State regulators recommended some changes before considering public comments
By: Sam Kennedy |
The Pennsylvania Public Utility Commission moved so quickly to address skyrocketing variable electricity rates this month that acting state Consumer Advocate Tanya McCloskey was left wondering what the actions meant.
After receiving a barrage of complaints from angry ratepayers whose electricity bills unexpectedly shot through the roof over the winter, the commission voted unanimously in favor of proposals that would require electricity suppliers to switch customers to new companies more quickly and to provide them with easier-to-understand contracts.
The PUC’s April 3 vote came on the due date for public comments on the variable electricity-rate issue.
The five commissioners certainly hadn’t had enough time to digest all the comments, including the 55-page document the Office of Consumer Advocate and a coalition of consumer groups including AARP had jointly submitted.
A week later, McCloskey said she still wasn’t sure what the PUC planned to do with all the information it received the day of its vote — but that she hoped it would do something.
“We don’t think the commission’s proposals went far enough,” she said.
All told, the PUC received hundreds of pages of comments from two dozen parties, including PPL Electric Utilities of Allentown and Met-Ed.
PUC spokeswoman Jennifer Kocher said the commission wouldn’t have requested the input if it didn’t intend to make use of it.
“We’ll be taking further action,” she said.
On April 3, the PUC voted to reduce the wait time for customers to switch from one electricity supplier to another to three days. Currently, it can take up to 40 days — a delay that left many stuck with high variable rates over much of the winter.
The PUC also voted to tighten disclosure requirements for suppliers, requiring them, among other things, to highlight information about variable rates and to give customers advance notice when the terms of their contracts are about to change.
The new rules require final approval from other regulatory bodies and the state attorney general.
Among the additional measures recommended by McCloskey and the coalition of consumer groups are:
• A guarantee that accelerated switching times will not result in “unreasonable costs” that utilities pass on to ratepayers. (PPL has told the PUC that compliance would cost $1.5 million. Met-Ed estimated $1.5 million to $2 million in the short term and “significantly more” in the future.)
• A requirement that suppliers establish and provide to customers a “ceiling price” on variable rates.
• Standards for quality of service at supplier call centers, to ensure that customers who want to switch can reach representatives to process their requests.
McCloskey said she’d also like to see changes in the way uncollectable bills are handled. Currently, a supplier gets paid whether or not customers can afford to pay their bills. That’s because the local utilities, which are responsible for bill collection, must cover whatever the suppliers say they are owed.
In the end, local utilities fold the cost of uncollectable bills into their rates, spreading it throughout their customer base.
McCloskey believes this is unfair because it means suppliers that extract profits through variable rates are shielded from the consequences of doing so. They, and not ratepayers, should shoulder the burden of uncollectable bills, she said.
The Retail Energy Supply Association, which represents suppliers, also submitted comments to the PUC on April 3. Generally, the group called for a cautious approach to change.
On the question of advance notice of price changes, for example, RESA urged the PUC to consider “several issues that need to be balanced against the value of requiring the notices.”
One such issue, RESA said, is the financial impact: “If a lengthy notice period is required before the supplier can change a price, then the supplier is being delayed the ability to timely recoup those increased costs.
“The end result could be contract prices that are higher than would be otherwise necessary.”
