must be unencumbered by mandatory payment plans in order to afford
REPs the opportunity to minimize losses from high-risk customers.
As discussed in the response to Question 9, the commission agrees with
Consumer Commenters that level and average payment plans are very important
to some customers. The commission finds that electric utilities have been
required to offer these payment plans and this is a basic protection for some
customers. To guarantee that customers do not lose that protection, the commission
requires all REPs to offer all customers the option of enrolling in a level
payment plan. The commission disagrees with Entergy Texas REP that competitive
retailers should have the option of offering these plans but should not be
REP Coalition, TNMP, and Reliant proposed replacing the term "termination
notice" with "disconnection notice." This would allow a disconnection (as
opposed to a termination) to be suspended if a payment arrangement is made.
According to their proposal, if the customer does not fulfil the terms of
the payment arrangement, the customer may be disconnected without the REP
providing an additional disconnection notice.
The commission disagrees with REP Coalition, TNMP, and Reliant that REPs
should be granted the privilege of disconnecting customers for non-payment,
and declines to alter the proposed rule.
TXU Retail proposed changes to this section to eliminate the requirement
of a written deferred payment plan proposed in subsection (i). TXU Retail
stated that this change would benefit customers who make deferred payment
arrangements over the telephone. TXU Retail claimed that if a written confirmation
is required, the REP does not have an "agreement" with the customer at the
time of the telephone conversation. Therefore, customers whose bills are delinquent
remain in jeopardy of termination or disconnection until they receive and
return a signed deferred payment agreement. TXU Retail pointed out that current
practice, which allows a customer to make a deferred payment plan over the
phone has not resulted in complaints from customers that were lured into unfair
deferred payment arrangements that they later want to rescind.
REP Coalition, TNMP, and Reliant proposed requiring all REPs to offer a
deferred payment plan to a customer who has expressed an inability to pay.
They proposed this in exchange for the ability to disconnect customers for
non-payment. According to their proposal, the REP should not be required to
offer a deferred payment plan if a customer has received service from the
provider less than three months and lacks sufficient credit or satisfactory
history of payment from a previous REP (provided the information is furnished
to the REP by the previous REP). In reply comments, these parties clarified
that only the POLR should offer a deferred payment plan if REPs were not granted
the privilege of disconnecting customers for non-payment. In reply comments,
Entergy Texas REP stated that REPs should not be
required
to offer deferred payment plans but should be
encouraged
to offer such plans. Entergy elaborated that it is important
to remember that we are entering a deregulated competitive market and continued
attempts to restrict the REPs' ability to conduct business in a prudent manner
will only hamper competition and limit customer choice.
Consumer Commenters proposed changes to subsection (i)(1) to require all
REPs to offer a deferred payment plan. The plan proposed by Consumer Commenters
allows the REP to include a 5.0% late penalty for payment, but does not include
a finance charge. According to Consumer Commenters' proposal, a deferred payment
plan required because of a weather emergency as defined in §25.483(i)
must allow a customer at least six months, and up to twelve months, to pay
amounts incurred during a billing cycle in which a weather emergency occurred,
and the amount that the customer must pay to avoid disconnection shall be
no more than an amount equivalent to an average monthly bill based on annual
usage.
In reply comments, Reliant suggested that any deferred payment plans offered
by the POLR to a residential customer should be required to be in equal installments
and spread out into at least three billing cycles.
TEC stated that this rule should make it clear that subsection (i)(5)(B)
is not applicable to a REP that is a municipally owned utility or electric
cooperative.
The commission determines that as of January 1, 2002, price to beat customers
should not encounter a drastic change in service. The affiliate REP should
offer the same services it has been offering before the onset of competition
to ensure that all customers have the option of the same service and quality
of service that existed before the start of competition. The affiliate REP
should offer deferred payment plans and adhere to more specific credit and
deposit requirements regardless of whether it has been granted the privilege
of disconnecting customers for non-payment. Customers who switch to competitive
retailers are not guaranteed the same terms and conditions the affiliate REP
will be providing under the price to beat. Competitive retailers are encouraged,
but not required, to offer these programs, and they should be offered in accordance
with these rules. The commission agrees with Reliant that the current rules
require the deferred payment plan to be spread out over three billing cycles
and to be in equal installments. The commission reflects this change in the
rule, and notes that these payment plans will be required of both the POLR
and affiliate REP, not just POLR as Reliant suggested. The commission also
agrees with TXU Retail that payment plans should go into effect when the customer
calls, however, a copy of the agreement must be mailed to the customer. The
commission has amended the rule accordingly. Additionally, as mentioned in
the response to Question 9, the commission requires that all REPs offer customers
who express an inability to pay a bill that becomes due during an extreme
weather emergency the option to enter into a deferred payment plan, pursuant
to this subsection.
Consumer Commenters proposed a new subsection (j), entitled Bill payment
assistance program, to establish a program for the purpose of soliciting voluntary
donations from customers, employees and shareholders to provide financial
assistance to residential customers who need bill payment assistance. The
proposed program would require a REP or POLR, at the time of enrollment or
change of service, to inform all customers about the program and to offer
customers an opportunity to donate a fixed amount on a monthly basis. The
amount selected would be billed to the customer's account. According to the
proposed plan, the REP and POLR would also be required to provide information
regarding the bill payment assistance program to all customers through quarterly
bill inserts. Under the conditions proposed by Consumer Commenters, the REP
or POLR would be required to keep the money in a separate account in trust
and forward the donations to the TDU that serves that customer.
Under the proposed program, the TDU would collect the donations from the
REP and POLR. Funds received by the TDU would be deposited in federally insured
accounts and held in trust for the bill payment assistance program. Any interest
on the funds would accrue to the bill payment fund. The TDU, according to
Consumer Commenters' proposal, would distribute bill payment assistance funds
to customers in need of assistance through community organizations that are
approved by the TDU and that are within the TDU's service territory. On April
1 each year, the TDU would file an annual report with the commission detailing
total donations received from customers, employees, and shareholders. Under
the proposed plan, 10% of donations received by the TDU would be required
to be remitted to a nonprofit organization approved by the commission that
would promote the bill payment assistance program on a statewide basis. Furthermore,
each TDU, under the proposed plan would be encouraged to match the donations
it receives with shareholder funds on a dollar-for-dollar basis. Under the
proposed plan, those TDUs that currently provide shareholder-matching funds
for bill payment assistance would be required to continue to provide shareholder-matching
funds at 1999 levels.
Entergy TDU, in reply comments, noted that it has operated a program similar
to the one proposed by Consumer Commenters for the past 18 years. Entergy
TDU agreed that bill payment assistance programs are important to end-use
customers, to the local agencies that channel needy people toward bill payment
assistance opportunities, and to communities in its service area. Entergy
TDU stated that the system benefit fund (for low-income customer rate discounts
and weatherization services) does not address the same types of customers
or needs that are met by existing bill payment assistance programs. Entergy
TDU stated that the bill payment assistance is not synonymous with low-income
programs. Entergy TDU stated that most recipients of assistance are elderly
and experiencing a true emergency or temporary payment crisis and may not
be in need of or be candidates for longer-term rate discounts or weatherization
services. Therefore, Entergy TDU is a strong proponent of preserving fuel
programs. Entergy TDU stated that the question is how to transition the program
to a competitive market.
Entergy TDU pointed out that several issues addressed by Consumer Commenters
deserved more attention. For example, is it appropriate (or within the commission's
authority) to mandate that each TDU that currently provides shareholder-matching
funds for bill-payment assistance to "continue to provide matching at 1999
levels?" Entergy concluded that it is not appropriate at least for the reason
that "mandate" and "voluntary" would qualify as oxymorons. Secondly, if as
under current practices, actual dollars never flow from contributors directly
to recipients, and the customers will belong to the REP, not the TDU, why
would the TDU have money-handling responsibility at all? Entergy suggested
that funds collected by REPs in bills from contributors could simply be passed
directly by the REPs to the bill payment assistance administrator in each
TDU area (perhaps the Red Cross or a non-profit organization established for
that purpose). Entergy TDU suggested the language proposed by Consumer Commenters
could be revised to provide that the TDU would primarily coordinate the interaction
between intake agencies and the program administrator and act as an active
participant on the board of the non-profit bill payment assistance to ensure
that the administrator properly carries out the money-handling responsibilities.
Finally, Entergy TDU concluded that if the commission should find that it
has the authority to address bill payment assistance issues, including the
request for the establishment of a 10% set aside for a third-party statewide
entity to promote contributions, then it would seem appropriate to provide
funds for the REPs for out-of-pocket costs incurred in handling these market
mechanics.
As discussed in response to Question 6, the commission adopts new §25.480(g)
that requires all REPs to implement a bill payment assistance program.
§25.481, Unauthorized Charges.
AEP TDUs commented that the terms of service document in subsection (a)
should include all discretionary service fees in the TDU's tariff in order
for the REP to pass on those fees to the retail customer.
The commission disagrees with AEP TDUs, because this rule does not govern
the relationship between the TDU and the REP.
Consumer Commenters offered additional language for inclusion in subsection
(a), indicating that a REP must comply with Texas Property Code §53.254
"if a product or service would result in a lien against a consumer's homestead"
and with Texas Property Code §53.255 if a product or service involves
residential construction.
The commission believes that §25.471(b)(2) adequately addresses the
concerns raised by Consumer Commenters.
AEP TDUs stated that proposed subsection (d) should be modified to exclude
discretionary services provided by the TDU pursuant to its tariff from the
definition of charges "not related to the provisioning of electric service."
AEP Energy Services suggested that an option should exist to provide the annual
notice required by this subsection in the Your Rights as a Customer document.
The commission disagrees with AEP TDUs that the rule needs to be modified.
As explained in the discussion of §25.477, discretionary services provided
by the TDU pursuant to its tariff are by definition related to the provision
of electric service. Nonetheless, the commission agrees with AEP Energy Services
that the annual notice can be included in the Your Rights as a Customer document,
and has amended the rule accordingly.
The commission further incorporates changes referenced in §25.474
to clarify the authorizations and verifications necessary to add charges to
a customer's electric bill after the customer's initial selection of a REP.
Further the commission clarifies that the submission of charges to a customer's
electric bill is limited to the REP selected by the customer to provide the
customer's electric service. As such, all references to other "service providers"
is eliminated.
§25.482, Termination of Contract.
Consumer Commenters did not support the concept of allowing providers to
offer long-term contracts and charge customers a cancellation fee for terminating
contracts early. They argued that in a competitive market, customers should
be allowed to switch without penalties with a 30-day notice to their provider.
REP Coalition and AEP Energy Services supported the proposed rules and disagreed
with Consumer Commenters suggestion. They said that providers have the right
to offer both long-term contracts and month-to-month contracts. REP Coalition
suggested adding language that would require a REP to abide by the terms of
the contract in addition to the procedures in this section.
The commission agrees with REP Coalition and AEP Energy Services that,
in a competitive market, REPs have the right to offer long-term or month-to-month
contracts. In month-to-month contracts, both parties have the right to cancel
the contract without penalty. In long-term contracts, the REP may require
that a customer who terminates the contract early pay a penalty. Additionally,
with long-term contracts, should the REP materially change the contract, the
customer has the right to cancel the contract without penalty. The affiliate
REP, however, is prohibited from requiring long term contracts until after
2007, when the price to beat period expires. Further, the commission declines
to cap the early termination fee a provider may charge.
Consumer Commenters suggested that when a customer is terminated by a REP
and sent to POLR, the POLR should be required to send a notice to the customer
stating that the former REP has terminated service due to either nonpayment
or abandonment. TXU Retail said this was unnecessary because subsection §25.482(c)(8)
requires the REP, in its termination notice, to include such notification
to the customer.
The commission agrees with TXU Retail and declines to adopt Consumer Commenters'
suggested changes.
Consumer Commenters said that REPs should be allowed to terminate a customer's
contract for nonpayment of electric service only and should not be extended
as a collection function for amounts owed for products and services other
than electricity. They suggested that the rules explicitly say that nonpayment
will be the primary reason providers would terminate a customer's contract.
In reply comments, TXU Retail agreed with Consumer Commenters' suggestion.
REP Coalition suggested that this section apply only to those termination
notices issued because of nonpayment of electric service. In reply comments,
Entergy Texas REP said that REPs should be allowed to terminate a customer's
electric service for failure to pay non-electric charges on the same bill.
They argued that REPs should have the flexibility to terminate customers that
fail to pay their entire bill under the terms of the contract.
REP Coalition and Reliant further suggested that, in the case of nonpayment
for electric service, a provider should be required to send a disconnect notice
and offer the customer the opportunity to pay the amount due before a termination
notice is issued. Consumer Commenters disagreed, because it would allow a
REP to terminate a customer who has paid a bill in full after receiving a
disconnect notice. In reply comments, Reliant said that their suggestion would
reduce the number of customers who might be dropped to a higher priced POLR.
The commission determines that only the POLR will have the right to issue
a disconnection notice to customers. All other REPs have the right to issue
a termination notice for nonpayment of electric service only, in accordance
with this section. The commission agrees with Consumer Commenters and TXU
Retail and determines that REPs may terminate a customer's electric service
for nonpayment of electric charges only, not for non-electric charges included
on an electric bill. The proposed rules clearly state that a REP shall not
terminate a customer's contract if that customer pays in full before the termination
date. The commission also notes that all REPs are now allowed to charge late
fees and may seek deposits that more appropriately mitigate risk.
Consumer Commenters said that the prohibitions on disconnection in proposed §25.483(d)
should also apply to termination notices. They proposed a new section to incorporate
the changes. They said these prohibitions are in place to prevent a REP from
disconnecting a customer's service for charges that are not the customer's
responsibility and they argue that it is fair and appropriate to prohibit
terminations in the same situations. In reply comments, TXU Retail opposed
this suggestion because "a REP would not be permitted to send a customer to
the POLR if the prohibitions on disconnection during extreme weather period
are applied." Entergy Texas REP opposed Consumer Commenters' suggestion to
prohibit terminations for delinquency in payment for electric service by a
previous occupant of the premises. They said that it should be clarified by
adding, "if that occupant is not of the same household."
The commission adopts Consumer Commenters' recommendations to prohibit
terminations of contracts for the situations described in §25.483(d)
of this title. The commission also adopts Entergy's clarification for delinquency
by a previous occupant.
Consumer Commenters requested that the commission institute specific penalties
for providers who violate the termination procedures. They said such penalties
should include restitution for customers who are terminated by mistake or
sent a termination notice when such notice is prohibited. TXU Retail opposed
this suggestion. They said that while it is inevitable that some mistakes
will be made and some termination notices will be sent to the wrong customers,
REPs will want to keep customers in a competitive environment, and will take
the steps necessary to correct wrongs that occur. Further, they said, the
commission has the authority to investigate a REP for violation of commission
rules.
The commission agrees with TXU Retail and declines to adopt changes suggested
by Consumer Commenters.
Consumer Commenters said that providers should be required to send terminations
notices on paper and prohibit termination notices via e-mail or facsimile.
TXU Retail opposed this suggestion, saying that a customer should have the
right to choose to receive all communications from his or her chosen provider
via facsimile or email.
The commission determines that REPs are required to send paper termination
notices by mail. The commission also adopts language allowing REPs to send
an additional notice by email or facsimile.
REP Coalition, Reliant, TXU Retail, and TNMP suggested changing the requirement
that the termination notice be a separate mailing and changed the termination
date from ten days to five days after the notice is issued. They argued that
as a result of the proposed ten-day timeline, a provider is likely to be required
to serve a non-paying customer for an additional two months before the customer's
contract is terminated and the customer's account is sent to the POLR. They
said that allowing a provider to terminate a customer's contract five days
after issuing a notice would allow providers to avoid the adverse financial
impact such unrecoverable bad debts have on market participants. TXU Retail
added that after a REP issues a termination notice, the REP should contact
the customer by telephone to explain payment steps the customer could take
to avoid termination.
The commission declines to accept REP Coalition suggestions concerning
termination notices. Termination notices must be a separate mailing with a
termination date ten days after the notice is mailed to a customer. The commission
also notes that many customers may seek bill payment assistance upon receiving
a termination notice. However, the commission determines that in a competitive
market, competitive retailers should not be required to offer payment arrangements
or deferred payment to delinquent customers. However, the commission finds
that all REPs have the flexibility to do so and encourages such communication
between REPs and customers.
REP Coalition, Reliant, TNMP, and TXU TDU proposed several changes to clarify
the rule's intent and make it consistent with their proposed policy changes
on disconnects and "drops." They said the term "automatically" used in subsections
(b)(6) and (8) could be incorrectly interpreted to mean "instantaneously"
and should be clarified. They also suggested that subsection (b)(8) be deleted
because it contains the same requirement as subsection section (b)(6).
The commission adopts suggested changes from REP Coalition, Reliant, TNMP,
and TXU TDU in subsection (b)(6) to replace the word "automatically" to acknowledge
the transfer process in accordance with the applicable registration agent
protocols and TDU Tariff for Retail Delivery Service. The commission also
agrees with REP Coalition, Reliant, TNMP, and TXU TDU that subsection (b)(8)
is redundant and deletes it.
REP Coalition and Reliant made clarifying changes in subsection (d) and
added that providers should be allowed to terminate a contract effective on
a date other than the next meter read date.
The commission agrees with REP Coalition and Reliant, and adopts their
suggested changes.
Consumer Commenters said that in the event a provider terminates customer
contracts due to abandonment, that provider should not be allowed to collect
or attempt to collect penalties from a customer. In reply comments, TXU Retail
agreed with this suggestion. REP Coalition said this section should be deleted
because abandonment is not a defined term and could apply to any number of
actions. They argued that this restriction made sense when it was applied
to utilities operating in a regulated market, and might still apply to TDUs,
but these rules have no place in a competitive market where the new rules
apply only to REPs.
The commission declines to delete subsection (d). The commission agrees
with Consumer Commenters and TXU Retail that providers who abandon customers
should not be allowed to collect or attempt to collect penalties from those
customers, and adopts their recommended changes.
Consumer Commenters supported the prohibition on termination during extreme
weather conditions unless the customer refuses to enter into a deferred payment
plan. REP Coalition and TXU Retail said this section should be deleted. They
proposed changes so that a customer would have two choices for continued electric
service if the REP terminates the contract: (1) the customer can choose to
take advantage of a proposed expedited switch to a new electric provider,
or (2) the customer would be transferred to the POLR. TXU Retail noted that
if a customer's contract expires during a weather emergency, a provider should
not be required to extend the expired term beyond the date agreed to by the
customer in the contract. They argued that termination does not expose the
terminated customer to health dangers, because the customer does not lose
service. Further, they said, the obligation to serve is imposed only on the
POLR.
The commission disagrees with REP Coalition and TXU Retail, and declines
to delete this subsection. The commission determines that all providers should
be prohibited from terminating a customer's contract during an extreme weather
emergency due to a customer's non-payment of a delinquent bill. This is consistent
with the commission rule prohibiting the POLR from disconnecting a customer
during an extreme weather emergency. However, nothing in this section prohibits
a REP from terminating a contract during an extreme weather event, for any
other reason disclosed in a customer's terms of service contract, including
termination due to contract expiration.
Consumer Commenters said that termination should be prohibited where the
customer is ill or disabled and has met the procedures outlined in proposed §25.483(g).
TXU Retail opposed this suggestion, claiming that only the POLR has the obligation
to serve, and other REPs should not be required to provide service in every
instance that applies to the POLR.
The commission agrees with TXU Retail and declines to accept Consumer Commenters'
suggestion. However, the commission also notes that the implementation of
a mandatory bill payment assistance program should address many of the instances
previously triggered by this provision.
Consumer Commenters suggested a new subsection to prohibit a REP from issuing
a termination notice when an energy assistance provider makes a commitment
to forward payment sufficient to continue the customer's service. Further,
they argued, the rule should require providers to continue serving the customer
under the existing terms and conditions when payment is made; that a customer
should not be subject to termination when the account is paid. In reply comments,
TXU Retail said this was unnecessary, because termination will be stopped
as long as payment is received within five days of the termination notice.
The commission adopts changes suggested by Consumer Commenters prohibiting
REPs from terminating a contract when an energy assistance provider agrees
to make a payment on behalf of a customer. The provider shall continue serving
the customer under the existing terms and conditions.
Consumer Commenters said that a customer should be free to terminate a
contract, without penalty, whenever that customer moves to a new location.
Further, they suggested adding the following situations in which a customer
could terminate a contract without penalty: (1) the customer becomes permanently
disabled or dies during the term of the contract; (2) the REP fails to meet
its terms of service; (3) the customer files a complaint at the commission
against the provider; (4) the customer is called for active military duty;
and (5) force majeure. Reliant recommended clarifying this section to say
that a customer may cancel a contract without penalty
only
in the events listed in this section. AEP Energy Services said
that permanent disability or death does not normally trigger an automatic
right for a REP to terminate non-electric customer transactions, and therefore,
this proposal is unnecessary. AEP Energy Services also opposed the suggestion
to allow a customer to terminate a contract when the customer files a complaint
with the commission, saying that this is too broad.
The commission agrees with Consumer Commenters that a customer should be
allowed to terminate a contract, without penalty, whenever that customer moves
to a new location, even if it is in the same service territory. If a customer
moves from an apartment to a house, the load profile and energy usage will
change, and the customer should be free to choose a new plan based on the
energy needs of the new location. Likewise, REPs should not have to continue
serving a customer that moves to a new location based on that customer's energy
profile and usage at the old location. However, nothing in this section prevents
a customer and REP from agreeing to maintain an existing contract at a new
location. The commission agrees with Consumer Commenters that customers have
the right to terminate a contract, without penalty, when a provider notifies
a customer of a material change in the terms and conditions of their service
agreement. The commission's determination regarding a customer moving to a
new location covers situations such as moving to an assisted living facility,
employment transfers, or being called for active military duty. The commission
declines to allow customers to terminate a contract without penalty when that
customer files a complaint with the commission or "force majeure." The commission
declines to adopt Reliant's suggestion that a customer be allowed to terminate
a contract, without penalty,
only
in the events
listed in this section. This would limit a REP's flexibility to offer terms
more generous than listed here; this section is intended to provide minimum
protections for all customers.
Consumer Commenters and AEP Energy Services said that proposed §25.482(g)(2)
was unclear. Consumer Commenters opposed any rule that would permit a business
to breach a contract for profit, regardless of the reason. AEP Energy Services
stated that it appeared the language intended that a contract which allows
the REP to terminate the contract in response to market conditions should
also allow the customer the same option,
i.e.
,
to cancel the contract without penalty. Reliant proposed language that would
limit the right of cancellation without penalty to those events specifically
listed. Additionally, Reliant added a third event in which a customer could
cancel a contract without penalty: when the provider's terms of service grant
the customer such a right, as in month-to-month contracts.
The commission adopts AEP Energy Services' changes to clarify a contract
that allows the provider to terminate the contract in response to changing
market conditions should also allow the customer the same option. The commission
also revises this subsection to state that such reasons for termination must
be disclosed in a customer's terms of service document.
§25.483, Disconnection of Service.
Consumer Commenters supported the disconnection procedures that permit
only the POLR to disconnect a customer. They pointed out that in other competitive
electric markets, only the POLR has the right to disconnect service for nonpayment.
They argued that the POLR should have the right to disconnect, because it
has the obligation to serve customers. They said that if all REPs are allowed
the right to disconnect, it would be "used as a hammer to receive customer
payments" rather than using other devices to evaluate creditworthiness and
risk. REP Coalition, Reliant, TXU Retail, Enron, AEP Energy Services, TNMP,
SPS, Shell, and Entergy Texas REP argued that all REPs should have the right
to disconnect a customer for non-payment of electric service for any of the
reasons allowed for the POLR, as published in the proposed rules. REP Coalition,
SPS, and TNMP said the proposed rules would increase providers' risks and
costs of serving customers, increase the price of electric service for customers
who make timely payments, lead to increased credit requirements for all customers,
and have a generally adverse affect on competition. The increased costs and
risks, they argue, would serve as a barrier to entry for smaller electric
providers, which may be unable or unwilling to bear the higher risk of non-payment.
Allowing all electric providers to disconnect would keep costs low, reduce
the need for deposits, maintain "headroom," increase the ability of providers
to compete for customers, and decrease customer confusion by reducing the
likelihood that customers would be dropped to the POLR. They said that it
is the threat of disconnection, not physical shut off of electricity, that
improves collection of delinquent accounts. They predicted that their proposal
would not cause a significant number of disconnects, but did expect it would
"materially reduce" electric providers' uncollectible charges and reduce the
number of customers dropped to the POLR. REP Coalition submitted a paper,
REP Coalition and TNMP further argued that Senate Bill 7 contemplated that
all REPs would have the right to disconnect service to their customers. PURA §39.101
(a) and (h) set limitations on when and in what circumstances a provider may
disconnect service to residential customers. Specifically, the statute prohibits
providers from disconnecting electric service during a period of extreme weather
emergency, in cases of medical emergency, or for unrelated service.
The commission agrees with Consumer Commenters that only the POLR should
have the right to disconnect in a competitive market. The commission identifies
five reasons which support this policy determination: (1) the number of customers
who would actually be disconnected would grow, increasing the risk to health
and safety; (2) the TDU would not be able to keep up with the multiple disconnection
and reconnection requests from all of the REPs; (3) no other state has allowed
competitive REPs to disconnect for competitive energy charges; (4) the commission
would not be able to investigate disconnection disputes or enforce customer
protections for wrongful disconnections; and (5) the right to disconnect is
a mechanism for a regulated utility market.
First, in the current regulated market, every electric utility exercises
discretion in the decision to actually disconnect service to its customers,
but competitive REPs will not have the base of customers over which to spread
the luxury of discretion. While utilities may issue disconnect notices automatically
based on certain nonpayment criteria (amount overdue and length of time since
last payment), regulated utilities do not automatically disconnect customers
on the final due date. In part, this discretion is due to workload constraints
because each disconnection requires utility employees, who may not be available
on any given day or in any particular operating area, to visit the premise.
Also, the utility is unlikely to suffer severe economic harm if disconnection
does not occur because its regulated rates include reasonable collection costs
and unpaid debt expense. If REPs are allowed to disconnect for nonpayment,
these inhibitions are not present. No REP will be assured that nonpayment
or overdue bills will be reflected in their prices, because the competitive
market makes no such assurance. Indeed, the very arguments used by REP Coalition,
which rely on the economic harm that they would suffer if disconnection is
not allowed, lead the commission to agree with Consumer Commenters that REPs
would view disconnection as a tool to reduce potential losses in a profit
making environment. This would lead to REPs using less discretion, thereby
increasing the volume of disconnections in a competitive market. While a regulated,
monopoly electric utility may be able to justify leniency or more time in
the payment of overdue electric bills for some percentage of its customers,
competitive REPs will likely act more quickly to disconnect service compared
to electric utilities in the past. This could potentially result in disconnections
that expose customers to health and safety risks.
Second, the TDUs would not be able to keep up with the multiple requests
from REPs to disconnect and reconnect customers. The process of disconnection
and reconnection of service requires TDU employees to visit a premise for
each disconnection, and the REP is dependent on the TDU to accomplish these
tasks. The TDU would have to process every REP request for disconnections
in a nondiscriminatory manner, but it is unlikely that any TDU could handle
the volume of potential requests from a unknown number of REPs in a timely
manner. Multiple REPs would be individually sending service orders to the
TDU requesting disconnection and reconnection of service without coordinating
their workload or service requests with each other or with the TDU. This situation
may cause great confusion and delayed reconnections of service for customers.
This could harm the health and safety of children, elderly, disabled, and
others with special needs.
Third, no other state has allowed competitive REPs to disconnect electric
service for nonpayment of competitive energy charges. This is true even in
Nevada where the Single Retailer Model will be used by competitive electric
providers. In every case, the state legislature or commission has restricted
the right to disconnection to the default service provider or POLR (which
in almost every state is the incumbent electric utility) or the TDU if it
bills the customer directly for its regulated transmission and distribution
charges under the dual billing option. The Georgia Public Service Commission
(PSC) has authorized competitive natural gas suppliers (operating under a
Single Retailer Model similar to that contemplated in Texas) to disconnect
service for nonpayment of the gas service bill (including the pass through
of the distribution charges) for the Atlanta Gas Light (AGL) competition program.
However, the Georgia natural gas program has also documented massive billing
failures by marketers (delayed bills, inaccurate bills) and extensive publicity
concerning slamming complaints which have resulted in fines and penalties
for some marketers. Furthermore, the AGL program requires a Universal Service
Fund (USF) that allows marketers to be reimbursed for uncollectible expenses.
The USF rules require a marketer to use credit reporting (credit scoring),
deposits, late fees, and collection notices to reduce its uncollectible costs
prior to reimbursement from the USF. Pennsylvania, which arguably has the
most successful retail electric program in the nation, has consistently prohibited
disconnection of service as a collection tool for its competitive electric
and natural gas providers. If the TDU bills customers for a REP's competitive
energy services, the REP's charges are not included in a disconnection notice
issued by the TDU. If the REP issues the bill directly to the customer, the
REP cannot issue a disconnection notice for its competitive charges and has
the option of sending the customer back to POLR service (terminating the contract)
if the customer does not pay for electric service. However, the POLR can continue
to deliver, bill, and collect its regulated POLR services with current consumer
protection rules, including the right to disconnect. Therefore, competitive
providers are limited to competitive debt collection techniques. Under this
approach, as of October 1, 2000, 33% of Duquesne Light's residential customers
in Pittsburgh have switched to alternative providers. About 15.0% of PECO
Energy's residential customers have switched in Philadelphia (These statistics
are compiled by the Pennsylvania Office of Consumer Advocate and published
quarterly on its website: http://www.state.pa.us/PA_Exec/Attorney_General/Consumer_Advocate/index.htm.
Clearly, there are many electricity providers who are willing and able to
participate in a competitive market without the use of disconnection as a
debt collection tool. The lower levels of customer participation in electric
competition in the other utility service territories in Pennsylvania suggests
that the key ingredient for the success of retail competition is not the power
to disconnect service, but the "headroom" between the default provider's prices
and those available in the competitive market.
Fourth, it would be difficult for the commission to track the incidence
of disconnection or investigate disputed disconnections (or failures of reconnection)
without contacting the ordering REP, the TDU, and (potentially) the serving
REP (if different from the ordering REP). The volume of disconnections and
reconnections could be reported by the TDU, but the reasons, amount overdue,
frequency of notice, and other aspects of the disconnection process will be
in the hands of multiple REPs.
Finally, REPs cannot have both the benefit of unregulated prices and competitive
market and the right to use debt collection rules devised for a monopoly and
regulated price environment. Competition carries risks, including nonpayment.
The "economic analysis" submitted by REP Coalition from Professors Weinstein
and Clower does not contain any analysis of the economics of selling electricity
in a competitive market, and does not reference any information or facts about
the sale of electricity without the right of disconnection in every other
state. Because utilities have relied upon disconnection notices to inform
customers that the bill must be paid to avoid penalties, customers have "learned"
to respond to these notices. The new REPs will have to "teach" their customers
that failure to pay the REP will lead to termination of contract, potential
transfer to POLR service, and the use of traditional debt collection devices.
The commission disagrees with REP Coalition that prohibiting REPs from
disconnecting customers for non-payment will result in providers expediting
the process of dropping customers to POLR. Section 25.482 provides for the
same timeline for termination of contracts as §25.483 provides for POLR
to disconnect. In other words, an affiliated or non-affiliate REP can drop
a delinquent customer in the same timeline as POLR can disconnect that customer.
The commission's rules on termination and disconnection do not require REPs
to terminate or disconnect customers, but permits them to do so and allows
for policies that are more generous to the customer.
However, to mitigate the potential negative impact to a REP's uncollectibles,
the commission adopts a more generous credit and deposit policy for the affiliate
REPs. Additionally, the commission believes that the requirements for a bill
payment assistance program and levelized bill plans may help customers make
timely payments and avoid termination. The commission declines to modify the
rules for the amount of the deposit collected by the POLR and when such deposits
must be refunded to customers, since the POLR maintains the right to disconnect
service for non-payment of electric charges.
REP Coalition, Reliant, and TNMP recommended changes throughout this section
to clarify that providers can authorize a disconnection, but only TDUs can
physically cut off service. TEC likewise suggested changes to recognize that
a physical disconnection may also be made by a municipally owned utility or
electric cooperative.
The commission adopts REP Coalition's, Reliant's, TNMP's and TEC's recommended
changes to clarify that only a TDU, municipally owned utility, or electric
cooperative may physically disconnect and reconnect a customer's electric
service.
AEP Energy Services and Reliant said that because a POLR service also provides
other REP services, a customer's status could change even though the customer
remains with the same provider, and argued that this could produce a potentially
confusing or seeming illogical application of the rules. For example, if a
provider terminates a customer's contract because of nonpayment, as allowed
by the proposed rules, the customer may be transferred to POLR service. As
a result, they said, a provider that also provides POLR service may terminate
a customer for nonpayment only to find that it must continue to serve the
customer as the POLR provider, despite the fact that service has been terminated
and the bill remains unpaid. If the customer is subsequently disconnected
under POLR service, the proposed rules require the provider of POLR service
to reconnect the customer, even though the provider is owed additional money
for the original delinquent electric service. AEP Energy Services proposed
that the commission confirm that the proposed rules will require a separation
of the POLR and non-POLR REP functions in order that all REPs providing competitive
services are treated in the same manner when they interface with the POLR.
They did not advocate specific language in the rule, but suggested that a
general policy statement be included in the preamble.
The commission agrees with AEP Energy Services that POLR must interact
with all REPs in the same manner, without preference or bias for customers
served by the provider affiliated with the POLR.
In reply comments, REP Coalition proposed that all providers should be
subject to the same requirements as POLR for evaluating a customer's credit
worthiness and charging deposits, and for offering payment plans to balance
the right of all REPs to disconnect a customer. REP Coalition said if the
commission does not grant all providers the right to disconnect, then several
other rules would have to be changed to minimize REPs' bad debt exposure.
These included the right to charge residential customers a late fee (see discussion
on §25.480(b)), the right to apply a customer's deposit to a final bill
(see discussion on §25.478(k) and (h)), allowing providers to develop
their own non-discriminatory credit requirements (see discussion on §25.478(a)),
and increasing the maximum deposit to the two highest months of estimated
billing rather than one-sixth of the estimated annual billing (see discussion
on §25.478(f)). In reply comments, Reliant also said that variations
to the original REP Coalition proposal for giving all REPs the right to disconnect
would require changes to the above sections. The variations included allowing
a REP to reconnect their customer who was disconnected by that customer's
previous REP for nonpayment of a final bill, or limiting a REP's right to
disconnect to only its current customers and not for final bills when the
customer has already switched.
The commission makes specific determinations in each of the sections listed
above. The commission declines to adopt Reliant's suggested variations on
the disconnect policy.
In reply comments, Reliant proposed that if the commission does not implement
REP Coalition's original proposal to allow all REPs the right to disconnect,
then, at a minimum, the commission should allow affiliate REPs to disconnect
the residential and small commercial price to beat customers they receive
by default after competition begins. They also suggested that affiliate REPs
should be allowed to disconnect customers for final bills from either the
affiliate REP or the former integrated utility, to disconnect customers who
switch to another REP, and to prevent reconnection until the customer pays
the affiliate REP or agrees to payment arrangements. Reliant argued that if
this proposal is not adopted, the additional credit and deposit restrictions
placed on the affiliate REP but not other REPs should be reduced. Since the
price to beat is based on the integrated utility rates in effect on January
1, 1999, which inherently incorporates the bad debt risk associated with the
ability to disconnect, Reliant said affiliate REPs should have the same disconnect
rights. This risk is low because the ability to disconnect dramatically reduces
the number of customers who ultimately fail to pay or make payment arrangements.
Under Reliant's proposal, new providers, affiliate REPs operating outside
the service territory of its affiliated TDU, and affiliate REPs serving returning
price to beat customers inside the service territory of its affiliated TDU
would not be allowed to disconnect non-paying customers, but could use credit
screening and deposit tools to manage risk of non-payment. Reliant pointed
out that the commissioners decided in the June 14, 2000 open meeting that
affiliate REPs would be obligated to serve initial price to beat customers
"under the current terms and conditions, including the current customer protection
policies, applicable to the former electric utility at the onset of competition…."
They said that "the restructuring models of all other states regulate the
default provider and allow such recovery in that entity's rates and/or provide
for system benefit fund recovery." Without the ability to disconnect, Reliant
argued that Texas would be the only state with an unproven disincentive for
non-payment and no mechanism for the default provider to recover unavoidable
bad debt costs. This situation would be compounded by the procedures and requirement
leading up to the introduction of choice. Affiliate REPs will be required
to serve all residential and "small commercial" customers who do not select
another REP. Affiliate REPs will have no opportunity to pre-screen these customers
for credit risk, nor will they be allowed to deny service to any of them.
Since other REPs will have these rights, they will likely focus on and market
to the customers with acceptable credit scores, leaving the affiliate REPs
with the remaining higher credit risk customers. Thus, Reliant argued, affiliate
REPs would lose many of the customers that would otherwise help limit the
financial impact of higher risk customers.
Reliant also argued that affiliate REPs should be allowed to disconnect
customers for non-pay because, otherwise, it would have no choice but to drop
customers to the POLR after the customer misses one payment. The POLR would
then "refuse to provide service" and require the customer to pay a deposit.
If the affiliate REP is also the POLR, this will likely confuse customers,
said Reliant. Thus, Reliant said its proposal would result in more customers
being served by the affiliate REP at the price to beat as opposed to being
served by the POLR at the higher rate.
PURA §39.102(a) states that the affiliate REP of the electric utility
serving a retail customer on December 31, 2001,
may
continue to serve that customer until the customer chooses service
from a different REP. Additionally, PURA §39.106 specifically establishes
a POLR who is obligated to offer any requesting customer a standard retail
service package at a fixed, non-discountable rate approved by the commission.
As such the POLR is the default provider for retail customers, and as a result
is allowed to disconnect non-paying customers because it must offer service
to all customers requesting service. In contrast, the price to beat was established
to promote competitiveness of the retail electric market. It is not based
on an affiliate REPs exposure to risk; instead it is designed to be a fixed
rate to provide headroom for other providers to beat. The commission therefore
determines that affiliate REPs do not have the same obligation to serve as
the POLR, and should, therefore not be allowed to disconnect customers. This
prohibition on disconnection also applies to final bills, hereby defined as
the last billing cycle in calendar year 2001, issued to customers by the electric
utility. It is expected that customers will have transitioned to either the
affiliate REP or a competitive retailer during the first billing cycle of
2002, and as such, a customer should not be subject to disconnection by an
entity other than their current REP. To the extent final bill amounts are
transferred from the electric utility to its affiliate REP, the customer would
still only be subject to termination by the affiliate REP, should the customer
fail to pay these transferred charges.
Allowing the affiliate REP to disconnect when none of its competitors has
this right does not promote a level playing field. The commission disagrees
with Reliant's argument that the price to beat would be lower if affiliate
REPs are allowed to disconnect because it reduces the number of customers
who ultimately fail to pay or make payment arrangements. This is an inherently
anti-competitive argument, because new providers would have to try to undercut
the price to beat rate, but would not have the "benefit" of disconnecting
customers. In other words, new providers would have higher costs associated
with risk of nonpayment that the affiliate REP would not have, lowering headroom,
and stifling new providers' ability to entice customers with lower electric
rates. Even further, the commission finds that Reliant's argument to allow
only the affiliate REP to disconnect customers who switch to another REP and
fail to pay their final bill to the affiliate REP, and the right to prevent
reconnection until the customer pays the affiliate REP is even more anti-competitive.
Affiliate REPs start out with the overwhelming advantage of automatically
getting almost all of the customers when competition begins. This proposal
would give affiliate REPs the sole power to prevent customers from switching
and exercising their right to choose a new competitor. The commission finds
that all REPs will have the same debt collection methods available to them
and which are available to every other kind of company in a competitive market.
PURA outlines several requirements to mitigate this market power. One of
these is the requirement that the affiliate REP must offer the price to beat
to residential and small business customers in its home service area for the
first five years of competition. Further, the affiliate REP may not offer
those customers any other price until the earlier of 36 months after competition
begins or when 40% of the residential or small commercial load is served by
non-affiliate REPs. Allowing affiliate REPs, but not other providers, to disconnect
customers directly contradicts the purpose of the price to beat period. As
demonstrated by the successful Pennsylvania electric competition program,
the key ingredient for the success of retail competition is not the power
to disconnect service, but the headroom between the default provider's prices
and those available in the competitive market.
The commission disagrees with Reliant's argument that the affiliate REP
will be left with high-risk customers because it cannot pre-screen customers
automatically transferred from the former integrated utility. The affiliate
REP, like all other providers, can "drop" non-paying customers to the POLR;
the rules do not require the affiliate REP to bear any kind of additional
burden of serving non-paying customers.
Finally, Reliant said that the affiliate REP would "have no alternative"
but to drop customers to the POLR after the customer misses one payment to
minimize its bad debt risk. As discussed above, this is precisely the reason
the commission has determined that allowing providers to disconnect will increase
the number of actual disconnections. After the first three years, the affiliate
REP will be offering competitive prices, in addition to the price to beat,
to customers in its home service area. The competitive nature of the market
means that in order to minimize risk, REPs will be more likely to not use
discretion in actually ordering physical disconnection. Also, if the affiliate
REP is also the POLR, then POLR service will be the price to beat rate. Therefore,
customers dropped from the affiliate provider to the POLR will not pay a different
rate for electric service.
Texas is unique in that the affiliate REP and the POLR provide two distinct
functions; they are not interchangeable as "default service." In other states,
the affiliated provider was automatically the POLR. Taking that into account,
the commission's position that only the POLR should be allowed to disconnect
customers and is required to offer service at a regulated rate that takes
its obligation to serve all customers into account is consistent with every
other state's rules for the POLR. PURA requires that the POLR provide service
to all customers, creating an inherent risk of bad debt. The commission expressed
concern in the preamble to §25.43, relating to Provider of Last Resort,
that if an affiliate REP is designated to provide POLR service at the price
to beat rate, it would not be able to recover its cost of service. Therefore,
the commission precluded affiliate REPs from bidding to provide POLR service
in their affiliated TDU service area for the first five years after competition
begins. Further, the commission decided to not appoint an affiliate REP to
provide POLR service in its affiliated TDU service area unless no other REP
submits a bid or unless no other bidders qualify to serve as POLR. The affiliate
REP is intended to be more like other competitive providers, not like the
POLR. Any certified REP may be designated to provide standard POLR service
at a regulated rate.
The commission also finds that allowing the affiliate REP to disconnect
only the initial price to beat customers, which is only applicable for the
first five years at the most, is not a sound long-term policy if the commission's
goal is to establish a robust competitive market. Instead, it would create
confusion for customers and make it nearly impossible for the commission to
investigate customer complaints regarding wrongful disconnection.
Consumer Commenters suggested that when a customer is sent to POLR service,
POLR should be required to send that customer a notice that says the customer's
former provider disconnected service due to nonpayment or abandonment. The
notice should also inform the customer of the right to choose another provider
and file a complaint with the commission if the disconnection notice was issued
improperly.
The commission determines that requiring POLR to send out a notice to its
new customers is unnecessary and declines to make this change because proposed §25.482(c)
already requires a REP that terminates a contract to provide such information
in its termination notice.
REP Coalition, Reliant, TXU Retail, Enron, AEP Energy Services, TNMP, SPS,
and Entergy Texas REP said that the rules should clarify that, in addition
to disconnection, only TDUs have the right to perform "reconnections." TEC
suggested changes to recognize that a physical disconnection may also be made
by a municipally owned utility or electric cooperative. Further, TXU TDU and
TXU Retail suggested changes to the second sentence to clarify that disconnections
will be performed under the utility's Tariff for Retail Delivery Service.
The commission agrees with TEC, TXU TDU, and TXU Retail and adopts changes
to clarify that only a TDU, municipally owned utility, or electric cooperative
may physically disconnect and reconnect a customer's electric service. The
commission also adopts TXU TDU's and TXU Retail's recommended changes regarding
the standard Tariff for Retail Delivery Service.
REP Coalition, Reliant, SPS, TNMP, AEP Energy Services, and Entergy Texas
REP proposed changes to allow all electric providers to authorize the disconnection
of a customer's electric service, even if that customer has already switched
to a new provider-what they refer to as a "final bill disconnect." AEP Energy
Services and AEP TDUs said that this provision is especially important for
affiliate REPs because, in the initial days after competition begins, customers
will be switching from their affiliate REP to a new provider. AEP TDUs suggested
in reply comments that this issue should be taken up in an expedited project
to deal with transition billing issues. Enron and Shell agreed with REP Coalition
that all REPs should be allowed to disconnect for electric service, but opposed
language that would allow a provider to disconnect for a final bill. Consumer
Commenters also opposed the proposal for the final bill disconnect.
Enron said this provision would grant a REP the right to disconnect another
provider's customer and argued that this provision provides opportunities
for abuse, is anti-competitive, and would cause customer confusion and panic.
Enron and Consumer Commenters said that this provision would disempower customers
and would be essentially the same as blocking a switch. Consumer Commenters
said that there will be disputes between customers and providers. They argued
that customers should be free to leave a provider when dissatisfied. If another
provider is willing to offer service, even at a higher price, the customer
should have the option of purchasing electricity from that new provider.
Enron and Consumer Commenters said that providers have existing alternatives
to collect a final bill or at least limit their risk for customers defaulting
on final bills. Enron cited PURA §39.101(f) in arguing that allowing
providers to disconnect for a final bill is in direct conflict with the intent
of SB 7 and would erode the customer protection rights applicable to customers
today. Under the proposed rules, providers have the ability to review a customer's
creditworthiness and to charge a customer a security deposit if credit standards
are not met. Further, they said, REPs can pursue all available legal remedies
against a non-paying customer for their final bill, such as using debt collection
agencies or pursuing their rights in small claims court.
REP Coalition, Reliant, SPS, TNMP, and Entergy Texas REP also proposed
that all electric providers be required to provide customers an opportunity
to avoid disconnection by agreeing to alternative payment plans of the type
the POLR is required to offer.
The commission agrees with Enron and Consumer Commenters that allowing
REPs to order the TDU to disconnect a customer even if that customer has already
chosen another provider is anti-competitive and should not be adopted. Allowing
providers to disconnect another provider's customer has a more harmful effect
than an earlier proposal to block a switch of a customer who has not paid
his or her current provider. Customers have the right to freely exercise their
right to choose in a competitive market. Those customers who do not pay a
provider for service risk bad credit and higher rates in the future, but they
should not be prevented from receiving service from another provider that
is willing to serve them.
It is a fundamental error of public policy to allow a competitive entity
to block service provided by other competitors as a condition of payment for
service. No competitive entity has this power in other unregulated businesses.
K-Mart cannot prevent a customer from seeking a credit card from Sears prior
to paying an overdue amount owed to K-Mart. The proliferation of niche marketers
of credit card services is ample proof that customers of various credit profiles
can obtain access to credit services without the ability of any one creditor
to prevent the customer from entering the competitive market. Credit card
suppliers must carefully weigh the amount of bad debt they can accumulate
and build into the cost of doing business. Some creditors aim at "big spenders"
and others aim toward low volume spenders with credit history problems. The
same will probably be true of competitive energy providers. Whether this development
is welcome or not, the power of competition does not typically carry with
it the power to cut the customer off from all other competitors as a means
of debt collection to deny access to a service.
In the proposal, there is no time limit for a REP to order the disconnection
of a customer for a final bill. A customer who is current on his electric
bill with the current REP could be physically disconnected for nonpayment
of an old bill owed to a former REP. Again, the inherent discretion used by
electric utilities today will be exercised in a totally different manner in
a competitive market with multiple providers compared to the public duty and
obligations inherent in the operations of a public utility. A REP that disconnects
a customer for a final bill will have absolutely no interest in getting the
customer reconnected to another REP and so will have no interest in negotiating
with the customer to obtain partial payment or deferred payment plans.
Reliant noted that they believe the authorization to disconnect will be
at least ten days prior to actual disconnect.
The commission amends this section to clarify that POLR may only authorize
the TDU to disconnect a customer after the ten day notice has passed. The
POLR may not authorize the TDU to disconnect a customer at the same time it
sends a disconnect notice to a customer.
TIEC said that the danger of disconnecting industrial plants without notice
needs to be addressed, because such disconnections pose serious health and
safety concerns to the customers' employees and to the public. They said that
current utility practice is to provide notice to these facilities before intentional
interruptions, let alone disconnections, so that the customer can safely shut
down its facility. AEP Energy Services and TXU Retail disagreed with this
proposal. AEP Energy Services said that this proposal has no counterpart in
existing commission rules and should not be adopted. They said the TDU has
no way of determining if disconnection would create a dangerous or life-threatening
condition on the customer's facility. They argued that TIEC's proposed language
would suggest that the TDU might have a responsibility to know about the existence
of such a hazard and liability if disconnection were to occur. It should be
the customer's duty to plan for service interruptions that occur without notice,
whether the circumstances causing them are beyond the control of the REP or
pursuant to commission rules. Industrial customers and the provider can negotiate
specific provisions to meet such needs in individual contract negotiations.
The commission determined at the November 16, 2000 open meeting, while
addressing Project Number 22187, that the responsibility for knowing whether
there is a danger associated with disconnection of a customer lies with the
REP. The commission agrees with AEP Energy Services that industrial customers
and the provider can negotiate specific provisions in individual contract
negotiations that meet the needs of both parties in these situations.
REP Coalition, Reliant, and TNMP recommended changes in subsection (d)(5)
to remove the language about required average billing payment. They added
in subsection (d)(7) language about a payment arrangement agreed to between
the REP and the customer. They added subsection (d)(8), which would prohibit
providers from disconnecting a customer's electric service where service was
physically disconnected at a premises for the non-payment of the same REP's
bill.
The commission adopts the recommended changes in subsections (d)(5) and
(7). The commission declines to add REP Coalition's, Reliant's and TNMP's
proposed subsection (d)(8).
REP Coalition, Reliant and TNMP suggested adding the TDU's personnel would
have to be available to take payments and reconnect service. In reply comments
TXU TDU and Entergy suggesting clarifying REP Coalition's changes to clarify
that the provider would request a disconnect and the provider would accept
payments. TXU TDU pointed out that the Tariff for Retail Delivery Service,
section 5.3.6.4(1)(A), published in Project Number 22187, prohibits a TDU
from disconnecting or suspending delivery of service if its personnel are
not available to reconnect and that this section should prohibit a provider
from requesting disconnection.
The commission clarifies this section so that it is clear that the POLR
is prohibited from ordering a disconnect on these days unless its personnel
are available to take payments and the TDU's personnel are also available
to reconnect service. This will ensure consistency with the TDU's tariff for
Retail Delivery Service.
REP Coalition and TNMP proposed deleting the section on abandonment. Reliant
noted that if this section is not deleted, then the term "service provider"
in the title should be changed to "REP".
The commission disagrees that this section should be deleted, but adopts
the clarifying change to the title of the section suggested by Reliant.
AEP TDUs said the provision relating to disconnecting electric service
to ill and disabled customer is contained in section 5.3.6.4 of the Standard
Terms and Conditions in Project Number 22187. They suggested that the REP
or registration agent should be responsible for administering this section
because many parties oppose the TDU having possession of customer information.
The commission determines that it is the responsibility of the REP to not
request a disconnect of electric service to ill or disabled customers who
meet the requirements of this section. The TDU will not have such customer
information, and only has the responsibility to carry out disconnection requests
from REPs.
In subsection (i)(1), Consumer Commenters added language that would redefine
"extreme weather emergency" as a time when the previous day's highest temperature
is below 23 degrees Fahrenheit and is expected to remain there, "for any county
in the provider's service territory." They also added to subsection (i)(2)
that would prohibit providers from disconnecting service when the National
Weather Service issued a cold advisory as well as a heat advisory for any
county in that provider's service territory. In reply comments, Reliant, Entergy
Texas REP, and TXU Retail opposed these changes because prohibiting disconnections
for heat and cold throughout an entire service area is much too broad.
In contrast, SPS, TNMP, and AEP Energy Services proposed limiting the area
in which a provider could disconnect customers during extreme weather emergencies
to only those counties within its service territory that meet the conditions
stated in this section. In reply comments, AEP TDU and TXU Retail agreed with
this suggestion. In reply comments, Entergy Texas REP also suggested that
the prohibition on disconnection during extreme weather apply only to "at-risk"
customers, ill and disabled customers, and not to all customers in the affected
area.
The commission agrees with the changes proposed by SPS, TNMP, AEP Energy
Services, and AEP TDUs to limit the extreme weather disconnection prohibition
to the county in which the situation exits. However, the commission declines
to adopt the change proposed by Entergy Texas REP to make this prohibition
applicable to only "at-risk" customers. The commission determines that REPs
should be prohibited from disconnecting a customer for non payment in a county
in which an extreme weather emergency occurs. The definition of "extreme weather
emergency" in PURA §39.101(h) is the same as §25.29(i) of this title
(relating to Disconnection of Service), except that the current rules refer
to the utility's service area and PURA says "relevant" service area. Because
REPs will not have geographic service territories as utilities do, the commission
determines that prohibiting disconnections by county is the most administratively
feasible alternative in a restructured market. Also, the commission determines
that changes recommended by Consumer Commenters are too broad. Providers could
be certified to provide service for the entire state; it is not reasonable
to prohibit disconnections for customers in Houston because of the temperature
in Dallas.
AEP TDUs and Reliant said a similar extreme weather emergency provision
is contained in section 5.3.7.4 of the Standard Terms and Conditions in Project
22187. AEP TDUs suggested that the REP or registration agent should have responsibility
for administering this section because many parties oppose the TDU having
possession of customer information. But Reliant specifically added language
that would require the TDU to administer this section.
The commission determines that a REP has the responsibility to not request
a disconnection of a customer's service during an extreme weather emergency.
Likewise, the transmission and distribution Standard Terms and Conditions
Tariff section 5.3.7.4 says, "Company shall not suspend or disconnect Delivery
Service to a Retail Customer for non payment during the following "extreme
weather conditions," as defined in the customer protection rules."
Consumer Commenters said that providers should be required to monitor weather
conditions and have a system for reporting the presence of a weather emergency
to employees, energy assistance agencies, and the commission (see discussion
on preamble Question 9).
AEP TDUs said that if the commission imposes a moratorium on disconnections
in the summer of 2001, and a customer incurs a deferred payment balance, the
commission should require that any such balance be paid in full by December
31, 2001. They also said the TDU should retain, beyond January 1, 2002, the
right to initiate collection activities, including written and oral communications
with the retail customer and the right to disconnect the retail customer for
failure to pay balances existing on January 1, 2002. They proposed that the
TDU be required to notify the registration agent three business days prior
to disconnecting a retail customer. In reply comments, TXU TDUs agreed and
added that the successor to the integrated utility (affiliate REP) or the
"entity responsible for the utility's accounts receivables" should have the
right to disconnect a customer even if the bill is issued after January 1,
2002, and even if the customer has switched to a REP other than the affiliate
REP. They argued that customers should not be allowed to avoid paying their
former integrated utility for charges incurred before competition, because
they will have the right to choose a new provider at the time the bill is
issued. Further, they said the affiliate REP should not be forced to write
off potential significant amounts of uncollectible charges.
As discussed in response to Question 9, the commission declines to adopt
any additional requirements for "prolonged heat events."
Consumer Commenters said that disconnection notices should include standard
information about customer protections regarding disconnection. This included
information on when disconnections are prohibited, the customer's right to
switch providers, and the right to file a complaint with the commission.
The commission agrees that the POLR should include specific information
in its disconnection notices. The commission adds new subsection (l) "Contents
of disconnection notice," which specifies such information.
REP Coalition, Reliant and TNMP proposed language that would require providers,
after a customer satisfactorily corrects the reasons for disconnect, to "promptly
notify" the TDU to reconnect the customer's electric service. Reliant also
suggested adding §25.474(i)(2), relating to an expedited switch or reconnect.
The commission determines that REP Coalition's proposal for "prompt reconnection"
does not adequately protect customers in the competitive market. Under this
proposal, the customer would have to agree to a series of waivers of notice
and the normal use of the monthly switching schedule to get the customer reconnected
with the REP that disconnected service. Nothing would prevent REPs from charging
the customer fees for activities, such as a special meter reading. It is also
not clear how this system would work if the customer does not want to reconnect
with the REP who ordered the disconnection. Even if the disconnected customer
paid the REP in full, the customer would either have to waive certain customer
protections to be immediately reconnected or do without service to await the
normal switch time to go to another REP. This effectively locks a customer
into a contract with the former REP and limits the customer's right to choose
a new provider.
The commission agrees with REP Coalition, Reliant, and TNMP that a reconnection
section is needed to clarify that the POLR would be placing an order with
the TDU to disconnect and reconnect a customer's service. However, the commission
determines that it is necessary to further clarify the time frame in which
POLR's would have to notify the TDU to reconnect a customer.
§25.484, Do Not Call List.
Consumer Commenters supported the proposed Do Not Call List, and recommended
it be amended to also cover door-to-door sales, emails, unsolicited faxes,
and direct mail communications. TXU Retail replied that the logistics of Consumer
Commenters proposal needed further exploration. TXU Retail stated PURA did
not prohibit face-to-face contact in malls and other public places and noted
problems would occur in situations where more than one unrelated person resided
in a household (for example, college students sharing housing). Finally, TXU
Retail questioned whether such a problem really existed to create a Do Not
Contact List.
The commission notes that PURA §39.1025 places limitations exclusively
on telephone solicitations, and declines to expand this authority to create
a Do Not Contact List.
Entergy Texas REP and Reliant noted that by using the term REP, the rule
excluded affiliate REPs and suggested the term electric service provider replace
REP in subsections (a) and (b). Reliant further suggested the rule should
apply to all parties who may be using telemarketing in the marketing of electric
service including aggregators and any agent of an aggregator or electric service
provider.
The commission agrees with parties and revises the rule to be applicable
to all REPs. The commission also prevents any party from soliciting electric
service to customers on the Do Not Call List and makes subsections (a) and
(b) applicable to aggregators and any agent of a REP or aggregator.
Reliant also recommended that parties subject to the prohibitions of calling
customers on the Do Not Call List should not call customers on the Do Not
Call List within two business days from the date the list is made available
to the party.
The commission modifies Reliant's recommendation and allows parties five
calendar days to remove customers on the Do Not Call List from their calling
lists.
AEP TDUs and TXU TDU recommended the commission clarify that the TDU is
not the appropriate entity to act as the designated agent to maintain the
Do Not Call List as the list has no relationship to the functions performed
by the TDUs, and asserted the registration agent should create and maintain
the list.
The commission agrees with parties and clarifies that the Do Not Call List
shall be maintained through the registration agent.
§25.485, Customer Access and Complaint Handling.
AEP TDUs recommended clarifying proposed subsection (a)(1), which requires
a REP or aggregator to provide reasonable access to "its" service representatives
to make inquiries and complaints, among other things. They point out that
the draft terms and conditions of TDUs retail distribution service allow a
REP to instruct its customers to contact the TDU directly to make outage complaints
and/or inquiries (See, Project Number 22187,
Terms
and Conditions of Transmission and Distribution Utilities' Retail Distribution
Service
). However, at the October 16, 2000 workshop, AEP TDUs agreed
that REPs should provide reasonable access and that REPs and customers should
have access to the TDUs.
The commission finds that a REP must still ensure reasonable access to
its service representatives to direct the customer to the TDU, when necessary,
and to respond to other inquiries. This applies even if the customer is supposed
to contact the TDU directly, in accordance with the standard terms and conditions
developed under Project Number 22187. Accordingly, the commission declines
to make changes to the rule.
In proposed subsection (a)(3), TXU TDU, Reliant, and AEP TDUs recommended
clarifying that the REP must inform its customers how they are to report outages.
The commission agrees with this recommendation, and has amended the rule
accordingly.
According to TEC, the requirement in proposed subsection (a)(4) that a
REP employ 24-hour capability for accepting customer contract cancellation
by phone is unduly burdensome from both an administrative and cost perspective
for most electric cooperatives and municipally owned utilities. Moreover,
TEC contends that the imposition of such a requirement is outside of the commission's
jurisdiction. Pursuant to PURA §40.055(a)(1) and §41.055(1), the
governing bodies of municipally owned utilities and electric cooperatives
have exclusive jurisdiction to set all terms of access, conditions, and rates
applicable to services provided by the municipally owned utility and electric
cooperative, respectively.
The commission disagrees with TEC that this requirement is unduly burdensome
and is outside the commission's jurisdiction. As discussed in response to
Question 7, the commission's rules apply to all REPs, including municipally
owned utilities and electric cooperatives operating outside their certificated
service area. Therefore, the commission declines to provide an exception in
proposed subsection (a)(4).
At the end of subsection (a)(4), Reliant proposed adding the clarifying
phrase "pursuant to Rights of Cancellation (§25.474(h))."
The commission agrees with Reliant's recommendation, and has amended the
rule accordingly.
Reliant recommended amending proposed subsection (b) to remove restrictions
on alternative dispute resolution, asserting that this unnecessarily restricts
the REP's ability to use alternative dispute resolution. According to Reliant,
requiring alternative dispute resolution in the terms of service does not
restrict the customer's right to file a formal or informal complaint with
the commission, nor does it restrict the commission's right to address the
complaint. In reply, Entergy Texas REP supported Reliant's recommendation.
Reliant also suggested adding language to provide the REP the opportunity
to first remedy a customer complaint before it is filed with the commission.
The commission disagrees with the recommended changes, and notes that proposed §25.485(b)
does not preclude a REP from using alternative dispute resolution. Rather,
it states that the REP is not allowed to require the customer to use this
method. In addition, the commission finds it is inappropriate to require a
customer to first make a complaint to the REP. The customer should have the
freedom to make a complaint to whomever the customer chooses.
In proposed §25.485(b), TEC recommended adding "in any" after customer's
right in the first sentence to indicate that the customer may not have a right
to make a complaint to the commission.
The commission disagrees with the suggested change, because it is not necessary
to restrict the customer's right to make a complaint.
The State of Texas recommended that the requirements in proposed subsection
(b) apply to complaints to be submitted to arbitration or mediation by third
parties. Also, in proposed subsection (c), the State of Texas suggested that
customers or customers who are dissatisfied should also be informed of their
right to complain to the Office of the Attorney General, Consumer Protection
Division.
The commission agrees with the State of Texas' recommended changes and
has amended the rule accordingly.
In proposed subsection (c), Consumer Commenters proposed changes to require
the REP to initiate the supervisory review process automatically in response
to a customer complaint, prior to advising the customer of the results of
the investigation. In addition, Consumer Commenters suggested that the final
decision be communicated to the complainant orally and in writing within five
business days of the request. In its reply comments, AEP Energy Services argued
that Consumer Commenters' proposed changes are confusing and should be rejected.
AEP Energy Services stated that the proposed changes seem to require two different
time periods for advising the complainant of the outcome of the same review.
The commission disagrees that it is necessary to require a REP to initiate
supervisory review in all customer complaint cases. For complaints that cannot
be resolved satisfactorily, the customer will still have the option to file
a complaint with the supervisory review process, and ultimately, with the
commission. The commission also finds that five days is not adequate for the
REP to investigate the complaint through the supervisory review process. It
is not necessary to require REPs to submit all responses in writing.
Consumer Commenters suggested streamlining the commission's complaint process
as outlined in proposed subsection (d). They favor substituting telephone
hearings, as used by the Texas Workforce Commission, in place of the commission's
informal complaint procedure. This alternative would allow an administrative
law judge to ask questions of the complainant and company and to make a formal
ruling. Consumer Commenters pointed out that after a customer has complied
with the company's procedures and waited for over a month for a decision,
the commission's informal complaint process should be by-passed. According
to these organizations, the informal complaint process provides an additional
21 days for the company to inform the commission of its decision, based on
the same information received previously. Therefore, Consumer Commenters argued
that the informal complaint process adds additional time and effort without
reaching a final conclusion.
The commission disagrees with Consumer Commenters' recommendation to substitute
its informal complaint process with telephone hearings. The informal complaint
process provides an opportunity for the commission to independently investigate
both the customer's and REP's positions. Moreover, experience has shown that
some customers avoid the utility's complaint process, and make complaints
directly to the commission. Therefore, the commission finds that the informal
complaint process is a necessary step to be continued in a competitive marketplace.
In proposed subsection (d)(1)(A), Consumer Commenters suggested deleting
the words "upon request" to require the REP to advise the complainant of the
commission's contact information.
The commission agrees with Consumer Commenters suggestion, and has amended
the rule accordingly.
§25.491, Record Retention and Reporting Requirements.
TEC and MOU Commenters proposed excluding electric cooperatives and municipally
owned utilities from the record retention and reporting requirements contained
in §25.491. They contend that the commission does not have jurisdiction
to impose these requirements on electric cooperatives and municipally owned
utilities, pursuant to PURA §40.004(7) and §41.004(5).
As discussed in response to Question 7, the commission agrees that it cannot
require electric cooperatives and municipally owned utilities to submit reports
for reasons other than those specified in PURA §40.004(7) and §41.004(5).
The commission amends this section accordingly.
In proposed subsection (a)(3), TXU Retail suggested changing the timeline
for record submittal from five to 20 days, the standard for responding to
discovery requests in commission proceedings. Also in subsection (a)(3), REP
Coalition recommended substituting "calendar" for "business" days.
As discussed in response to Question 1, the commission agrees with TXU
Retail that the timeline should be extended. However, it has amended the rule
to allow 15 calendar days, because it is consistent with timelines for submitting
other records to the commission.
REP Coalition and TNMP suggested deletion of the reporting requirement
regarding direct mail solicitations in proposed subsection (b)(1). REP Coalition
believes that data regarding direct mail solicitations is not necessary to
monitor discriminatory practices. According to REP Coalition, direct mail
solicitation is just one method of advertising and is not itself an indicator
of discriminatory practices. SPS and REP Coalition also indicated that this
requirement would pose a significant administrative burden.
In their reply comments, Reliant, Green Mountain, and New Power supported
eliminating the direct mail reporting requirement on the basis that such marketing
data is highly proprietary and should not be subject to commission review.
New Power and Green Mountain further stated that this reporting requirement
exceeds PURA's intent with regard to the monitoring and regulation of certain
REP marketing practices.
In lieu of the reporting requirement for direct mail solicitations, REP
Coalition proposed a new subsection (c) that would provide the commission
authority to receive "additional information" from a REP within 15 days to
investigate an alleged discriminatory practice. The proposed language also
provides the REP with the ability to designate confidential information, and
have such information treated in accordance with the standard protective order
issued by the commission applicable to generating capacity reports. In their
reply comments, New Power and Green Mountain supported REP Coalition's new
"additional information" provision in subsection (c), claiming it provides
a far superior method for the commission to obtain information to investigate
an allegation of discrimination, while reducing the burden imposed upon REPs.
The commission adopts REP Coalition's proposed new language as subsection
(d), with modification, in lieu of the reporting requirement for direct mail
marketing information. The modification requires a REP to provide any information
requested by the commission or the Office of Public Utility Counsel to investigate
an alleged discriminatory practice, including but not limited to, marketing
information. The commission declines to adopt the proposed language for designating
confidential information, because it is duplicative of other commission rules
and procedures. The commission has amended the rule accordingly.
TNMP further proposed changes to the reporting requirements, including:
(1) reporting the number of customers, but not by zip code; (2) eliminating
the reporting of written denial of service notices and the number and total
aggregated dollar amount of deposits held by the REP; and (3) reporting the
number of complaints by category, but not by month. Also, Reliant recommended
that the REP report the number of written denial of service notices only for
residential and commercial customers.
The commission disagrees with TNMP and Reliant and declines to make the
suggested changes. The reporting requirements are consistent with the mandate
in PURA §39.101(d) to ensure REPs comply with the rules.
Consumer Commenters proposed reporting information concerning direct mail
solicitations, denials of service, deposits, and complaints by nine-digit
zip code plus four and by census tract. Consumer Commenters argued this is
necessary to comply with PURA §39.101(d), which states that reports submitted
by REPs must include information regarding the service provided, compiled
by zip code and census tract. Consumer Commenters also recommended eliminating
an exception to reporting by zip code if the registration agent does not have
zip code information. According to Consumer Commenters, reporting by zip code
and census tract will allow the commission to examine discriminatory practices
and other problems within a provider's service territory. Consumer Commenters
contend that the commission, in order to carry out its enforcement duty, must
know who is being served and denied service, as well as the quality of service
provided. In addition, Consumer Commenters suggested revising proposed subsection
(b)(5) to require reporting of the total number of complaints from residential
customers and the number of complaints resolved by the REP.
In reply comments, TXU Retail, New Power and Green Mountain opposed Consumer
Commenters' proposed expanded reporting requirements. TXU Retail argued that
Consumer Commenters' proposed changes are unreasonable and would add significant
costs to all REPs.
With regard to Consumer Commenters proposals to add zip code and census
tract reporting requirements, TXU Retail replied that the commission should
investigate this issue and determine whether the data are available at a reasonable
cost before adopting this provision of the rule.
The commission agrees in part with Consumer Commenters' recommendation,
and has changed the rule to require reporting of residential customers, denials
of service, deposits, and complaints by zip code, and where available, by
census tract. This is consistent with PURA §39.101(d), which requires
reporting by zip code and census tract. The commission has also eliminated
language in subsection (b) that could imply that such zip code information
would be obtained from the registration agent.
In proposed subsection (b)(5), Consumer Commenters recommended including
customer service hold time as an additional category of complaints to be reported.
The commission disagrees with Consumer Commenters and declines to make
the suggested changes. In a competitive market, consumers that are not satisfied
with their current provider's quality of service, such as hold time, should
have the ability to switch to another provider.
§25.492, Non-Compliance with Rules or Orders;
Enforcement by the commission.
TEC and MOU Commenters suggested that proposed §25.492(a) should be
revised to exclude electric cooperatives and municipally owned utilities,
because the enforcement provisions contained in PURA §15.023 and §15.028
do not apply to them.
The commission agrees that the enforcement provisions do not apply to an
electric cooperative or municipally owned utility, and has revised the rule
accordingly.
Reliant recommended adding "notice and" before opportunity in proposed
subsection (a).
In subsection (b), the State of Texas recommended the following changes
to the last sentence to be more consistent with the requirements of SB 86:
"The commission shall coordinate this investigation with any investigation
which may be or has been undertaken by the Office of the Attorney General."
The commission agrees with these proposed changes, and has amended the
rule accordingly.
Consumer Commenters recommended changes to proposed subsection (c) to make
it mandatory that the commission initiate suspension or revocation proceedings
under certain circumstances, including: (1) an above average number of customer
complaints; (2) repetitive slamming and cramming; (3) inappropriate use of
private customer information; (4) failure to comply with the commission rules
regarding termination of service; (5) termination of a customer's service
due to abandonment of a customer contract; (6) distributing inaccurate or
misleading Electricity Facts label or being otherwise engaged in unfair or
fraudulent marketing practices; and (7) failure to comply with the terms and
conditions of a customer's service.
In its reply comments, AEP Energy Services stated that Consumer Commenters'
proposed changes to subsection (c) should be rejected, because the opportunity
to seek certificate suspension or revocation by the commission or by an affected
person is addressed in §25.107(j) of this title.
The commission finds that it should maintain discretion when initiating
a proceeding to consider suspension or revocation of an aggregator's or REP's
certification. However, the commission agrees with the suggestion to convey
the types of situations that may prompt such an investigation. Therefore,
it has amended the rule to reference the circumstances outlined under §25.107(j)
and §25.111(j) of this title regarding suspension and revocation of REP
certification and aggregator registration.
All comments, including any not specifically referenced herein, were fully
considered by the commission. In adopting this section, the commission makes
other minor modifications for the purpose of clarifying its intent.
These sections are adopted under the Public Utility Regulatory
Act, Texas Utilities Code Annotated §14.002 (Vernon 1998 & Supplement
2000) (PURA), which provides the Public Utility Commission with the authority
to make and enforce rules reasonably required in the exercise of its powers
and jurisdiction. The commission also adopts these rules pursuant to PURA §39.101,
which grants the commission authority to establish various, specific protections
for retail customers; §39.102, which provides retail customer choice; §39.1025,
which prohibits telephone solicitation to an electricity customer regarding
the customer's choice of retail electric provider where the customer has given
notice to the commission that it does not want to receive such solicitations,
and which directs the commission to establish and provide for the operation
of a database of customers giving such notice to the commission; §39.104,
which grants the commission authority to use customer choice pilot projects; §39.106,
which mandates the designation of providers of last resort by the commission; §39.107,
which provides for metering services on introduction of customer choice; §39.202,
which provides that an affiliated REP shall offer the "price to beat" to residential
and small commercial customers of its affiliated transmission and distribution
utility; and PURA chapter 17, subchapters A, C and D, which deal, respectively,
with general provisions relating to customer protection policy, the retail
customer's right to choice, and protection of the retail customer against
unauthorized charges.
Cross Reference to Statutes: PURA §§14.002, 39.101, 39.102, 39.1025,
39.104, 39.106, 39.107, 39.202; and PURA chapter 17, subchapters A, C and
D.
§25.471.General Provisions of Customer Protection Rules.
(a)
Application. This subchapter applies to aggregators and
retail electric providers (REPs). These rules specify when certain provisions
are applicable only to some, but not all, of these providers.
(1)
Affiliate REP customer protection rules, to the extent
the rules differ from those applicable to all REPs or those that apply to
the provider of last resort (POLR), shall not apply to the affiliate REP when
serving customers outside the geographic area served by its affiliated transmission
and distribution utility. The affiliate REP customer protection rules shall
apply until January 1, 2007.
(2)
Requirements applicable to a POLR apply to a REP only in
its provision of service as a POLR.
(3)
The rules in this subchapter shall take effect on January
15, 2001.
(4)
The rules in this subchapter are minimum, mandatory requirements
that shall be offered to or complied with for all customers unless otherwise
specified. A customer other than a residential or small commercial class customer
may agree to terms of service that reflect either a higher or lower level
of customer protections than would otherwise apply under these rules. Any
agreements containing materially different protections from those specified
in these rules shall be reduced to writing and provided to the customer. Additionally,
copies of such agreements shall be provided to the commission upon request.
(5)
The rules of this subchapter control over any inconsistent
provisions, terms, or conditions of a REP's contracts or other documents describing
service offerings for residential and small commercial customers or customers
in Texas.
(b)
Purpose. The purpose of this subchapter is to:
(1)
provide minimum standards for customer protection. An aggregator
or REP may adopt higher standards for customer protection, provided that the
prohibition on discrimination set forth in subsection (c) of this section
is not violated;
(2)
provide customer protections and disclosures established
by other state and federal laws and rules including but not limited to the
Fair Credit Reporting Act (15 U.S.C. §1681,
et seq.
) and the Truth in Lending Act (15 U.S.C. §1601,
(3)
provide customers with sufficient information to make informed
decisions about electric service in a competitive market; and
(4)
prohibit fraudulent, unfair, misleading, deceptive, or
anticompetitive acts and practices by aggregators and REPs in the marketing,
solicitation and sale of electric service and in the administration of any
terms of service for electric service.
(c)
Prohibition against discrimination. This subchapter prohibits
REPs from unduly refusing to provide electric service or otherwise unduly
discriminating in the marketing and provision of electric service to any customer
because of race, creed, color, national origin, ancestry, sex, marital status,
lawful source of income, level of income, disability, familial status, location
of customer in an economically distressed geographic area, or qualification
for low-income or energy efficiency services.
(d)
Definitions. For the purposes of this subchapter the following
words and terms have the following meaning, unless the context clearly indicates
otherwise:
(1)
Affiliate retail electric provider--A retail electric provider
that is affiliated with or the successor in interest of an electric utility
certificated to serve an area and who provides retail electric service to
customers inside the geographic area served by its affiliated transmission
and distribution utility.
(2)
Competitive energy services--As defined in §25.341
of this title (relating to Definitions).
(3)
Competitive retailer--A REP, municipally owned utility,
or electric cooperative that offers customer choice in the restructured competitive
electric power market or any other entity authorized to provide electric power
and energy in Texas. For purposes of this rule, a municipally owned utility
or electric cooperative is only considered a competitive retailer where it
sells retail electric power and energy outside its certificated service territory.
Similarly, an affiliate REP is only considered a competitive retailer where
it sells retail electric power and energy outside the geographic area served
by its affiliated transmission and distribution utility. In no event does
this term apply to a REP providing service as the provider of last resort.
(4)
Customer--A person who is currently receiving retail electric
service from a REP in the person's own name or the name of the person's spouse,
or the name of an authorized representative of a partnership, corporation,
or other legal entity; or a person who applies for such service for the first
time or reapplies after discontinuance or termination of service.
(5)
Disconnection of service--Interruption of a customer's
supply of electric service at the customer's point of delivery by a transmission
and distribution utility, a municipally owned utility or an electric cooperative.
(6)
Economically distressed geographic area--Zip code area
in which the average household income is less than or equal to 60% of the
statewide median income, as reported in the most recently available United
States Census data.
(7)
Electric service--Combination of the transmission and distribution
service provided by a transmission and distribution utility, municipally owned
utility, or electric cooperative, and the generation service provided to an
end-use customer by a REP. This term does not include optional competitive
energy services that are not required for the customer to obtain service from
a REP.
(8)
Energy service--As defined in §25.223 of this title
(relating to Unbundling of Energy Service).
(9)
In writing--Written words memorialized on paper or sent
electronically.
(10)
Provider of last resort (POLR)--As defined in §25.43
of this title (relating to Provider of Last Resort).
(11)
Registration agent--Entity designated by the commission
to administer premise information and related processes concerning a customer's
choice of a REP in the competitive electric market in Texas.
(12)
Retail electric provider (REP)--Any entity as defined
in §25.5 of this title (relating to Definitions). For purposes of this
rule, a municipally owned utility or an electric cooperative is only considered
a REP where it sells retail electric power and energy outside its certified
service territory.
(13)
Small commercial customer--A nonresidential customer that
has a peak demand of less than 50 kilowatts during any 12-month period.
(14)
Standard meter--As defined in §25.341 of this title.
(15)
Termination of service--The cancellation or expiration
of a sales agreement or contract by a REP by notification to the customer
and the registration agent.
§25.472.Privacy of Customer Information.
(a)
Mass customer lists.
(1)
Contents of mass customer list. A mass customer list shall
consist of the name, billing address, rate classification, monthly usage for
the most recent 12-month period, meter type, and account number or electric
service identifier (ESI). All customers eligible for the price to beat pursuant
to the Public Utility Regulatory Act §39.202 shall be included on the
mass customer list, except a customer who opts not to be included on the list
pursuant to paragraph (2) of this subsection.
(2)
Prior to the release of a mass customer list, the entity
required to release the mass customer list shall issue a mailing to all customers
who may be included on the list, but that have not previously received such
a mailing from that entity. The mailing shall:
(A)
explain the issuance of the mass customer list;
(B)
provide the customer with the option of not being included
on the list and allow the customer at least 15 days to exercise that option;
(C)
inform the customer of the availability of the statewide
Do Not Call List pursuant to §25.484 of this title (relating to Do Not
Call List) and provide the customer with information on how to request placement
on the list;
(D)
provide a postage-paid postcard, a toll free telephone
number, and an Internet website address to notify the entity required to release
the list of the customer's desire to be excluded from the mass customer list.
(3)
Release dates. The commission will require the electric
utility to release a mass customer list on or before September 1, 2001. Each
retail electric provider (REP) shall release a mass customer list on December
31 of each year from 2002 to 2006. A customer that elects, at any time, not
to be included on the mass customer list shall have that option honored through
December 31, 2006.
(4)
The mass customer list shall be issued, at no charge, to
all REPs certified by, and aggregators registered with, the commission that
will be providing retail electric or aggregation services to residential or
small commercial customers.
(5)
A REP shall not use the list for any purpose other than
marketing electric service and verifying a customer's authorized selection
of a REP prior to submission of the customer's enrollment to the registration
agent.
(b)
Individual customer information.
(1)
Except as specified in subsection (a) of this section,
a REP or aggregator shall not release proprietary customer information, as
defined in §25.272(c)(5) of this title (relating to Code of Conduct for
Electric Utilities and Their Affiliates), to any other person, including an
affiliate of the REP, without obtaining the customer's verifiable authorization
by means of one of the methods authorized in §25.474 of this title (relating
to Selection or Change of Retail Electric Provider). This prohibition shall
not apply to the release of such information by a REP or aggregator to:
(A)
the commission in pursuit of its regulatory oversight or
the investigation and resolution of customer complaints involving REPs or
aggregators;
(B)
an agent of the REP or aggregator engaged to collect an
overdue or unpaid amount or to perform any of the duties of the REP or aggregator
if such duties are outsourced;
(C)
credit reporting agencies pursuant to state and federal
law;
(D)
an energy assistance agency to allow a customer to qualify
for and obtain other financial assistance provided by the agency;
(E)
local, state, and federal law enforcement agencies pursuant
to lawful process; or
(F)
the transmission and distribution utility within whose
geographic service territory the customer is located, pursuant to the provisions
of the transmission and distribution utility's commission-approved Tariff
for Retail Delivery Service.
(2)
A REP or aggregator shall not publicly disclose or make
available for sale any customer-specific information about its customers including
that obtained from the registration agent, the customer's transmission and
distribution utility, or the customer. A REP or aggregator shall not disseminate,
sell, deliver or authorize the dissemination, sale, or delivery of any customer-specific
information or data obtained.
(3)
A REP shall, upon the request of the customer or another
REP that has received authorization from the customer, submit to the requesting
REP or to the customer directly, the monthly usage of the customer for the
previous 12 months, or for as long as the REP has provided service to the
customer, whichever is shorter. The methods of authorization of release of
customer specific information shall be those methods described in §25.474
of this title. A customer shall be entitled to request this information free
of charge at least once every 12 months.
(4)
Upon the request of a customer, a REP shall notify a third
person chosen by the customer of any pending disconnection of service or termination
of contract for electric service with respect to the customer's account.
(5)
This section shall not be interpreted to prevent a REP's
communication of proprietary customer information to the registration agent
in order to effectuate a customer selection or change of a REP or the customer's
switch to the provider of last resort.
(6)
A REP may release proprietary customer information, as
defined in §25.272(c)(5) of this title, to the registration agent, under
terms approved by the commission.
§25.473.Non-English Language Requirements.
(a)
Retail electric providers (REPs). A REP shall provide the
following information to a customer in English or Spanish, at the customer's
designation when the customer is initially enrolled. Additionally, if the
REP markets its products or services in a language other than English or Spanish,
the following information shall also be provided to the customer in that other
language:
(1)
all documents required by this subchapter including, but
not limited to, customer rights, including Your Rights as a Customer disclosure,
terms of service documents, customer bills, customer bill notices and termination
or disconnection notices;
(2)
information on the availability of new electric services,
discount programs, and promotions; and
(3)
access to customer service, including the restoration of
electric service and response to billing inquiries.
(b)
Aggregators. An aggregator shall provide the following
information to a customer in English or Spanish, at the customer's designation
when the customer is initially solicited or enrolled. Additionally, if the
aggregator markets its products or services in a language other than English
or Spanish, the following information shall also be provided to the customer
in that other language:
(1)
terms of service documents required by this subchapter;
(2)
the availability of electric discount programs; and
(3)
access to customer service.
(c)
Dual language requirement. The following documents shall
be provided to all customers in both English and Spanish:
(1)
Your Rights as a Customer disclosure;
(2)
the enrollment notification notice provided by the registration
agent pursuant to §25.474(j) of this title (relating to Selection or
Change of Retail Electric Provider); and
(3)
a disconnection notice issued by the provider of last resort.
(d)
Prohibition on mixed language. Unless otherwise noted in
this subchapter, if any portion of a printed advertisement, electronic advertising
over the Internet, direct marketing material, billing statement, terms of
service document, or Your Rights as a Customer disclosure is translated into
another language, then all portions shall be translated into that language.
A single informational statement advising how to obtain the same printed advertisements,
electronic advertising over the Internet, direct marketing material, billing
statement, terms of service documents, or Your Rights as a Customer disclosure
in a different language is permitted.
§25.474.Selection or Change of Retail Electric Provider.
(a)
General purpose. A retail electric provider (REP) shall
not enroll a customer without obtaining the customer's authorization and having
that authorization verified consistent with this section.
(b)
Initial REP selection process.
(1)
Before the start of retail electric competition and in
conjunction with the commission's customer education campaign, the commission
shall issue to all customers for whom customer choice will be an option an
explanation of the REP selection process and a REP information and selection
form. The information and selection form shall:
(A)
explain retail electric competition;
(B)
list all REPs qualified to provide electric service to
the customer;
(C)
allow a customer to designate one of the listed REPs as
that customer's provider of choice and by whom the customer would like to
be contacted to receive additional enrollment information;
(D)
allow the customer to select one or more of the listed
REPs from which the customer desires to receive information;
(E)
inform customers how they can designate whether they would
like to be placed on the statewide Do Not Call List and indicate the fee for
such placement; and
(F)
indicate how the customer may return such form to the commission.
(2)
Any affiliate REP assigned to serve a customer that is
entitled to receive the price to beat rate, pursuant to PURA §39.202(a),
due to non-selection by the customer shall issue to a customer, either as
a bill insert or through a separate mailing, by January 31, 2002:
(A)
A terms of service document that includes an explanation
of the price to beat rate;
(B)
Your Rights as a Customer disclosure; and
(C)
An Electricity Facts label for the price to beat, which
may be in a separate document, or may be contained in the terms of service
document.
(3)
An electric utility, whose successor affiliate REP will
continue to serve a customer not eligible for the price to beat pursuant to
PURA §39.102(b) due to non-selection by the customer of another REP,
shall issue to a customer by June 1, 2001, a terms of service document. Such
document shall contain an explanation of the price the customer will be charged
by the affiliate REP.
(c)
General standards for authorizations and verifications
of enrollment or switch orders.
(1)
All authorizations and verifications of enrollment or switch
orders shall be in plain, easily understood English or another language, if
the underlying sales transaction was conducted in the other language. The
entire authorization and verification shall be the same language.
(2)
The specific electric service package or plan for which
the customer's assent is being attained or verified shall be disclosed to
the customer.
(3)
The name of the specific REP for which the customer's authorization
is being obtained and verified shall be disclosed to the customer. Any use
of a name for the purposes of deception or to obtain a customer's authorization
and verification based on confusion or inability to understand the import
of the name of the REP and the services offered is prohibited.
(4)
Each authorization and verification shall affirmatively
inquire as to the identity of the individual with the authority to change
the customer's REP and explain that only that customer can agree to a change
in REP.
(5)
A REP or an aggregator, other than a municipally owned
utility or electric cooperative, shall submit copies of its sales script,
contract, terms of service document and any other materials used to obtain
a customer's authorization or verification to the commission upon request.
(6)
In the event a customer disputes an enrollment or switch,
the REP shall provide to the customer proof of the customer's authorization
and verification within five business days of the customer's request.
(d)
Required authorization disclosures. All authorizations
shall clearly and conspicuously disclose the following information contained
in the REP's contract or terms of service document for each product offered
to the customer:
(1)
the name of the new REP;
(2)
the ability of a customer to select to receive information
in English, Spanish, or the language used in the marketing of service to the
customer. The REP shall provide a means of obtaining and recording a customer'
language preference;
(3)
price, including the total price stated in cents per kilowatt-hour,
for electric service;
(4)
term or length of the contract or term of service;
(5)
the presence or absence of early termination fees or penalties,
and applicable amounts;
(6)
any requirement to pay a deposit and the amount of that
deposit;
(7)
any fees to the customer for switching to the REP pursuant
to subsection (l) of this section; and
(8)
the customer's right to review and cancel the contract
within three federal business days without penalty and a statement that the
customer will receive a written copy of the terms of service document that
will explain all the terms of the agreement and how to exercise the right
of cancellation before the customer's electric service is switched to the
REP.
(e)
Verification requirements. A verification shall clearly:
(1)
confirm the customer's billing name, address, and electric
service identifier (ESI) or account number to be used by the selected REP
in making an enrollment or switch request to the registration agent;
(2)
confirm appropriate verification data, such as the customer's
date of birth, the customer's mother's maiden name, or other voluntarily submitted
information;
(3)
confirm the decision to change from the current REP to
the new REP; and
(4)
confirm that the customer designates the new REP to act
as the customer's agent for the switch of REP.
(f)
Methods of obtaining customer authorization and verification.
Customer authorizations and verifications shall be obtained by using one of
the methods listed in this subsection.
(1)
Written authorization and verification. A written authorization
from a customer for a selection or switch of a REP shall use a letter of agency
(LOA) as specified in this subsection.
(A)
The LOA shall be a separate or easily separable document
containing the requirements prescribed in subparagraph (D) of this paragraph
for the sole purpose of authorizing the REP to initiate a REP switch request.
The LOA shall be signed and dated by the customer requesting the REP switch.
(B)
The LOA shall not be combined with inducements of any kind
on the same document.
(C)
At a minimum, the LOA shall be printed in a size and type
that is clearly legible, and shall contain clear and unambiguous language
that confirms:
(i)
the customer's billing name, address, and ESI or account
number to be used by the REP in making a switch request;
(ii)
the decision to switch from the current REP to the new
REP; and
(iii)
that the customer designates (name of the new REP) to
act as the customer's agent for switching the REP.
(D)
The following LOA form meets the requirements of this subsection.
Other versions may be used, but shall comply with all the requirements of
this subsection.
Figure: 16 TAC §25.474(f)(1)(D)
(E)
The customer's signature on the letter of agency, contract
or other document which contains the materials terms and conditions of the
service shall constitute an authorization and verification if the letter of
agency, contract or documents comply with the provisions of this section.
(F)
Before obtaining a signature from a customer, a REP shall
provide the customer a reasonable opportunity to read any written materials
accompanying the contract or terms of service document and shall answer any
and all questions posed by any customer about information contained in the
documents.
(G)
Upon obtaining the customer's signature, a REP or aggregator
shall immediately provide the customer a legible copy of the signed contract,
the required terms of service document, and Your Rights as a Customer disclosure.
If written solicitations by a REP contain the terms of service document or
contract, any tear-off portion that is submitted by the customer to the REP
to obtain electric service shall allow the customer to retain the terms of
service document.
(2)
Telephonic authorization and verification. A REP or aggregator
that obtains a customer's authorization by means of a telephone conversation
shall audio record the entirety of such authorization, or obtain independent
third party verification of, the customer's authorization prior to submitting
an enrollment or switch order. In addition to the requirements of this paragraph,
both the authorization and audio recording or third party verification shall
adhere to the requirements of subsections (d) and (e) of this section.
(A)
Additional authorization and verification requirements.
Telephonic enrollment or switch orders shall:
(i)
clearly inform the customer at the beginning of a call
that the call is being recorded. The entire authorization and verification
conversation with the customer shall be recorded so that evidence of a customer's
consent can be reviewed and investigated if a subsequent complaint is filed;
(ii)
read any script and respond to any questions in the language
used to make the underlying sales transaction and proceed at a normal conversational
speed using plain, easily, understood language;
(iii)
at a normal conversational speed, state the name of the
REP to which the customer is being switched in its entirety; and
(iv)
for both the authorization and the verification, agents
shall clearly state that the customer will have a right of cancellation without
penalty and that the customer will receive a written copy of the terms of
service document that will explain all the terms of the agreement and how
to exercise the right of cancellation before the customer's electric service
is switched by the REP.
(B)
Independent third party. An independent third party shall
operate in a location physically separate from the REP or aggregator or the
REP's or aggregator's marketing agent and shall not:
(i)
be owned, managed, or directly controlled by the REP or
aggregator or the REP's or aggregator's marketing agent; or
(ii)
have financial incentive to confirm enrollment or switch
orders.
(3)
Internet enrollment. A REP or aggregator that offers Internet
enrollment to customers shall comply with the authorization and verification
requirements in subsections (c) and (d) of this section and with the following
minimum requirements:
(A)
The aggregator or REP shall maintain an Internet website
at the website address provided to the commission. The website shall identify
the legal name of the aggregator or REP, its address, telephone number, and
Texas license number to provide aggregation services or sell retail electric
service.
(B)
The means of transfer of information, such as electronic
enrollment, renewal, and cancellation information between the customer and
the REP or aggregator shall be by an encrypted transaction using Secure Socket
Layer or similar encryption standard to ensure the privacy of customer information;
(C)
The REP or aggregator shall identify the terms of service
document by a version number to ensure the ability to verify the particular
agreement to which the customer assents. The REP or aggregator shall make
available a copy of the terms of service document, as required by §25.475
of this title (relating to Information Disclosures to Residential and Small
Commercial Customers), that is agreed to by a customer, on the REP's or aggregator's
Internet website. The terms of service document shall be accessible by the
customer for the duration of the contract term offered to the customer.
(D)
The Internet enrollment procedure shall prompt the customer
to print or save the terms of service document to which the customer assents
and provide an option to have a written terms of service document sent by
regular mail.
(E)
The REP or aggregator shall provide to the customer a toll-free
telephone number, Internet website address, and e-mail address for contacting
the REP or aggregator throughout the duration of the customer's agreement.
The REP or aggregator shall also provide the appropriate toll-free telephone
number that the customer can use to report service outages.
(F)
The REP or aggregator shall obtain a verification that
meets the standards of subsection (e) of this section, provide a statement
with a box that must be checked by the customer to indicate that the customer
has read and agrees to select the REP to supply electric service, and the
time and date of the customer's enrollment. The customer's enrollment shall
be followed by a confirmation of the change of the customer's REP by e-mail,
which shall include a conspicuous notice of the applicable right of cancellation
and offer the customer the option of exercising this right by toll-free telephone
number, e-mail, Internet website, facsimile transmission, or regular mail.
(G)
Customer authorizations and verifications shall adhere
to any state and federal guidelines governing the use of electronic signatures.
(4)
Door-to-door sales. A REP or aggregator that engages in
door-to-door marketing at a customer's residence, or personal solicitation
at a public location (such as malls, fairs, or places of retail commercial
activity) shall be subject to the following:
(A)
The REP or aggregator shall comply with the standards set
forth in subsections (c)-(e) of this section and paragraph (1) of this subsection.
(B)
The REP or aggregator shall provide the disclosures and
right of rescission required by this section and the Federal Trade Commission's
Trade Regulation Rule Concerning a Cooling Off Period for Door-to-Door Sales
(16 C.F.R. §29).
(C)
The individual who represents the REP or aggregator shall
wear a clear and conspicuous identification on the front of the individual's
outer clothing that prominently displays the name of the REP or aggregator.
The name displayed shall conform to the name on the REP's certification or
aggregator's registration obtained from the commission and the name that appears
on all of the REP's or aggregator's contracts and terms of service documents
in possession.
(D)
The REP or aggregator shall affirmatively state that it
is not a representative of the customer's transmission and distribution utility.
The REP's or aggregator's clothing and sales presentation shall be designed
to avoid the impression by a reasonable customer that the individual represents
the customer's transmission and distribution utility or the provider of last
resort (POLR).
(g)
Record retention. A REP shall maintain non-public records
of a customer authorization or verification for a change in REP for 24 months
from the date of the REP's initial service to the customer and shall provide
such records to the customer and the commission upon request.
(h)
Right of cancellation. A REP shall promptly provide the
customer with the terms of service document after the customer has provided
authorization to select the REP pursuant to one of the methods set forth in
this section. The REP shall offer the customer a right to cancel the contract
without penalty or fee of any kind for a period of three federal business
days after the customer's receipt of the terms of service document and acceptance
of the REP's offer. The provider may assume that any delivery of the terms
of service document deposited first class with the United States Postal Service
(U.S. mail) will be received by the customer within three federal business
days. The cancellation period shall not start until the customer receives
the terms of service document in the manner prescribed by this subchapter,
based on the customer's method of enrollment. Any REP receiving a late notice
of cancellation from the customer shall contact the registration agent and
cancel the pending switch as soon as possible after such late notice is received.
(i)
Submission of customer's selection to the registration
agent. A REP may submit a customer's selection of the REP to the registration
agent prior to the expiration of the cancellation period prescribed by subsection
(h) of this section. Additionally, the REP shall submit the switch request
to the registration agent at the proper time so that the switch will be processed
on the date agreed to by the customer and as allowed by the tariff of the
transmission and distribution utility, municipally owned utility, or electric
cooperative. The customer shall be informed of the scheduled date that the
customer will begin receiving electric service from the REP, and of any delays
in meeting that date. Additionally, the REP must advise the registration agent
of any "special needs" customers and renew such notification to the registration
agent annually.
(j)
Duty of the registration agent. When the registration agent
receives an enrollment or switch request from a REP, the registration agent
shall:
(1)
process that request promptly; and
(2)
send the customer an enrollment or switch notification
notice in English and Spanish pursuant to either subparagraph (A) or (B) of
this paragraph, as appropriate.
(A)
Standard enrollment and switches. The notice provided by
the registration agent to the customer shall comply with the provisions of
this subparagraph, unless the switch is considered a "switch to POLR" as described
in subparagraph (B) of this paragraph. The notice shall:
(i)
identify the REP that initiated the enrollment or switch
request;
(ii)
inform the customer that the customer's REP will be switched
unless the customer requests the registration agent to cancel the switch by
the date stated in the notice;
(iii)
provide a cancellation date by which the customer may
request a switch to be cancelled, no less than seven calendar days after the
customer receives the notice; and
(iv)
provide instructions for the customer to request that
the switch be cancelled. These instructions which shall include a telephone
number, facsimile machine number, and e-mail address to reach the registration
agent.
(B)
Switch to POLR. If the customer is being switched to the
POLR at the request of the REP currently serving the customer, the notice
provided to the customer by the registration agent shall include only the
following:
(i)
the name of the REP that initiated the request;
(ii)
the name of the POLR that will begin providing electric
service to the customer; and
(iii)
the date such switch will be effective.
(3)
unless the customer makes a timely request to cancel the
switch, direct the transmission and distribution utility to implement the
switch effective with the customer's next meter reading provided that such
meter reading is at least one business day after the transmission and distribution
utility receives notice of the switch request or such other time and date
as requested by the customer or the REP.
(k)
Customer's switch to POLR. The methods of customer authorization,
customer verification, and rights of cancellation are not applicable when
the customer's electric service is "dropped" to the POLR by a REP for non-payment
pursuant to §25.482 of this title (relating to Termination of Contract).
Nothing in this subsection shall be read to imply that the customer is accepting
a contract with the POLR for a specific term.
(l)
Fees. A REP, other than a municipally owned utility or
an electric cooperative, shall not charge a fee to a customer to select, switch
or enroll with the REP unless the customer requests a switch or enrollment
that does not conform with the normal meter reading and billing cycle. Such
fee shall not exceed the rate charged by the transmission and distribution
utility for this off-cycle meter reading. The registration agent shall not
charge a fee to the end-use customer for the switch or enrollment process
performed by the registration agent.
(m)
Transferring customers from one REP to another.
(1)
Any REP that will acquire customers from another REP due
to acquisition, merger, bankruptcy or any other reason, shall provide notice
to every affected customer. The notice shall be in a billing insert or separate
mailing at least 30 days prior to the transfer of any customer. If legal or
regulatory constraints prevent sending the notice at least 30 days prior to
the transfer, the notice shall be sent promptly after all legal and regulatory
conditions are met. If the transfer of customers will materially change the
terms of service for the affected customers, the notice shall:
(A)
identify the current and acquiring REP;
(B)
explain why the customer will not be able to remain with
the current REP;
(C)
explain that the customer has a choice of selecting a REP
and may select the acquiring REP or any other REP;
(D)
explain that if the customer wants another REP, the customer
should contact that other REP;
(E)
explain the time frame for the customer to make a selection
and what will happen if the customer makes no selection;
(F)
identify the date that customers will be or were transferred
to the acquiring REP;
(G)
provide the Electricity Facts label and terms of service
document of the acquiring REP; and
(H)
provide a toll-free telephone number for a customer to
call for additional information.
(2)
The acquiring REP shall provide the commission with a copy
of the notice when it is sent to customers.
(3)
If the transfer of customers will not result in a material
change to the terms of service for the affected customers, the notice shall
contain only the information in paragraph (1)(A), (B), and (F)-(H) of this
subsection.
(n)
Complaints alleging unauthorized change of REP (Slamming).
A customer may file a complaint with the commission, pursuant to §25.485
of this title (relating to Customer Access and Complaint Handling), against
a REP for any reasons related to the provisions of this section.
(1)
REP's response to complaint. After review of a customer's
complaint, the commission shall forward the complaint to the REP that the
customer believes made an unauthorized switch. The REP is responsible for
performing the following upon receiving a complaint:
(A)
take all actions within its control to facilitate the customer's
prompt return to the original REP within three days;
(B)
cease any collections activities related to the switch
until the complaint has been resolved by the commission; and
(C)
respond to the commission within 21 calendar days after
receiving the complaint. The REP's response shall include the following:
(i)
all documentation related to the authorization and verification
used to switch the customer's service; and
(ii)
all corrective actions taken as required by paragraph
(3) of this subsection, if the switch in service was not verified in accordance
with subsections (c)-(e) of this section.
(2)
Commission investigation. The commission shall review all
of the information related to the complaint, including the REP's response,
and make a determination of whether the REP complied with the requirements
of this section. The commission shall inform the complainant and the REP of
the results of the investigation and identify any additional corrective actions
that may be required of the REP or the customer's obligation to pay any charges
related to the authorized switch.
(3)
Responsibilities of the REP that initiated the change.
If a customer's REP is changed without authorization consistent with this
section, the REP that initiated the unauthorized change shall:
(A)
within five business days of the customer's request, pay
all charges associated with returning the customer to the original REP;
(B)
within ten business days of the customer's request, provide
all billing records and usage history information to the original REP related
to the unauthorized change of services;
(C)
within 30 days of the original REP's request for payment,
pay the original REP the amount it would have received from the customer if
the unauthorized change had not occurred;
(D)
within 30 days of the customer's request, refund any amounts
paid by the customer as required by paragraph (4) of this subsection; and
(E)
cancel all unpaid charges.
(4)
Responsibilities of the original REP. The original REP
shall:
(A)
inform the REP that initiated the unauthorized switch of
the amount that would have been charged for identical services if the unauthorized
change had not occurred, within ten business days of the receipt of the billing
records required under paragraph (3)(B) of this subsection;
(B)
provide to the customer all benefits or gifts associated
with the service, such as frequent flyer miles, that would have been awarded
had the unauthorized change not occurred, upon receiving payment for service
provided during the unauthorized change;
(C)
maintain a record of customers that experienced an unauthorized
change in REP that contains:
(i)
the name of the REP that initiated the unauthorized change;
(ii)
the account number affected by the unauthorized change;
(iii)
the date the customer asked the unauthorized REP to return
the customer to the original REP; and
(iv)
the date the customer was returned to the original REP;
and
(D)
not bill the customer for any charges the customer incurred
during the first 30 days after the unauthorized change in providers, but may
bill the customer for charges that were incurred after the first 30 days based
on what the original REP would have charged if the unauthorized change had
not occurred.
(o)
Compliance and enforcement.
(1)
Records of customer verifications and unauthorized changes.
A REP, other than a municipally owned utility or an electric cooperative,
shall provide a copy of records maintained under subsections (c)-(f) and (n)
of this section to the commission upon request.
(2)
Administrative penalties. If the commission finds that
a REP or aggregator, other than a municipally owned utility or an electric
cooperative, is in violation of this section, the commission shall order the
REP or aggregator to take corrective action as necessary. Additionally, the
REP or aggregator may be subject to administrative penalties pursuant to the
Public Utility Regulatory Act (PURA) §15.023 and §15.024. If the
commission finds that an electric cooperative or a municipally owned utility
is in violation, it shall inform the cooperative's board of directors and
general manager, or the municipal utility's general manager and city council.
(3)
Certificate revocation. If the commission finds that a
REP or aggregator, other than a municipally owned utility or an electric cooperative,
repeatedly violates this section, and if consistent with the public interest,
the commission may suspend, restrict, deny, or revoke the registration or
certificate, including an amended certificate, of the REP or aggregator, thereby
denying the REP or aggregator the right to provide service in this state.
(4)
Coordination with the office of the attorney general. The
commission shall coordinate its enforcement efforts regarding the prosecution
of fraudulent, misleading, deceptive, and anticompetitive business practices
with the office of the attorney general in order to ensure consistent treatment
of specific alleged violations.
§25.475.Information Disclosures to Residential and Small Commercial Customers.
(a)
General disclosure requirements. All printed advertisements,
electronic advertising over the Internet, direct marketing materials, billing
statements, terms of service documents, and Your Rights as a Customer disclosures
distributed by retail electric providers (REPs) and aggregators:
(1)
shall be provided in a readable format, written in clear,
plain, easily understood language;
(2)
shall not be fraudulent, unfair, misleading, deceptive,
or anti-competitive as prohibited by federal and state law; and
(3)
upon receipt of a license or certificate from the commission,
shall include the REPs certified name or the aggregators registered name,
the number of the license, plan name, and name of the product offered.
(b)
Advertising and marketing materials.
(1)
Except as otherwise provided by this section, advertisements
and marketing materials, other than television or radio, that make any claims
regarding price, cost competitiveness, or environmental quality shall include
the Electricity Facts label. In lieu of including an Electricity Facts label,
the following statement may be provided: "For a copy of important standardized
information and contract terms regarding this product, call (name, telephone
number, and website (if available) of the REP)." A REP shall provide a terms
of service document, which includes an Electricity Facts label, relating to
the service or product being advertised to each person who contacts the REP
in response to this statement.
(2)
A REP shall include the following statement in any television
or radio advertisement that makes a claim about price, cost competitiveness,
or environmental quality for an electricity product of the REP: "You can obtain
information that will allow you to compare the price and terms of this product
with other offers. Call (name, telephone number and website (if available)
of the REP)." A REP shall provide a terms of service document, which includes
an Electricity Facts label, to each person who contacts the REP in response
to this statement.
(c)
Terms of service document.
(1)
For each service or product that it offers to residential
or small commercial customers, a REP shall create a terms of service document.
A REP shall assign a number to each version of its terms of service document.
(2)
The terms of service document shall be provided to new
customers. It shall also be provided to current customers at any time that
the REP materially changes the terms and conditions of service with its customers.
Upon request, customers are entitled to receive an additional copy of the
terms of service document.
(3)
A REP, other than a municipally owned utility or an electric
cooperative, shall furnish its terms of service documents to the commission
upon the commission's request.
(4)
A REP shall maintain a copy of each customer's terms of
service document for two years after the terms of service expire.
(5)
The following information shall be conspicuously presented
in the terms of service document:
(A)
The REP's certified name, mailing address, Internet website
address (if applicable), and a toll-free telephone number (with hours of operation
and time-zone reference);
(B)
The Electricity Facts label as specified in subsection
(e) of this section;
(C)
A statement as to whether there is a minimum contract term;
(D)
A statement as to whether there are penalties to cancel
service before the end of the minimum term of the contract and the amount
of those penalties;
(E)
If the REP requires deposits from its customers, a description
of the conditions that will trigger a request for a deposit, the maximum amount
of the deposit, a statement that interest will be paid on the deposit including
the amount of the interest that will be paid, and the conditions under which
the customer may obtain a refund of a deposit;
(F)
The itemization of any charges that must be paid by the
customer before service is initiated or switched;
(G)
The itemization of any services that are included in the
customer's contract, including:
(i)
the specific methods and rates by which the customer will
be charged for electric service and how such charges will appear on the customer's
electric bill; and
(ii)
the cost for each service or product other than electric
service and how such charges will appear on the customer's electric bill.
If a competitive retailer has bundled the charges for these other services
together, the total cost of all charges for services other than electric service
and how such charge will appear on the customer's electric bill;
(H)
The itemization of any charges that may be imposed on the
customer during the period of the contract for default, late payment, switching
fees, late fees, fees that may be charged to the customer for returned checks,
fees charged for early termination of the contract, collection costs imposed
on the customer if the customer defaults, and any other non-recurring fees
and charges;
(I)
The policies of the REP regarding payment arrangements,
late payments, payments in dispute and defaults by the customer;
(J)
All other material terms and conditions, including, without
limitation, exclusions, reservations, limitations and conditions of the contract
for services offered by the REP;
(K)
In a conspicuous and separate paragraph or box:
(i)
A description of the right of a new customer to cancel
a contract without fee or penalty of any kind within three federal business
days after receiving the terms of service document sent to the customer after
the REP has obtained the customer's authorization to provide service to the
customer;
(ii)
Detailed instructions for canceling a contract, including
the telephone number, facsimile machine number and e-mail address that the
customer may use to cancel the contract; and
(iii)
Any information on automatic contract renewal that applies;
(L)
A statement informing the customer that the REP cannot
deny service or require a prepayment or deposit for service based on a customer's
race, creed, color, national origin, ancestry, sex, marital status, lawful
source of income, level of income, disability, familial status, location of
a customer in a economically distressed geographic area, or qualification
for low income or energy efficiency services;
(M)
A statement that bill payment assistance for customers
is offered by the REP and that additional information may be obtained by contacting
the REP; and
(N)
A statement that rate reductions for qualified low income
customers are offered by the REP.
(d)
Minimum notice of changes in terms and conditions, contract,
and terms of service.
(1)
Change in terms and conditions. A REP shall provide written
notice to its customers 45 days in advance of any material change in the terms
of service document. The notice shall clearly specify what actions the customer
needs to take to terminate the contract, the deadline by which such action
must be taken, and the ramifications if such actions are not taken within
the specified deadline. This notice may be provided in or with the customer's
bill or in a separate document, but shall be clearly and conspicuously labeled
with the following statement: "Important notice regarding changes to your
electric service contract." The notice shall clearly state that the customer
may decline any material change in the terms of service and cancel the contract
without penalty. Notice of the customer's option to decline is not necessary
for material changes that favor the customer or for changes that are mandated
by a regulatory agency.
(2)
Automatic renewal clauses. A REP may utilize an automatic
renewal clause. Any contract renewed through the activation of an automatic
renewal clause shall be in effect for a maximum of 30 days and such clause
may be repeatedly activated unless cancelled by the customer or the REP materially
changes the terms of service.
(e)
Electricity Facts label.
(1)
Pricing disclosures. Pricing information disclosed by a
REP in an Electricity Facts label shall include:
(A)
For the total cost of electric services, exclusive of applicable
taxes:
(i)
If the billing is based on rates that will not vary by
season or time of day, the total average price for electric service reflecting
all recurring charges, including generation, transmission and distribution,
and other flat rate charges expressed as cents per kilowatt hour rounded to
the nearest one-tenth of one cent for each usage level as follows:
(I)
The average price for residential customers shall be shown
for 500, 1,000 and 1,500 kilowatt hours per month; and
(II)
The average price for small commercial customers shall
be shown for 1,500, 2,500 and 3,500 kilowatt hours per month;
(ii)
If the billing is based on rates that vary by season or
time of day, the average price for electric service, reflecting all recurring
charges and based on the applicable load profile approved by the commission,
expressed as cents per kilowatt hour rounded to the nearest one-tenth of one
cent for each usage level as follows:
(I)
The average price for residential customers shall be shown
for 500, 1,000 and 1,500 kilowatt hours per month; and
(II)
The average price for small commercial customers shall
be shown for 1,500, 2,500 and 3,500 kilowatt hours per month;
(iii)
If a competitive retailer combines the charges for electric
service with charges for any other product, the competitive retailer shall:
(I)
If the electric services are sold separately from the other
products, disclose the total price for electric service separately from other
products; and
(II)
If the competitive retailer does not permit a customer
to purchase the electric service without purchasing the other products, state
the total charges for all products as the price of the total electric service.
(B)
If the pricing plan envisions prices that will vary according
to the season or time of day, the statement: "This price disclosure is an
example based on average usage patterns--your average price for electric service
will vary according to when you use electricity. See the terms of service
document for actual prices."
(C)
If the pricing plan envisions prices that will vary during
the term of the contract because of factors other than season and time of
day, the statement: "This price disclosure is an example based on average
contract prices--your average price for electric service will vary according
to your usage and (insert description of the basis for and the frequency of
price changes during the contract period). See the terms of service document
for actual prices."
(D)
If the price of electric service will not vary, the phrase
"fixed price" and the length of time for which the price will be fixed; and
(E)
If the price of electric service is based on the season
or time of day, the on-peak seasons or times and the associated rates.
(2)
Contract terms disclosures. Specific contract terms that
shall be disclosed on the Electricity Facts label are:
(A)
The minimum contract term, if any; and
(B)
Early termination penalties, if any.
(3)
Fuel mix disclosures. The Electricity Facts label shall
contain a table depicting, on a percentage basis, the fuel mix of the electricity
product supplied by the REP in Texas. The table shall also contain a column
depicting the statewide average fuel mix. The break-down for both columns
shall provide percentages of net system power generated by the following categories
of fuels: coal and lignite; natural gas; nuclear; renewable energy (comprising
biomass power, hydro power, solar power and wind power); and other sources.
Fuel mix information shall be based on generation data for the most recent
calendar year.
(A)
The percentage used shall be rounded to the nearest whole
number. Values less than 0.5% and greater than zero may be shown as "<0.5%.
(B)
Any source of electricity that is not used shall be listed
in the table and depicted as "0.0%".
(4)
Air emissions and waste disclosures. The Electricity Facts
label shall contain a bar chart that depicts the amounts of carbon dioxide,
nitrogen oxide, sulfur dioxide and particulate emissions and nuclear waste
attributable to the aggregate known sources of electricity identified in paragraph
(3) of this subsection.
(A)
Emission rates for carbon dioxide, nitrogen oxide, sulfur
dioxide and particulates shall be calculated in pounds per 1,000 kilowatt-hours
(lbs/1,000 kWh), divided by the corresponding statewide system average emission
rates, and multiplied by 100 to obtain indexed values.
(B)
Rates for nuclear waste shall be calculated in pounds of
spent fuel per 1,000 kilowatt-hours, divided by the corresponding statewide
system average rate, and multiplied by 100 to obtain indexed values.
(C)
The commission shall calculate the statewide system average
rates to be used in accordance with this subsection.
(5)
Renewable energy claims. A REP may verify its sales of
renewable energy by requesting that the program administrator of the renewable
energy credits trading program established pursuant to §25.173(d) of
this title (relating to Goal for Renewable Energy) retire a renewable energy
credit for each megawatt-hour of renewable energy sold to its customers.
(6)
Format of Electricity Facts label. Each Electricity Fact
label shall be printed in type no smaller than ten points in size and shall
be formatted as shown below:
Figure: 16 TAC §25.475(e)(6)
(7)
Distribution of Electricity Facts label. Beginning July
1, 2002, a REP shall distribute its Electricity Facts label to its customers
with its January and July billings (or as a separate mailing). Additionally,
a REP shall provide the commission with an electronic version of each Electricity
Facts label the REP distributes to customers. The commission shall make each
label available to the public in a non-preferential manner over the Internet.
(f)
Your Rights as a Customer disclosure. In addition to the
terms of service document required by this section, a REP shall develop a
separate disclosure statement for residential customers and small commercial
customers entitled "Your Rights as a Customer" that summarizes the standard
customer protections provided by the rules in this subchapter.
(1)
This disclosure shall initially be distributed at the same
time as the REP's terms of service document and shall accurately reflect the
REP's terms of service.
(2)
The REP shall distribute an update of this disclosure once
annually to its customers.
(3)
Each REP's Your Rights as a Customer disclosure shall be
subject to review and approval by the commission.
(4)
The disclosure shall inform the customer of the following
:
(A)
The REP's complaint resolution policy pursuant to §25.485
of this title (relating to Customer Access and Complaint Handling);
(B)
The customer's right to have the meter tested pursuant
to §25.124 of this title (relating to Meter Testing), or in accordance
with the tariffs of a municipally owned utility or an electric cooperative,
as applicable, and the customer's right to be instructed by the REP how to
read the meter, if applicable;
(C)
Disclosures concerning the customer's ability to dispute
unauthorized charges on the customer's bill as set forth in §25.481 of
this title (relating to Unauthorized Charges);
(D)
Notice of any special services such as readers or notices
in Braille or TTY services for hearing impaired customers;
(E)
Special actions or programs available to those customers
with physical disabilities, including customers who have a critical need for
electric service to maintain life support systems;
(F)
Non-English language requirements pursuant to §25.473
of this title (relating to Non-English Language Requirements);
(G)
Cancellation of terms of service without penalty;
(H)
Slamming protections applicable under §25.474(n) of
this title (relating to Selection or Change of Retail Electric Provider);
(I)
Termination of service protections pursuant to §25.482
of this title (relating to Termination of Contract) and disconnection of service
by the provider of last resort (POLR) pursuant to §25.483 of this title
(relating to Disconnection of Service);
(J)
Availability of financial and energy assistance programs;
(K)
Availability of a Do Not Call List pursuant to §25.484
of this title (relating to Do Not Call List);
(L)
Availability of discounts for qualified low income customers;
(M)
Payment arrangements and deferred payments pursuant to §25.480
of this title (relating to Bill Payment and Adjustments);
(N)
Procedures for reporting outages;
(O)
Privacy rights regarding customer specific information
as defined by §25.472 of this title (relating to Privacy of Customer
Information);
(P)
Availability of POLR service and how to contact the POLR,
including the POLR's toll-free telephone number; and
(Q)
the steps necessary to have service restored or reconnected
after involuntary suspension or disconnection.
§25.477.Refusal of Electric Service.
(a)
Acceptable reasons to refuse electric service. A retail
electric provider (REP) may refuse to provide electric service to a customer
for one or more of the reasons specified in this subsection:
(1)
Customer's facilities inadequate. The customer's installation
or equipment is known to be hazardous or of such character that satisfactory
service cannot be given, or the customer's facilities do not comply with all
applicable state and municipal regulations.
(2)
Use of prohibited equipment or attachments. The customer
fails to comply with the transmission and distribution utility's, municipally
owned utility's, or electric cooperative's tariff pertaining to operation
of nonstandard equipment or unauthorized attachments that interfere with the
service of others.
(3)
Intent to deceive. The customer applies for service at
a location where another customer received, or continues to receive, service
and the other customer's bill from the REP is unpaid at that location, and
the REP can reasonably demonstrate the change of account holder and billing
name is made to avoid or evade payment of an outstanding bill owed to the
REP.
(4)
For indebtedness. The customer owes a bona fide debt to
the REP for the same kind of service as that being requested. An affiliate
REP or provider of last resort (POLR) shall offer the customer an opportunity
to pay the outstanding debt to receive service. In the event a customer's
indebtedness is in dispute, the customer shall be provided service upon paying
a deposit pursuant to §25.478 of this title (relating to Credit Requirements
and Deposits).
(5)
Failure to pay guarantee. A customer has acted as a guarantor
for another customer and failed to pay the guaranteed amount, where such guarantee
was made in writing and was a condition of service.
(6)
Refusal to comply with credit requirements. The customer
refuses to comply with the credit and deposit requirements set forth in §25.478
of this title.
(7)
Other acceptable reasons to refuse electric service. A
competitive retailer may refuse to provide electric service to a customer
for one or more of the reasons specified in paragraph (1)-(6) of this subsection
or for any other reason that is not otherwise discriminatory pursuant to §25.471
of this title (relating to General Provisions of Customer Protection Rules).
(b)
Insufficient grounds for refusal to serve. The following
are not sufficient cause for refusal of service to a customer by a REP:
(1)
delinquency in payment for electric service by a previous
occupant of the premises to be served;
(2)
failure to pay for any charge that is not related to the
provision of electric service, including a competitive energy service, merchandise,
or other services that are optional and are not included in the electric service
provided;
(3)
failure to pay a bill that includes more than the allowed
six months of underbilling, unless the underbilling is the result of theft
of service;
(4)
failure to pay the unpaid bill of another customer for
usage incurred at the same address, except where the REP has reasonable and
specific grounds to believe that the customer has applied for service to avoid
or evade payment of a bill issued to a current occupant of the same address.
(c)
Disclosure upon refusal of service.
(1)
A REP that denies electric service to a customer shall
inform the customer of the reason for the denial. Upon the customer's request,
this disclosure shall be furnished in writing to the customer. This disclosure
may be combined with any disclosures required by applicable federal or state
law.
(2)
This disclosure is not required when the REP notifies the
customer orally that the customer is not located in a geographic area served
by REP, does not have the type of usage characteristics that is served by
the REP, or is not part of a customer class served by the REP.
(3)
Specifically, the REP shall inform the customer:
(A)
of the reasons for the refusal of service;
(B)
that the customer may be eligible for service if the customer
remedies the reason(s) for refusal and complies with the REP's terms and conditions
of service;
(C)
that the REP cannot refuse service based on the prohibited
grounds set forth in §25.471(c) of this title;
(D)
that a customer who is dissatisfied may file a complaint
with the commission pursuant to §25.485 of this title (relating to Customer
Access and Complaint Handling); and
(E)
of the availability and existence of POLR service and the
toll-free telephone number to contact the POLR.
§25.478.Credit Requirements and Deposits.
(a)
Credit requirements for permanent residential customers.
A retail electric provider (REP) may require residential customers to establish
and maintain satisfactory credit as a condition of providing service pursuant
to the requirements of this section.
(1)
Establishment of credit shall not relieve any customer
from complying with the requirements for payment of bills by the due date
of the bill.
(2)
The credit worthiness of spouses established during shared
service in the 12 months prior to their divorce will be equally applied to
both spouses for 12 months immediately after their divorce.
(3)
A residential customer of an affiliate REP or provider
of last resort (POLR) can demonstrate satisfactory credit using any one of
the criteria listed in subparagraphs (A) through (D) of this paragraph. A
competitive retailer may establish other criteria by which a customer can
demonstrate satisfactory credit, so long as such criteria are not discriminatory
pursuant to §25.471(c) of this title (relating to General Provisions
of Customer Protection Rules).
(A)
A residential customer may be deemed as having established
satisfactory credit if the customer:
(i)
has been a customer of any REP or the electric utility
(prior to 2002) within the two years prior to the customer's request for electric
service;
(ii)
is not delinquent in payment of any such electric service
account;
(iii)
during the last 12 consecutive months of service was
not late in paying a bill more than once; and
(iv)
did not have service disconnected for nonpayment.
(B)
A residential customer may be deemed as having established
satisfactory credit if the customer possesses a satisfactory credit rating
obtained through an accredited credit reporting agency.
(C)
A residential customer may be deemed as having established
satisfactory credit if the customer is 65 years of age or older and the customer's
account with the electric utility (prior to 2002) or any other REP has not
had a delinquent balance incurred within the last two years for the same type
of service applied for.
(D)
A residential customer may be deemed as having established
satisfactory credit if the customer has been determined to be a victim of
family violence as defined in the Texas Family Code §71.004, by a family
violence center or by treating medical personnel. This determination shall
be evidenced by submission of a certification letter developed by the Texas
Council on Family Violence. The certification letter may be submitted directly
by use of a toll-free fax number to the affiliate REP or POLR.
(E)
Pursuant to PURA §39.107(g), a REP who requires pre-payment
by a metered residential customer as a condition of initiating service may
not charge the customer an amount for electric service that is higher than
the price charged by the POLR in the applicable transmission and distribution
service territory.
(F)
The REP may obtain payment history information from the
customer's previous REP or from an accredited credit reporting agency. The
REP shall obtain the customer's authorization pursuant to §25.474 of
this title (relating to Selection or Change of Retail Electric Provider),
prior to obtaining such information from the customer's prior REP. A REP shall
maintain payment history information for two years after electric service
has been terminated to a customer in order to be able to provide credit history
information at the request of the former customer. Additionally, a REP may
utilize credit reporting agencies to document customers with poor credit/payment
histories.
(4)
If satisfactory credit cannot be demonstrated by the residential
customer of an affiliate REP or POLR using these criteria, the customer may
be required to pay a deposit pursuant to subsections (c) and (d) of this section.
(b)
Credit requirements for non-residential customers. A REP
may establish nondiscriminatory criteria to evaluate the credit requirements
for non-residential customers and apply those criteria in a nondiscriminatory
manner. If satisfactory credit cannot be demonstrated by the non-residential
customer using the criteria established by the REP, the customer may be required
to pay a deposit. No such deposit shall be required if the customer is a governmental
entity.
(c)
Initial deposits.
(1)
An affiliate REP or POLR shall offer a residential customer
who is required to pay an initial deposit the option of providing a written
letter of guarantee pursuant to subsection (j) of this section, instead of
paying a cash deposit. The letter of guarantee may be conditioned on the agreement
of the guarantor to become or remain a customer of the provider affiliate
REP or POLR for the term during which the guarantee is in effect. If the guarantor
fails to become, or ceases to be, a customer of the affiliate REP or POLR,
the provider affiliate REP or POLR may require the customer who was obligated
to pay the initial deposit to pay such deposit as a condition of continuing
the contract for service.
(2)
An affiliate REP or POLR shall not require an initial deposit
from an existing customer unless the customer was late paying a bill more
than once during the last 12 months of service or had service terminated or
disconnected for nonpayment. The customer may be required to pay this initial
deposit within ten days after issuance of a written termination notice (or,
in the case of the POLR, a notice of disconnection of service) that requests
such deposit. Instead of an initial deposit, the customer may pay the total
amount due on the current bill by the due date of the bill, provided the customer
has not exercised this option in the previous 12 months.
(3)
A competitive retailer that collects deposits from customers
shall do so pursuant to subsections (f)-(i), (k), and (m) of this section.
(d)
Additional deposits by existing customers.
(1)
During the first 12 months of a residential customer's
service, an affiliate REP or POLR may request an additional deposit if:
(A)
the average of the customer's actual billings for the last
12 months are at least twice the amount of the original estimated annual billings;
and
(B)
a termination notice has been issued (or, in the case of
the POLR, a notice of disconnection of service) for the account within the
previous 12 months.
(2)
A customer shall pay an additional deposit within ten days
after the affiliate REP has issued a termination of service notice (or, in
the case of the POLR, a notice of disconnection of service) and requested
the additional deposit.
(3)
Instead of an additional deposit, a residential customer
may pay the total amount due on the current bill by the due date of the bill,
provided the customer has not exercised this option in the previous 12 months.
(4)
An affiliate REP may terminate service (or in the case
of the POLR, disconnect service) if the additional deposit is not paid within
ten days of the request, provided a written termination or disconnection notice
has been issued to the customer. A termination or disconnection notice may
be issued concurrently with either the written request for the additional
deposit or current usage payment. An affiliate REP may initiate a "drop" request
to the registration agent if the customer does not pay the additional deposit
demanded by the affiliate REP as a condition of continuing service. However,
the affiliate REP is not required to request an additional deposit as a condition
of continuing service unless such a requirement is contained within the REP's
terms of service document.
(e)
Deposits for temporary or seasonal service and for weekend
residences. A REP may require a deposit sufficient to reasonably protect it
against the assumed risk for temporary or seasonal service or weekend residences,
as long as the policy is applied in a uniform and nondiscriminatory manner.
These deposits shall be returned according to guidelines set out in subsection
(k) of this section.
(f)
Amount of deposit.
(1)
The total of all deposits, initial and additional, required
by a REP, other than the POLR, from any residential customer shall not exceed
an amount equivalent to the greater of either:
(A)
the sum of the estimated billings for the next two months;
or
(B)
one-sixth of the estimated annual billing.
(2)
For the purpose of calculating the amount of the deposit,
the estimated billings shall include only charges for electric service that
are disclosed in the REP's terms of service document provided to the customer.
(3)
The POLR shall not collect a total deposit that exceeds
an amount equivalent to one-sixth of the estimated annual billing.
(g)
Interest on deposits. A REP that requires a deposit pursuant
to this section shall pay interest on that deposit at an annual rate at least
equal to that set by the commission on December 1 of the preceding year, pursuant
to Texas Utilities Code §183.003 (relating to Rate of Interest). If a
deposit is refunded within 30 days of the date of deposit, no interest payment
is required. If the REP keeps the deposit more than 30 days, payment of interest
shall be made retroactive to the date of deposit.
(1)
Payment of the interest to the customer shall be made annually,
if requested by the customer, or at the time the deposit is returned or credited
to the customer's account.
(2)
The deposit shall cease to draw interest on the date it
is returned or credited to the customer's account.
(h)
Notification to customers. When a REP requires a customer
to pay a deposit, the REP shall provide the customer written information about
the provider's deposit policy, the customer's right to post a guarantee in
lieu of a cash deposit, how a customer may be refunded a deposit, and the
circumstances under which a provider may increase a deposit. These disclosures
shall be included either in the Your Rights as a Customer disclosure or the
REP's terms of service document.
(i)
Records of deposits.
(1)
A REP that collects a deposit shall keep records to show:
(A)
the name and address of each depositor;
(B)
the amount and date of the deposit; and
(C)
each transaction concerning the deposit.
(2)
The REP that collects a deposit shall, upon the request
of the customer, issue a receipt of deposit to each customer paying a deposit
and shall provide means for a depositor to establish a claim if the receipt
is lost.
(3)
The REP shall maintain a record of each unclaimed deposit
for at least four years.
(4)
The REP shall make a reasonable effort to return unclaimed
deposits.
(j)
Guarantees of residential customer accounts. A guarantee
agreement in lieu of a cash deposit issued by any REP, if applicable, shall
conform to these minimum requirements:
(1)
A guarantee agreement between a REP and a guarantor shall
be in writing and shall be for no more than the amount of deposit the provider
would require on the customer's account pursuant to subsection (f) of this
section. The amount of the guarantee shall be clearly indicated in the signed
agreement. The REP may require, as a condition of the continuation of the
guarantee agreement, that the guarantor remain a customer of the REP during
the term of the guarantee agreement.
(2)
The guarantee shall be voided and returned to the guarantor
according to the provisions of subsection (k) of this section.
(3)
Upon default by a residential customer, the guarantor of
that customer's account shall be responsible for the unpaid balance of the
account only up to the amount agreed to in the written agreement.
(4)
If the guarantor ceases to be a customer of the REP, the
provider may treat the guarantee agreement as in default and demand the amount
of the cash deposit from the residential customer as a condition of continuing
service.
(5)
The REP shall provide written notification to the guarantor
of the customer's default, the amount owed by the guarantor, and the due date
for the amount owed.
(A)
The REP shall allow the guarantor 16 days from the date
of notification to pay the amount owed on the defaulted account. If the sixteenth
day falls on a holiday or weekend, the due date shall be the next business
day.
(B)
The REP may transfer the amount owed on the defaulted account
to the guarantor's own electric service bill provided the guaranteed amount
owed is identified separately on the bill as required by §25.479 of this
title (relating to Issuance and Format of Bills).
(6)
The REP may initiate termination of service (or disconnection
of service for the POLR) to the guarantor for nonpayment of the guaranteed
amount only if the termination or service (or, where applicable, the disconnection
of service) was disclosed in the terms of service document, and only after
proper notice as described by paragraph (5) of this subsection and §25.482
of this title (relating to Termination of Contract) or §25.483 of this
title (relating to Disconnection of Service).
(k)
Refunding deposits and voiding letters of guarantee.
(1)
Retention period for deposits and letters of guarantee.
(A)
A deposit held by a POLR shall be refunded when the customer
has paid POLR bills for service for 12 consecutive residential billings or
for 24 consecutive non-residential billings without having service disconnected
for nonpayment of a bill and without having more than two occasions in which
a bill was delinquent.
(B)
A REP, other than the POLR, may keep a deposit for the
entire time a customer receives electric service from the REP.
(C)
Upon termination of a customer's electric service, a REP
shall either transfer the deposit plus accrued interest to the customer's
new REP or promptly refund the deposit plus accrued interest to the customer,
at the customer's direction. The REP may subtract from the amount refunded
any amounts still owed by the customer to the REP. If the REP obtained a guarantee,
such guarantee shall be voided and returned to the guarantor. Alternatively,
the REP may provide the guarantor with written documentation that the contract
has been voided. If the customer does not meet these refund criteria, the
deposit and interest or the letter of guarantee may be retained.
(2)
If a customer's service is not connected, or is terminated
or disconnected, the REP shall promptly void and return to the guarantor all
letters of guarantee on the account or provide written documentation that
the contract has been voided, or refund the customer's deposit plus accrued
interest on the balance, if any, in excess of the unpaid bills for service
furnished. Similarly, if the guarantor's service is not connected, or is terminated
or disconnected, the REP shall promptly void and return to the guarantor all
letters of guarantee or provide written documentation that the guarantees
have been voided. This provision does not apply when the customer or guarantor
moves or changes the address where service is provided, as long as the customer
or guarantor remains a customer of the REP.
(l)
Re-establishment of credit. Every customer who previously
has been a customer of the REP and whose service has been terminated or disconnected
for nonpayment of bills or theft of service by that customer (meter tampering
or bypassing of meter) may be required, before service is reinstated, to pay
all amounts due to the REP or execute a deferred payment agreement, if offered,
and reestablish credit. Upon request, the REP shall reasonably demonstrate
the amount of electric service received, but not paid for, and the reasonableness
of any charges for the unpaid service, and any other charges required to be
paid as a condition of electric service restoration to such premise.
(m)
Upon sale or transfer of company. Upon the sale or transfer
of a REP or the designation of an alternative POLR for the customer's electric
service, the seller or transferee shall provide the legal successor to the
original provider all deposit records, provided that the deposits were not
returned to the customers and the legal successor accepts transfer of such
deposits.
§25.479.Issuance and Format of Bills.
(a)
Application. This section applies to a retail electric
provider (REP) that is responsible for issuing electric service bills to retail
customers, unless the REP is issuing a consolidated bill (both energy services
and transmission and distribution services) on behalf of an electric cooperative
or municipally owned utility. This section does not apply to a municipally
owned utility or electric cooperative issuing bills to its customers in its
own service territory.
(b)
Frequency and delivery of bills.
(1)
Until January 1, 2004, a REP shall issue a bill monthly
to each customer, unless service is provided for a period of less than one
month. Beginning January 1, 2004, a REP may issue a bill less frequently than
monthly if both the customer and the REP agree to such an arrangement.
(2)
Bills shall be issued as promptly as practicable after
reading meters or obtaining the meter usage and other billing determinants
from the transmission and distribution utility, the municipally owned utility
or the electric cooperative.
(3)
Bills shall be issued to residential customers in writing
and delivered via the United States Postal Service (U.S. mail). REPs may provide
bills to a customer electronically if both the customer and the REP agree
to such an arrangement. An affiliate REP or a provider of last resort shall
not require a customer to agree to such an arrangement as a condition of receiving
electric service.
(4)
In no event shall a REP charge a customer a fee for receiving
a bill.
(c)
Bill content.
(1)
Each customer's bill shall include the following information:
(A)
The certified name and address of the REP and the number
of the license issued to the REP by the commission;
(B)
A toll-free telephone number, in bold-face type, that the
customer can call during specified hours for inquiries and to make complaints
about the bill;
(C)
A toll-free telephone number that the customer may call
24 hours a day, seven days a week, to report power outages and concerns about
the safety of the electric power system;
(D)
The service address, electric service identifier (ESI),
and account number of the customer;
(E)
The service period for which the bill is rendered;
(F)
The date on which the bill was issued;
(G)
The payment due date of the bill and, if different, the
date by which payment from the customer must be received by the REP to avoid
a late charge or other collection action;
(H)
The current charges for electric service as disclosed in
the customer's terms of service document, exclusive of applicable taxes, and
a separate calculation of the average unit price of the current charge for
electric service for the current billing period, labeled, "The average price
you paid for electric service this month." This calculation shall reflect
all fixed and variable recurring charges, but not include any nonrecurring
charges or credits, which is expressed as a cents per kilowatt-hour rounded
to the nearest one-tenth of one cent. If the customer is on a level or average
payment plan, the level or average payment should be clearly shown in addition
to the usage-based rate;
(I)
The identification and itemization of recurring charges
other than for electric service as disclosed in the customer's terms of service
document;
(J)
The itemization and amount included in the amount due for
any other non-recurring charge, including late fees, returned check fees,
restoration of service fees, or other fees disclosed in the REP's terms of
service document provided to the customer;
(K)
The total current charges, balances from the preceding
bill, payments made by the customer since the preceding bill, the total amount
due and a checkbox for the customer to voluntarily donate money to the bill
payment assistance program;
(L)
The beginning and ending meter readings; the kind and number
of units measured, whether the bill was issued based on estimated usage, and
any conversions from meter reading units to billing units, or any other calculations
to determine billing units from recording or other devices, or any other factors
used in determining the bill, unless the customer is provided conversion charts;
(M)
Any amount owed under a written guarantee contract provided
the guarantor was previously notified in writing by the REP as required by §25.478
of this title (relating to Credit Requirements and Deposits);
(N)
A conspicuous notice of any services or products being
provided to the customer that have been added since the previous bill;
(O)
Notification of any changes in the customer's rates or
charges due to the operation of a variable rate feature previously disclosed
by the REP in the customer's terms of service document;
(P)
The notice required by §25.481(d) of this title (relating
to Unauthorized Charges); and
(Q)
If the REP has presented its electric service charges in
an unbundled fashion, it shall use the following terms as defined by the commission:
"transmission and distribution service"; "generation service"; "System Benefit
Fund"; and, where applicable, "transition charge," and "nuclear decommissioning
fee."
(2)
If the REP bundles its electric service charges, the REP
shall provide an itemization to the customer upon the customer's request.
(3)
In no event may a customer's electric bill contain charges
from a service provider other than the customer's designated REP.
(d)
Public service notices. A REP shall, as required by the
commission, provide brief public service notices to its customers. The REP
shall provide these public service notices to its customers on its billing
statements, as an insert in its billing statement, or by electronic communication,
as required by the commission.
(e)
Estimated bills. If a REP is unable to issue a bill based
on actual meter reading due to the failure of the transmission and distribution
utility, municipally owned utility or electric cooperative to obtain or transmit
a meter reading to the REP on a timely basis, the REP may issue a bill based
on an estimated reading and inform the customer of the reason for the issuance
of the estimated bill.
(f)
Record retention. A REP shall maintain monthly billing
and payment records for each account for at least 24 months after the date
the bill is mailed. The billing records shall contain sufficient data to reconstruct
a customer's billing for a given period. A copy of a customer's billing records
may be obtained by that customer on request, and may be obtained once per
year, at no charge.
(g)
Transfer of delinquent balances or credits. If the customer
has an outstanding balance or credit owed to the customer's current REP that
is due from a previous account in the same customer class, then the customer's
current REP may transfer that balance to the customer's current account. The
delinquent balance and specific account or address shall be identified as
such on the bill. There shall be no balance transfers between REPs, other
than transfer of a deposit, as specified in §25.478(k)(1)(C) of this
title.
§25.480.Bill Payment and Adjustments.
(a)
Application. This section applies to a retail electric
provider (REP) that is responsible for issuing electric service bills to retail
customers, unless the REP is issuing a consolidated bill (both energy services
and transmission and distribution services) on behalf of an electric cooperative
or municipally owned utility. This section does not apply to a municipally
owned utility or electric cooperative issuing bills to its customers in its
own service territory.
(b)
Bill due date. A REP shall state a payment due date on
the bill which shall not be less than 16 days after issuance. The issuance
date is the issuance date on the bill or, if there is no issuance date on
the bill, the postmark date on the envelope. A payment for electric service
is delinquent if not received by the REP or at the REP's authorized payment
agency by the close of business on the due date. If the sixteenth day falls
on a holiday or weekend, then the due date shall be the next business day
after the sixteenth day.
(c)
Penalty on delinquent bills for electric service. A one-time
penalty not to exceed 5.0% may be charged on a delinquent bill for electric
service. No such penalty shall apply to residential or small commercial customers
served by the provider of last resort (POLR), or to customers receiving a
low-income discount pursuant to the Public Utility Regulatory Act (PURA) §39.903(h).
The 5.0% penalty on delinquent bills may not be applied to any balance to
which the penalty has already been applied. A bill issued to a state agency,
as defined in the Government Code, Chapter 2251, shall be due and bear interest
if overdue as provided in Chapter 2251.
(d)
Overbilling. If charges are found to be higher than authorized
in the REP's terms and conditions for service, then the customer's bill shall
be corrected.
(1)
The correction shall be made for the entire period of the
overbilling.
(2)
If the REP corrects the overbilling within three billing
cycles of the error, it need not pay interest on the amount of the correction.
(3)
If the REP does not correct the overcharge within three
billing cycles of the error, it shall pay interest on the amount of the overcharge
at the rate set by the commission.
(A)
Interest on overcharges that are not adjusted by the REP
within three billing cycles of the bill in error shall accrue from the date
of payment or from the issuance date of the erroneous bill.
(B)
All interest shall be compounded monthly based on the approved
annual rate.
(C)
Interest shall not apply to leveling plans or estimated
billings.
(e)
Underbilling. If charges are found to be lower than authorized
by the REP's terms and conditions of service, or if the REP fails to bill
the customer for service, then the customer's bill may be corrected.
(1)
The REP may backbill the customer for the amount that was
underbilled. The backbilling shall not include charges that extend more than
six months from the date the error was discovered unless the underbilling
is a result of theft of service by the customer.
(2)
The REP may terminate service, or the POLR may disconnect
service, if the customer fails to pay the additional charges within a reasonable
time.
(3)
If the underbilling is $50 or more, the REP shall offer
the customer a deferred payment plan option for the same length of time as
that of the underbilling. A deferred payment plan need not be offered to a
customer whose underpayment is due to theft of service.
(4)
The REP shall not charge interest on underbilled amounts
unless such amounts are found to be the result of theft of service (meter
tampering, bypass, or diversion) by the customer, as defined in §25.126
of this title (relating to Meter Tampering). Interest on underbilled amounts
shall be compounded monthly at the annual rate. Interest shall accrue from
the day the customer is found to have first stolen the service.
(f)
Disputed bills. If there is a dispute between a customer
and a provider about the REP's bill for any service billed on the retail electric
bill, the REP shall promptly investigate and report the results to the customer.
The provider shall inform the customer of the complaint procedures of the
commission pursuant to §25.485 of this title (relating to Customer Access
and Complaint Handling).
(g)
Alternate payment programs or payment assistance.
(1)
Notice required. When a customer contacts a REP and indicates
inability to pay a bill or a need for assistance with the bill payment, the
REP shall inform the customer of all alternative payment and payment assistance
programs that are offered by or available from the REP, such as bill payment
assistance, deferred payment plans, disconnection moratoriums for the ill,
or low-income energy assistance programs, as applicable, and of the eligibility
requirements and procedure for applying for each.
(2)
Bill payment assistance programs.
(A)
Each REP shall implement a bill payment assistance program
for residential customers. At a minimum, such a program shall solicit voluntary
donations from customers by a check-off box on the retail electric bill.
(B)
Each REP shall provide an annual report to the commission
summarizing:
(i)
the total amount of customer donations;
(ii)
the amount of money set aside for bill payment assistance;
(iii)
the assistance agency or agencies selected to disburse
funds to customers; and
(iv)
the amount of money provided to each assistance agency
to disburse funds to customers.
(C)
An assistance agency selected by a REP to disburse bill
payment assistance funds shall not discriminate in the distribution of such
funds to customers based on the customer's race, creed, color, national origin,
ancestry, sex, marital status, lawful source of income, disability, familial
status, location of customer in an economically distressed geographic area,
or qualification for low-income or energy efficiency services.
(h)
Level and average payment plans. A REP shall offer a level
or average payment plan to its customers. A REP shall not limit participation
to only credit-worthy customers. A REP may collect under-recovered costs from
a customer annually, or upon termination of service to the customer. A REP
shall refund any over-recovered amounts to customers annually, or upon termination
of service to the customer. Additionally, a REP may initiate its normal collection
activity if a customer fails to make a timely payment according to such a
plan. All details concerning a levelized or average payment program shall
be disclosed in the customer's terms of service document.
(i)
Payment arrangements. A payment arrangement is any agreement
between the REP and a customer that allows a customer to pay the outstanding
bill after its due date, but before the due date of the next bill. If the
REP issued a termination notice (or in the case of the POLR, a disconnection
notice) before the payment arrangement was made, that termination or disconnection
should be suspended until after the due date for the payment arrangement.
If a customer does not fulfill the terms of the payment arrangement, service
may be terminated (or disconnected in the case of the POLR) after the later
of the due date for the payment arrangement or the termination or disconnection
date indicated in the notice, without issuing an additional disconnection
notice. A REP may switch terminated customers to the POLR by notifying the
registration agent.
(j)
Deferred payment plans. A deferred payment plan is an arrangement
between the REP and a customer that allows a customer to pay an outstanding
bill in installments that extend beyond the due date of the next bill. A deferred
payment plan may be established in person or by telephone, but all deferred
payment plans shall be confirmed in writing by the REP.
(1)
A REP may offer a deferred payment plan to any residential
customer who has expressed an inability to pay his or her bill.
(2)
A REP shall offer a deferred payment plan to a customer
who has been underbilled, as described subsection (e) of this section, or
to customers who qualify for such plans pursuant to §25.482(f) of this
title (relating to Termination of Contract) or §25.483(i) of this title
(relating to Disconnection of Service).
(3)
An affiliate REP or POLR shall offer such plans unless
the customer:
(A)
has been issued more than two termination or disconnection
notices during the preceding 12 months; or
(B)
has received service from the affiliate REP or POLR for
less than three months, and the customer lacks:
(i)
sufficient credit; or
(ii)
a satisfactory history of payment for electric service
from a previous REP (or its predecessor electric utility).
(4)
Any deferred payment plans offered by a REP shall be implemented
in a non-discriminatory manner, according to the provisions of this subsection.
(5)
Every deferred payment plan offered by a REP shall provide
that the delinquent amount be paid in equal installments over at least three
billing cycles.
(6)
A copy of the deferred payment plan shall be provided to
the customer and:
(A)
shall include a statement, in type no smaller than 14 point
size, that states "If you are not satisfied with this agreement, or if the
agreement was made by telephone and you feel this does not reflect your understanding
of that agreement, contact your retail electric provider." In addition, where
the customer and the REP's representative or agent meet in person, the representative
shall read the preceding statement to the customer. The REP shall provide
information to the customer in English or Spanish as necessary to make the
preceding required statement understandable to the customer;
(B)
may include a 5.0% penalty for late payment but shall not
include a finance charge;
(C)
shall state the length of time covered by the plan;
(D)
shall state the total amount to be paid under the plan;
(E)
shall state the specific amount of each installment;
(F)
shall allow for the termination or disconnection of service
(as appropriate) if the customer does not fulfill the terms of the deferred
payment plan, and shall state the terms for disconnection or termination of
service;
(G)
shall not refuse a customer participation in such a program
on any basis set forth in §25.471(b)(5) of this title (relating to General
Provisions of Customer Protection Rules); and
(H)
shall allow either the customer or the REP to initiate
a renegotiation of the deferred payment plan if the customer's economic or
financial circumstances change substantially during the time of the deferred
payment plan.
(7)
A REP may pursue termination of service (or disconnection
of service in the case of the POLR) when a customer does not meet the terms
of a deferred payment plan. However, service shall not be terminated or disconnected
until appropriate notice has been issued pursuant to §25.483 of this
title for the POLR or §25.482 of this title for other REPs to the customer
indicating that the customer has not met the terms of the plan. The REP may
renegotiate the deferred payment plan agreement prior to disconnection. If
the customer does not fulfill the terms of the plan, and the customer was
previously provided a disconnection notice or termination notice for the outstanding
amount, no additional disconnection or termination notice shall be required.
(k)
Allocation of partial payments. A REP shall allocate a
partial payment by the customer first to the oldest balance due for electric
service, followed by the current amount due for electric service. When there
is no longer a balance for electric service, payment may be applied to other
non-electric services billed by the REP. A contract for electric service cannot
be terminated for non-payment of non-electric services.
§25.481.Unauthorized Charges.
(a)
After a customer has enrolled or switched to a retail electric
provider (REP), pursuant to §25.474 of this title (relating to Selection
or Change of Retail Electric Provider), any subsequent services offered by
the REP that will be billed on the customer's electric bill shall be authorized
by the customer consistent with this section. A REP may obtain authorization
for an additional product or service to appear on the bill for existing customers
by using any of the methods set forth in §25.474 of this title.
(b)
Requirements for billing charges. A REP shall meet all
of the following requirements before including any charges on the customer's
electric bill:
(1)
Inform the customer. The REP has thoroughly informed the
customer of the product or service being offered, including all associated
charges, and has explicitly informed the customer that the associated charges
for the product or service will appear on the customer's electric bill.
(2)
Obtain customer consent. The customer has clearly and explicitly
consented to obtaining the product or service offered and to have the associated
charges appear on the customer's electric bill. The consent shall be authorized
and verified by the REP in accordance with §25.474(f) of this title.
A record of the consent, including verification, shall be maintained by the
REP for at least 24 months, beginning immediately after the consent and verification
are obtained.
(3)
Provide contact information. The REP has provided the customer
with a toll-free telephone number the customer may call and an address to
which the customer may write to resolve any billing dispute and to answer
questions.
(c)
Responsibilities for unauthorized charges.
(1)
If a customer's electric bill is charged for any product
or service without proper customer consent and verification of authorization
in compliance with this section, the REP that billed the customer, when it
learns or is notified that any charge that has not been authorized, shall
promptly, but not later than 45 days thereafter:
(A)
cease charging the customer for the unauthorized product
or service;
(B)
remove the unauthorized charge from the customer's bill;
(C)
refund or credit to the customer all money that has been
paid by the customer for any unauthorized charge, and if any unauthorized
charge that has been paid is not refunded or credited within three billing
cycles, pay interest at an annual rate established by the commission pursuant
to §25.478(g) of this title (relating to Credit Requirements and Deposits)
on the amount of any unauthorized charge until it is refunded or credited;
and
(D)
on the customer's request, provide the customer with all
billing records under its control related to any unauthorized charge within
15 business days after the date of the removal from the customer's electric
bill.
(2)
A REP shall not:
(A)
seek to terminate or disconnect electric service to any
customer for nonpayment of an unauthorized charge;
(B)
file an unfavorable credit report against a customer who
has not paid charges that the customer has alleged were unauthorized unless
the dispute regarding the unauthorized charges is ultimately resolved against
the customer. The customer shall remain obligated to pay any charges that
are not in dispute, and this paragraph does not apply to those undisputed
charges; or
(C)
re-bill the customer for any unauthorized charge.
(3)
A REP, other than a municipally owned utility or an electric
cooperative, shall maintain for at least 24 months a record of every customer
who has experienced any unauthorized charge for a product or service on the
customer's electric bill and has notified the REP of the unauthorized charge.
The record shall contain for each unauthorized charge:
(A)
the date each customer requested that the REP remove the
unauthorized charge from the customer's electric bill;
(B)
the date the unauthorized charge was removed from the customer's
electric bill; and
(C)
the date the customer was refunded or credited any money
that the customer paid for the unauthorized charges.
(d)
Notice to customers. Any bill sent to a customer from a
REP shall include a statement, prominently located on the bill, that if the
customer believes the bill includes unauthorized charges, the customer may
contact the REP to dispute such charges and may file a complaint with the
Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas 78711-3326,
(512) 936-7120 or toll-free in Texas at (888) 782-8477. Hearing and speech-impaired
individuals with text telephones (TTY) may contact the commission at (512)
936-7136.
(e)
Compliance and enforcement.
(1)
Records of customer authorizations. A REP shall provide
proof of the customer's authorization and verification to the customer and/or
the commission upon request.
(2)
Records of unauthorized charges. A REP shall provide a
copy of records maintained under the requirements of subsection (c)(3) of
this section to the commission upon request.
§25.482.Termination of Contract.
(a)
Termination policy. A retail electric provider (REP) may
terminate its contract with a customer for nonpayment of electric service
charges and, if no other REP extends service to that customer, service shall
be offered by the provider of last resort (POLR). If a customer makes payment
or satisfactory payment arrangements prior to the termination date, a REP
shall continue serving the customer under the existing terms and conditions
that were in effect prior to the issuance of a termination notice. If a REP
chooses to terminate its contract with a customer, it shall follow the procedures
in this section, or modify them in ways that are more generous to the customer
in terms of the cause for termination, the timing of the termination notice,
and the period between notice and termination. Nothing in this section shall
be interpreted to require a REP to terminate its contract with a customer.
(b)
Termination prohibited. A REP may not terminate its contract
with a customer for any of the following reasons:
(1)
delinquency in payment for electric service by a previous
occupant of the premises if that occupant is not of the same household;
(2)
failure to pay for any charge that is not related to electric
service;
(3)
failure to pay for a different type or class of electric
utility service unless charges for such service were included on that account's
bill at the time service was initiated;
(4)
failure to pay charges arising from an underbilling, except
theft of service, more than six months prior to the current billing;
(5)
failure to pay disputed charges until a determination as
to the accuracy of the charges has been made by the REP or the commission,
and the customer has been notified of this determination;
(6)
failure to pay charges arising from an underbilling due
to any faulty metering, unless the meter has been tampered with or unless
such underbilling charges are due under §25.126 of this title (relating
to Meter Tampering); or
(7)
failure to pay an estimated bill other than a bill rendered
pursuant to an approved meter-reading plan, unless the transmission and distribution
utility is unable to read the meter due to circumstances beyond its control.
(c)
Termination on holidays or weekends. Unless requested by
the customer, a REP shall not terminate a contract for electric service on
holidays or weekends.
(d)
Termination due to abandonment by the REP. A REP shall
not abandon a customer or a service area without advance written notice to
its customers and the commission and approval from the commission. In the
event a provider terminates a customer's contract due to abandonment, that
provider shall not collect or attempt to collect penalties from that customer.
(e)
Termination of energy assistance clients. A REP shall not
terminate a contract for service to a delinquent residential customer for
a billing period in which the provider receives a pledge, letter of intent,
purchase order, or other notification that an energy assistance provider is
forwarding sufficient payment to continue service.
(f)
Extreme weather. A REP shall not seek to terminate a residential
customer's contract for electric service due to non-payment during an extreme
weather emergency. A REP and shall offer residential customers a deferred
payment plan that complies with the requirements of §25.480 of this title
(relating to Bill Payment and Adjustments) for bills that become due during
the weather emergency. The term "extreme weather emergency" means the weather
conditions described in §25.483 of this title (relating to Disconnection
of Service).
(g)
Termination notices. Except as provided in §25.475
of this title (relating to Information Disclosures to Residential and Small
Commercial Customers) a REP may issue a notice of termination of contract.
Any termination notice shall:
(1)
not be issued before the first day after the bill is due,
to enable the REP to determine whether the payment was received by the due
date. Payment of the delinquent bill at the REP's authorized payment agency
is considered payment to the REP.
(2)
be a separate mailing or hand delivered with a stated date
of termination with the words "termination notice" or similar language prominently
displayed. A REP may send an additional notice by email or facsimile.
(3)
have a termination date that is not a holiday or weekend
day and that is not less than ten days after the notice is issued.
(h)
Contents of termination notice. Any termination notice
shall include the following information:
(1)
The reason for the termination of the contract;
(2)
The actions, if any, that the customer may take to avoid
the termination of the contract;
(3)
If the customer is in default, the amount of all fees or
charges which will be assessed against the customer as a result of the default
under the contract, if any, as set forth in the REP's terms of service document
provided to the customer;
(4)
The amount overdue, if applicable;
(5)
A toll-free telephone number that the customer can use
to contact the REP to discuss the notice of termination or to file a complaint
with the REP, and the following statement: "If you are not satisfied with
our response to your inquiry or complaint, you may file a complaint by calling
or writing the Public Utility Commission of Texas, P.O. Box 13326, Austin,
Texas, 78711-3326; Telephone: (512) 936-7120 or toll-free in Texas at (888)
782-8477. Hearing and speech impaired individuals with text telephones (TTY)
may contact the commission at (512) 936-7136."
(6)
A statement that informs the customer of the right to obtain
services from another licensed REP or a POLR, and that information about other
REPs or the POLR can be obtained from the commission and the POLR. Customers
that do not exercise their right to choose another REP shall have their electric
service transferred to the POLR, in accordance with the applicable rules or
protocols, and may be required to pay a deposit, or prepay, to receive ongoing
electric service. The REP shall not state or imply that nonpayment by the
customer will result in physical disconnection of electricity or affect the
customer's ability to obtain electric service from another REP or the POLR.
(7)
If a deposit is being held by the REP on behalf of the
customer, a statement that the deposit will applied against the final bill
(if applicable) and the remaining deposit with be either returned to the customer
or transferred to the new REP, at the customer's designation.
(8)
The availability of deferred payment or other billing arrangements,
if any, from the REP, and the availability of any state or federal energy
assistance programs and information on how to get further information about
those programs.
(9)
A description of the activities that the REP will use to
collect payment, including the use of debt collection agencies, small claims
court and other legal remedies allowed by law, if the customer does not pay
or make acceptable payment arrangements with the REP.
(i)
Notification of the registration agent. After the expiration
of the notice period in subsection (g) of this section, a REP shall notify
the registration agent of a switch request in a manner established by the
registration agent so that the customer will receive service from the POLR,
unless the customer selects another REP prior to the effective date of the
switch.
(j)
Customer's right to terminate a contract without penalty.
As disclosed in the customer's terms of service document, a customer may terminate
a contract without penalty in the event:
(1)
The customer moves to another premises;
(2)
Market conditions change and the contract allows the REP
to terminate the contract without penalty in response to changing market conditions;
or
(3)
A REP notifies the customer of a material change in the
terms and conditions of their service agreement.
§25.483.Disconnection of Service.
(a)
Disconnection and Reconnection policy. Only a transmission
and distribution utility, municipally owned utility, or electric cooperative
shall perform physical disconnections and reconnections. Unless otherwise
stated, it is the responsibility of a retail electric provider (REP) to request
such action from the appropriate transmission and distribution utility, municipally
owned utility, or electric cooperative in accordance with that entity's relevant
tariffs and in compliance with the requirements of this section. If a REP
chooses to have a customer's electric service disconnected, it shall follow
the procedures in this section or procedures that are more generous to the
customer in terms of the cause for disconnection, the timing of the disconnection
notice, and the period between notice and disconnection. Nothing in this section
shall be interpreted to require a REP to disconnect a customer.
(b)
Disconnection with notice. A provider of last resort (POLR)
may authorize the disconnection of a customer's electric service after proper
notice and not before the first day after the termination date in the notice
for any of the following reasons:
(1)
failure to pay a bill owed to the POLR or to make deferred
payment arrangements by the date of disconnection stated on the disconnection
notice;
(2)
failure to comply with the terms of a deferred payment
agreement made with the POLR;
(3)
violation of the POLR's terms and conditions on using service
in a manner that interferes with the service of others or the operation of
nonstandard equipment, if a reasonable attempt has been made to notify the
customer and the customer is provided with a reasonable opportunity to remedy
the situation;
(4)
failure to pay a deposit as required by §25.478 of
this title (relating to Credit Requirements and Deposits); or
(5)
failure of the guarantor to pay the amount guaranteed,
when the POLR has a written agreement, signed by the guarantor, that allows
for disconnection of the guarantor's service.
(c)
Disconnection without prior notice. A REP, including a
POLR, REP or affiliate REP, may authorize disconnection of a customer's electric
service without prior notice for any of the following reasons:
(1)
Where a known dangerous condition exists for as long as
the condition exists. Where reasonable, given the nature of the hazardous
condition, the REP, or its agent, shall post a notice of disconnection and
the reason for the disconnection at the place of common entry or upon the
front door of each affected residential unit as soon as possible after service
has been disconnected;
(2)
Where service is connected without authority by a person
who has not made application for service;
(3)
Where service is reconnected without authority after disconnection
for nonpayment;
(4)
Where there has been tampering with the equipment of the
transmission and distribution utility, municipally owned utility, or electric
cooperative; or
(5)
Where there is evidence of theft of service.
(d)
Disconnection prohibited. A POLR shall not authorize a
disconnection for nonpayment of a customer's electric service for any of the
following reasons:
(1)
Delinquency in payment for electric service by a previous
occupant of the premises;
(2)
Failure to pay for any charge that is not for electric
service regulated by the commission, including competitive energy service,
merchandise, or other services that are optional and are not included in regulated
POLR service;
(3)
Failure to pay for a different type or class of electric
service unless charges for such service were included on that account's bill
at the time service was initiated;
(4)
Failure to pay charges arising from an underbilling, except
theft of service, more than six months prior to the current billing;
(5)
Failure to pay disputed charges, except for the amount
under dispute, until a determination as to the accuracy of the charges has
been made by the POLR or the commission, and the customer has been notified
of this determination;
(6)
Failure to pay charges arising from an underbilling due
to any faulty metering, unless the meter has been tampered with or unless
such underbilling charges are due under §25.126 of this title (relating
to Meter Tampering); or
(7)
Failure to pay an estimated bill other than a bill rendered
pursuant to an approved meter-reading plan, unless the POLR is unable to obtain
the meter reading due to circumstances beyond its control.
(e)
Disconnection on holidays or weekends. Unless a dangerous
condition exists or the customer requests disconnection, a POLR shall not
request disconnection of a customer's electric service for nonpayment on a
holiday or weekend, or the day immediately preceding a holiday or weekend,
unless the POLR's personnel are available on those days to take payments and
request reconnection of service and personnel of the transmission and distribution
utility, municipally owned utility, or electric cooperative are available
to reconnect service.
(f)
Disconnection due to abandonment by the POLR. A POLR shall
not abandon a customer or a service area without written notice to its customers
and approval from the commission, in accordance with §25.43 of this title
(relating to Provider of Last Resort).
(g)
Disconnection of ill and disabled. A POLR shall not authorize
a disconnection for nonpayment of electric service at a permanent, individually
metered dwelling unit of a delinquent customer when that customer establishes
that disconnection of service will cause some person residing at that residence
to become seriously ill or more seriously ill.
(1)
Each time a customer seeks to avoid disconnection of service
under this subsection, the customer shall accomplish all of the following
by the stated date of disconnection:
(A)
Have the person's attending physician (for purposes of
this subsection, the term "physician" shall mean any public health official,
including medical doctors, doctors of osteopathy, nurse practitioners, registered
nurses, and any other similar public health official) call or contact the
REP by the stated date of disconnection;
(B)
Have the person's attending physician submit a written
statement to the REP; and
(C)
Enter into a deferred payment plan.
(2)
The prohibition against service disconnection provided
by this subsection shall last 63 days from the issuance of the bill for electric
service or a shorter period agreed upon by the REP and the customer or physician.
(h)
Disconnection of energy assistance clients. A POLR shall
not authorize a disconnection for nonpayment of electric service to a delinquent
residential customer for a billing period in which the POLR receives a pledge,
letter of intent, purchase order, or other notification that the energy assistance
provider is forwarding sufficient payment to continue service.
(i)
Disconnection during extreme weather. A POLR shall not
authorize a disconnect for nonpayment of electric service for any customer
in a county in which an extreme weather emergency occurs. A POLR shall offer
residential customers a deferred payment plan that complies with the requirements
of §25.480 of this title (relating to Bill Payment and Adjustments) for
bills that become due during the weather emergency. The term "extreme weather
emergency" shall mean a day when:
(1)
the previous day's highest temperature did not exceed 32
degrees Fahrenheit, and the temperature is predicted to remain at or below
that level for the next 24 hours anywhere in the county, according to the
nearest National Weather Service (NWS) reports; or
(2)
the NWS issues a heat advisory for a county, or when such
advisory has been issued on any one of the preceding two calendar days in
a county.
(j)
Disconnection of master-metered apartments. When a bill
for electric service is delinquent for a master-metered apartment complex:
(1)
The POLR shall send a notice to the customer as required
by subsection (k) of this section. At the time such notice is issued, the
POLR, or its agents, shall also inform the customer that notice of possible
disconnection will be provided to the tenants of the apartment complex in
six days if payment is not made before that time.
(2)
At least six days after providing notice to the customer
and at least four days before disconnecting, the provider shall post a minimum
of five notices in conspicuous areas in the corridors or other public places
of the apartment complex. Language in the notice shall be in large type and
shall read: "Notice to residents of (name and address of apartment complex):
Electric service to this apartment complex is scheduled for disconnection
on (date), because (reason for disconnection)."
(k)
Disconnection notices. A disconnection notice for nonpayment
issued by a POLR shall:
(1)
not be issued before the first day after the bill is due,
to enable the POLR to determine whether the payment was received by the due
date. Payment of the delinquent bill at the POLR's authorized payment agency
is considered payment to the POLR;
(2)
be a separate mailing or hand delivered notice with a stated
date of disconnection with the words "disconnection notice" or similar language
prominently displayed;
(3)
have a disconnection date that is not a holiday or weekend
day, and is not less than ten days after the notice is issued;
(4)
include a statement notifying the customer that if the
customer needs assistance paying the bill by the due date, or is ill and unable
to pay the bill, the customer may be able to make some alternate payment arrangement,
establish deferred payment plan, or possibly secure payment assistance. The
notice shall also advise the customer to contact the provider for more information.
(l)
Contents of disconnection notice. Any disconnection notice
shall include the following information:
(1)
The reason for disconnection;
(2)
The actions, if any, that the customer may take to avoid
disconnection of service;
(3)
The amount of all fees or charges which will be assessed
against the customer as a result of the default;
(4)
The amount overdue;
(5)
A toll-free telephone number that the customer can use
to contact the POLR to discuss the notice of disconnection or to file a complaint
with the POLR, and the following statement: "If you are not satisfied with
our response to your inquiry or complaint, you may file a complaint by calling
or writing the Public Utility Commission of Texas, P.O. Box 13326, Austin,
Texas, 78711-3326; Telephone: (512) 936-7120 or toll-free in Texas at (888)
782-8477. Hearing and speech impaired individuals with text telephones (TTY)
may contact the commission at (512) 936-7136;"
(6)
A statement that informs the customer of the right to obtain
services from another licensed REP, and that information about other REPs
can be obtained from the commission;
(7)
If a deposit is being held by the REP on behalf of the
customer, a statement that the deposit will be applied against the final bill
(if applicable) and the remaining deposit will be either returned to the customer
or transferred to the new REP, at the customer's designation;
(8)
The availability of deferred payment or other billing arrangements,
if any, from the POLR, and the availability of any state or federal energy
assistance programs and information on how to get further information about
those programs; and
(9)
A description of the activities that the POLR will use
to collect payment, including the use of debt collection agencies, small claims
court and other legal remedies allowed by law, if the customer does not pay
or make acceptable payment arrangements with the POLR.
(m)
Reconnection of service. Upon a customer's satisfactory
correction of reasons for disconnection, the REP shall notify the transmission
and distribution utility, municipally owned utility, or electric cooperative,
within one day, to reconnect the customer's electric service and shall reinstate
the service.
§25.484.Do Not Call List.
(a)
The commission or its designated agent will maintain or
cause to be maintained a "Do Not Call List" of customers who do not want to
receive telemarketing calls from retail electric providers (REPs). The commission
will provide customers with a variety of methods to be included on the list,
including orally, in writing, and commercially acceptable electronic communication
such as fax and e-mail. A customer shall remain on the "Do Not Call List"
for five years or until the customer affirmatively requests to be removed
from the list, whichever occurs sooner.
(b)
Prohibition. A REP is prohibited from telemarketing to
customers whose names are on the "Do Not Call List." A REP shall be in compliance
with this provision if the REP obtains the most recent version of the list
on at least a quarterly basis and removes the names of customers who are on
the "Do Not Call List" from its telemarketing lists within five calendar days.
(c)
Notice. A REP shall include notice of the existence of
the "Do Not Call List" in the Your Rights as a Customer disclosure or terms
of service document. The notice shall explain what the "Do Not Call List"
is, the fee for placement on the list, and how a customer can request that
he or she be added to or removed from that list by contacting the commission
or the commission's agent for the implementation of the list.
§25.485.Customer Access and Complaint Handling.
(a)
Customer access.
(1)
Each retail electric provider (REP) or aggregator shall
ensure that customers have reasonable access to its service representatives
to make inquiries and complaints, discuss charges on customers bills, terminate
competitive service, and transact any other pertinent business.
(2)
Telephone access shall be toll-free and shall afford customers
a prompt answer during normal business hours.
(3)
Each REP shall provide a 24-hour automated telephone message
instructing the caller how to report any service interruptions or electrical
emergencies.
(4)
Each REP and aggregator shall employ 24-hour capability
for accepting customer contract cancellation by telephone, pursuant to rights
of cancellation in §25.474(h)of this title (relating to Selection or
Change of Retail Electric Provider).
(b)
Complaint handling. No REP or aggregator shall limit a
residential or small commercial customer's right to make a formal or informal
complaint to the commission. A REP or aggregator shall not require a residential
or small commercial customer to make a formal or informal complaint to the
commission. A REP or aggregator shall not require a residential or small commercial
customer as part of the terms of service to engage in alternative dispute
resolution, including requiring complaints to be submitted to arbitration
or mediation by third parties.
(c)
Complaints to REPs or aggregators. A customer for service
may submit a complaint in person, or by letter, facsimile transmission, e-mail,
or by telephone with the REP or aggregator. The REP or aggregator shall promptly
investigate and advise the complainant of the results within 21 days. A customer
who is dissatisfied with the REP's or aggregator's review shall be informed
of the right to file a complaint with the REP's or aggregator's supervisory
review process, if available, and, if not available, the commission and the
Office of Attorney General, Consumer Protection Division. Any supervisory
review conducted by the REP or aggregator shall result in a decision communicated
to the complainant within ten business days of the request. If the REP or
aggregator does not respond to the customer's complaint in writing, the REP
or aggregator shall orally inform the customer of the ability to obtain the
REP's or aggregator's response in writing upon request.
(d)
Complaints to the commission.
(1)
Informal complaints.
(A)
If a complainant is dissatisfied with the results of a
REP's or aggregator's complaint investigation or supervisory review, the REP
or aggregator shall advise the complainant of the commission's informal complaint
resolution process and the following contact information for the commission:
Public Utility Commission of Texas, Customer Protection Division, P.O. Box
13326, Austin, Texas 78711-3326; (512) 936-7120 or in Texas (toll-free) 1-888-782-8477,
fax (512) 936-7003, e-mail address: customer@puc.state.tx.us, Internet website
address: www.puc.state.tx.us, TTY (512) 936-7136, and Relay Texas (toll-free)
1-800-735-2989.
(B)
Customers are encouraged to include the following in their
complaint:
(i)
The customer's name, address, and telephone number;
(ii)
The name of the REP or aggregator;
(iii)
The customer account number or electric service identifier
(ESI);
(iv)
An explanation of the facts relevant to the complaints;
and
(v)
Any other documentation that supports the complaint, including
copies of bills or contract documents.
(C)
The REP or aggregator shall investigate all informal complaints
and advise the commission in writing of the results of the investigation within
21 days after the complaint is forwarded to the REP.
(D)
The commission shall review the complaint information and
notify the complainant of the result of the commission's investigation.
(E)
While an informal complaint process is pending:
(i)
The REP shall not initiate collection activities, including
termination or disconnection of service (as appropriate) or report the customer's
delinquency to a credit reporting agency with respect to the disputed portion
of the bill.
(ii)
A customer shall be obligated to pay any undisputed portion
of the bill and the REP may pursue termination or disconnection of service
(as appropriate) for nonpayment of the undisputed portion after appropriate
notice.
(F)
The REP or aggregator shall keep a record for two years
after determination by the commission of all informal complaints forwarded
to it by the commission. This record shall show the name and address of the
complainant, the date, nature and adjustment or disposition of the complaint.
Protests regarding commission-approved rates or rates and charges that are
not regulated by the commission, but which are disclosed to the customer in
the terms of service disclosures, need not be recorded.
(2)
Formal complaints. If the complainant is not satisfied
with the results of the informal complaint process, the complainant may file
a formal complaint with the commission. This process may include the formal
docketing of the complaint as provided in §22.242 of this title (related
to Complaints).
§25.491.Record Retention and Reporting Requirements.
(a)
Application. This section does not apply to a REP that
is a municipally owned utility or electric cooperative.
(b)
Record retention.
(1)
Each REP and aggregator shall establish and maintain records
and data that are sufficient to:
(A)
Verify its compliance with the requirements of any applicable
commission rules; and
(B)
Support any investigation of customer complaints.
(2)
All records required by this subchapter shall be retained
for no less than two years, unless otherwise specified.
(3)
Unless otherwise prescribed by the commission or its authorized
representative, all records required by this subchapter shall be provided
to the commission within 15 calendar days of its request.
(c)
Annual reports. On June 1 of each year, a REP shall report
the information required by §25.107 of this title (relating to Certification
of Retail Electric Providers) and the following additional information on
a form approved by the commission for the 12-month period ending December
31 of the prior year:
(1)
The number of residential customers served, by nine-digit
zip code and census tract, by month, to the extent that such zip code and
census tract information is available;
(2)
The number of written denial of service notices issued
by the REP, by month, by customer class, by nine-digit zip code and census
tract;
(3)
The number and total aggregated dollar amount of deposits
held by the REP, by month, by customer class, by nine-digit zip code and census
tract; and
(4)
The number of complaints received by the REP from residential
customers for the following categories by month, by nine-digit zip code and
census tract:
(A)
Denial of service;
(B)
Quality of service;
(C)
Unauthorized billing (cramming);
(D)
Unauthorized change of a REP (slamming);
(E)
Accuracy of billing services; and
(F)
Collection and contract termination.
(d)
Additional information. Upon written request by the commission
or the Office of Public Utility Counsel (OPC), a REP or aggregator shall provide
within 15 days any information, including but not limited to marketing information,
necessary for the commission or OPC to investigate an alleged discriminatory
practice prohibited by §25.471(c) of this title (relating to General
Provisions of the Customer Protection Rules).
§25.492.Non-Compliance with Rules or Orders; Enforcement by the Commission.
(a)
Noncompliance. An aggregator or retail electric provider
(REP) that fails to comply with the Public Utility Regulatory Act (PURA) or
commission order may, after notice and opportunity for hearing, be subject
to any and all of the following available under the law, including, but not
limited to:
(1)
assessment of civil and administrative penalties under
PURA §15.023;
(2)
civil penalties under PURA §15.028;
(3)
suspension or revocation of the applicable certification
or registration or denial of a request for renewal or change in the terms
associated with a certification; and
(4)
such other relief directed to affected customers as allowed
by law.
(b)
Commission investigation. The commission may initiate a
compliance or other enforcement proceeding upon its own initiative, after
an incident has occurred, or a complaint has been filed, or a staff notice
of probable noncompliance has been served. The commission shall coordinate
this investigation with any investigation that may be or has been undertaken
by the Office of the Attorney General.
(c)
Suspension and revocation of certification. The commission
may initiate a proceeding to seek either suspension or revocation of a REP's
certification consistent with §25.107(j) of this title (relating to Certification
of Retail Electric Providers), or an aggregators registration consistent with §25.111(j)
of this title (relating to the Registration of Aggregators).
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 20, 2000.
TRD-200008856
Rhonda Dempsey
Rules Coordinator
Public Utility Commission of Texas
Effective date: January 15, 2001
Proposal publication date: September 1, 2000
For further information, please call: (512) 936-7308
Chapter 303.
GENERAL PROVISIONS
Subchapter A. ORGANIZATION OF THE COMMISSION
16 TAC §303.12
The Texas Racing Commission adopts new §303.12 without
changes to the proposed text as published in the October 27, 2000, issue of
the
Texas Register
(25 TexReg 10607). The
new section will not be republished.
Texas Government Code §2171.1045 requires state agencies to adopt
rules by which each agency vehicle is assigned to the agency pool and made
available to employees through a check-out procedure. The new rule will designate
agency motor vehicles as agency property and allows for availability to all
employees with valid Texas driver's license, provided there is compliance
with the sign-out procedure, Commission safety rules, and applicable traffic
laws.
No comment was received regarding this new rule.
The new rule is adopted under the Texas Civil Statutes, Article
179e, §2.20 which authorizes the executive secretary to provide information
relating to the standards of conduct for state officers or employees; §3.02
which authorizes the Commission make rules to administer the Act; and Texas
Government Code §2171.1045, which requires state agencies with motor
vehicles to adopt rules relating to the use of those vehicles.
The adopted new rule implements Texas Civil Statutes, Article 179e and
Texas Government Code §2171.1045.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 18, 2000.
TRD-200008799
Judith L. Kennison
General Counsel
Texas Racing Commission
Effective date: January 7, 2001
Proposal publication date: October 27, 2000
For further information, please call: (512) 833-6699
Subchapter C. HORSE RACETRACKS
4.
OPERATIONS
16 TAC §309.299
The Texas Racing Commission adopts an amendment to §309.299
without changes to the proposed text as published in the October 27, 2000,
issue of the
Texas Register
(25 TexReg 10608)
and the amendment will not be republished.
The amendment clarifies the responsibilities of the recognized horsemen's
representative and provides a mechanism by which the Commission may monitor
the financial condition of the organization. The amendment would require that
the recognized organization submit audited financial statements to the Commission,
annually. The amendment would authorize the Commission to require or conduct
an audit of the organization's records, and thereby would be consistent with
the requirements for racetracks and breed associations.
No comments were received regarding this amendment.
The amendment is adopted under the Texas Civil Statutes, Article
179e, §3.02, which authorizes the Commission to adopt rules for conducting
racing with wagering and for administering the Texas Racing Act; §3.13,
which authorizes the Commission to adopt criteria for recognizing an organization
to represent horse owners and trainers; §6.092, which authorizes the
Commission to adopt reporting and auditing requirements for any organization
that receives funds generated by live or simulcast pari-mutuel racing.
The adopted amendment implements Texas Civil Statutes, Article 179e.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 18, 2000.
TRD-200008800
Judith L. Kennison
General Counsel
Texas Racing Commission
Effective date: January 7, 2001
Proposal publication date: October 27, 2000
For further information, please call: (512) 833-6699
Subchapter C. RESPONSIBILITIES OF INDIVIDUALS
16 TAC §311.215
The Texas Racing Commission adopts an amendment to §311.215
without changes to the proposed text as published in the October 27, 2000,
issue of the
Texas Register
(25 TexReg 10608)
and the amendment will not be republished.
The amendments pertains to the possession of contraband on association
grounds. The amendment adds alcoholic beverages to the list of contraband.
No comments were received regarding this amendment.
The amendment is adopted under the Texas Civil Statutes, Article
179e, §3.02, which authorizes the regulation and supervision of all persons
and things related to greyhound and horse racing in this state; §3.16,
which authorizes the Commission to adopt rules prohibiting the illegal influencing
of the outcome of a race; and §6.06, which authorizes the Commission
to adopt rules on all matters relating to the operation of pari-mutuel racetracks.
The adopted amendment implements Texas Civil Statutes, Article 179e.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of
the Secretary of State on December 18, 2000.
TRD-200008801
Judith L. Kennison
General Counsel
Texas Racing Commission
Effective date: January 7, 2001
Proposal publication date: October 27, 2000
For further information, please call: (512) 833-6699
2.
ALCOHOL
Subchapter Q. SYSTEM BENEFIT FUND
Subchapter R. CUSTOMER PROTECTION RULES FOR RETAIL ELECTRIC SERVICE
Part 8.
TEXAS RACING COMMISSION
Chapter 309.
RACETRACK LICENSES AND OPERATIONS
Chapter 311.
OTHER LICENSES
Subchapter D. ALCOHOL AND DRUG TESTING