PUC Adopts New Electric Supplier Disclosure Statements For Variable Rate Offers

The Public Utility Commission Thursday finalized regulation changes that provide electric shopping customers with greater, uniform detail in electric supplier disclosure statements and more timely information on “contract renewal” and “change in terms” notices (Docket No. L-2014-2409385).

The Commission voted 5-0 to approve regulations that require EGSs to display key contractual terms and conditions more prominently, especially for customers on variable-priced products; provide historical pricing data on their products; and mark prominently customer notices prior to contract expiration or changes in terms.

The changes are designed to provide additional information and greater protections for residential and small business customers choosing a competitive supplier for their electric generation.

“Today’s action was about how do we be more transparent? How do we require suppliers to be more practical on educating their customers on potential price fluctuations?” said PUC Chairman Robert F. Powelson in a video news release. “More importantly, it’s called truth in advertising – making sure that the disclaimers are approved and affirmatively signed off by the customer, that they knowingly understand those terms, and we think today’s actions really set the stage for greater notification to customers. In the age of transparency, we think that’s a good thing.”

The regulations must be approved by the Independent Regulatory Review Commission, Attorney General’s Office, Senate Consumer Protection and Professional Licensure Committee and House Consumer Affairs Committee before going into effect.

The Commission launched the expedited rulemaking proceeding on March 18, 2014, by asking for comments on the changes.  

In February and March 2014, more than 9,137 consumers have contacted the Commission with concerns about electric supply prices, many of whom expressed frustration with the time it take to change suppliers. Of those, more than 5,732 consumers have filed informal complaints with the PUC’s Bureau of Consumer Services.

The new regulations include:

— More contractual information on conditions of price variability, including whether there are limits on variability;

— A clear statement of the price per kilowatt hour for the first billing cycle of electric generation;

— Customer access to historical pricing information;

— Separate mailings for either fixed-term contracts that are expiring, or any changes to terms of service;

— A separate EGS contract summary along with the full disclosure statement to ensure EGSs highlight key terms and conditions in a uniform, consistent manner;

— New requirements for contract “Initial Notices” and customer “Options Notice” prior to the expiration of a contract or change in terms;

— A renewed emphasis on highlighting changes in pricing or any terms and conditions - including a fixed rate becoming a month-to-month fixed rate that includes a 30-day notice of any price change; and

— Prominent marking on front of the “Options Notice” envelope clearly stating that it contains important information regarding the expiration or changes in terms of a customer’s electric supply contract.

On Monday Rep. Peter J. Daley II (D-Washington), Minority Chair of the House Consumer Affairs Committee, thanked key gas utilities in Pennsylvania for delaying service shutoffs by two weeks due to significant increases in electric and gas prices over the winter.

The Senate Consumer Protection and Professional Licensure Committee held a hearing Tuesday on electricity rate spikes this winter and the variable rate pricing issues.

The House Consumer Affairs Committee has scheduled a second hearing on the variable electric rate issue for April 10.   The hearing will be held in the Gold Room, Allegheny County Courthouse, 436 Grant St., in Pittsburgh starting at 10:00.

The PUC also finalized regulations Thursday accelerating switching times for electricity suppliers.

Click Here to search for copies of documents available for Docket No. L-2014-2409385.

For more information on shopping for electricity suppliers, visit the PUC’s PA Power Switch website.

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