The Commission opened an investigation this week into whether CRES suppliers use of pass-through clauses in their fixed rate contracts and variable rate contacts that offer a guaranteed percent off of the SSO rate, specifically whether this practice is “unfair, misleading, deceptive, or unconscionable.”
The Commission has requested comment on the following questions:
“(a) Is it unfair, misleading, deceptive, or unconscionable to market or label a contract as fixed-rate when it contains a pass-through clause in its terms and conditions? If so, should the labeling of a contract containing a pass-through clause as a fixed-rate contract be prohibited in all CRES contracts; residential and small commercial contracts; or only residential contracts?
(b) May a CRES supplier include a pass-through clause in a fixed-rate contract that serves to collect a regional transmission organization (RTO) charge? Is such a practice unfair, misleading, deceptive, or unconscionable?
(c) May increased costs imposed by an RTO and billed to CRES suppliers be categorized as a pass-through event that may be billed to customers in addition to the basic service price pursuant to fixed-price CRES contracts? Is such a practice unfair, misleading, deceptive, or unconscionable?
(d) If increased costs imposed by an RTO and billed to CRES suppliers may be categorized as a pass-through event that may be billed to customers with fixed-price CRES contracts, what types of pass-through events should invoke the application of the pass-through clause by a CRES supplier?
(e) Is it unfair, misleading, deceptive, or unconscionable when a CRES provider prominently advertises a fixed price, but the contract also contains a pass-through clause that is significantly less prominent (i.e., is displayed far down in the fine print or on a
second page of the terms and conditions)?
(f) Should a pass-through clause that refers to acronyms such as "RTO," "NERC," or "PJM" be required to define these acronyms? If so, should definitions be required in residential and small commercial contracts, or only residential contracts?
(g) Could permitting pass-through clauses in residential and/or small commercial CRES contracts labeled as fixed-rate contracts have an adverse effect on the CRES market?
(h) What alternative label should be used on a contract with a pass-through clause that has an otherwise fixed rate?”
Comments are due May 9, 2014. The full text of the Request for Comments is available on the NEM Website.