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July 25, 2014
Upcoming NEM Events

NEM Summer Leadership Roundtable - NEM’s Summer Policy Leadership Roundtable will be held at the University Club in Chicago, IL on August 5-7, 2014. Chairman Doug Scott of the ICC has confirmed his participation and has invited the other Commissioners, key staff, and the Governor’s office to attend. Registration is now available on the NEM website at this hotlink.

NEM Mid-Atlantic Energy Summit - Please also plan to attend the NEM Mid-Atlantic Energy Summit to be held at The Center Club in Baltimore, MD on October 21-23, 2014. Registration is now available on the NEM website at this hotlink. Hotel Rooms are available at the NEM Rate of $160 at the Embassy Suites Inner Harbor Hotel in Baltimore, MD.

Please contact headquarters if you are interested in sponsoring either of these events.

Click here to view all past updates.
Authority Opens Electric Consumer Protection Dockets

PURA has just assigned docket numbers to three new cases to implement PA 14-75, An Act Concerning Electric Customer Consumer Protection, that was passed earlier this summer. Docket 14-07-20 will be an Investigation into the Development of Electric Supplier Consumer Standards. Specifically, Docket 14-07-20 will examine, "standards relating to abusive switching practices, solicitations and renewals by electric suppliers, the hiring and training of sales representatives, door-to-door sales and telemarketing practices by electric suppliers. This docket will examine a disclosure statement for all electric suppliers to use on all promotional materials directed to residential customers that will direct consumers where they can find the highest and lowest electric generation service rate charged by such supplier as part of a variable rate offer in each of the preceding 12 months to any customer eligible for standard service."

Docket 14-07-19 will be an Investigation into the Redesign of Electric Supplier Bills. PA 14-75 tasked the Authority with redesigning, "(A) the standard billing format for residential customers to better enable them to compare pricing policies and charges among electric suppliers; and (B) the account summary page of a residential customer located on the electric distribution company's Internet web site." The first page of electric utility bills must now also include: (i) The electric generation service rate; (ii) the term and expiration date of such rate; (iii) any change to such rate effective for the next billing cycle; (iv) the cancellation fee, if applicable, provided there is such a change; (v) notification that such rate is variable, if applicable; (vi) the standard service rate; (vii) the term and expiration date of the standard service rate; (viii) the dollar amount that would have been billed for the electric generation services component had the customer been receiving standard service; and (ix) an electronic link or Internet web site address to the rate board Internet web site, and the toll-free telephone number and other information necessary to enable the customer to obtain standard service." This docket will also examine accelerated switching and different technology-enabled ways to provide customer bill notices.

The third proceeding to implement PA 14-75 is Docket 14-07-17, an Investigation into the Development of a Standard Electric Supplier Residential Contract. The Authority is required to adopt a standard summary form of materials terms and conditions for residential contracts. This form shall include: "(1) A description of the rate the customer will be paying; (2) whether such rate is a fixed or variable rate; (3) the term and expiration date of such rate; (4) whether the contract will automatically renew; (5) a notice describing the customer's right to cancel the service, as provided in this section; (6) information on air emissions and resource mix of generation facilities operated by and under long-term contract to the electric supplier; (7) the trade name of the electric supplier; (8) the toll-free telephone number for customer service of the electric supplier; (9) the Internet web site of the electric supplier; and (10) the toll-free telephone number for customer complaints of the Authority."

Click here to view all past updates.
Order on Bonding and Security Requirements for Electric Suppliers

The Commission issued an Order adopting revised electric generation supplier (EGS) bonding and security requirements. The Commission decided to maintain the current requirement for an initial security amount of $250,000 for the first year of an EGS’s operation for an EGS that intends to take title to electricity. However, the Commission was persuaded that subsequent year security requirements were excessive and were a barrier to competitive entry. Accordingly, the Commission decided that the bond or security for an EGS after the first year of operation should be in the amount of 5% of the EGS’s most recent 12 months of revenue or $250,000, whichever is higher. An EGS seeking a reduction/revision in bond/security, must formally file a petition to amend its Application with the Secretary’s Bureau, subject to a $350 filing fee.

The Commission additionally expanded the forms of acceptable security instruments that may be used by the EGS as follows:

"• Parental or corporate guarantee, in a form acceptable to the Commission, where the parent or corporate relation maintains an investment-grade long-term bond rating from at least two of the four following rating agencies:

Standard & Poors - BBB- or higher
Moody’s Investors’ Services - Baa3 or higher
Fitch IBCA - BBB- or higher
Duff and Phelps Credit Rating Company - BBB- or higher

• Segregated cash accounts, held by federally insured financial institutions, specific to Pennsylvania customers and callable only by the Commission.

• A mix of security instruments through the use of bonds, LOCs, parental/corporate guarantees, and/or segregated cash accounts as set forth above sufficient meet the required security amount."

The Commission additionally noted its plan to initiate a rulemaking on this topic within nine months.

The full text of the Order is available on the NEM Website.

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