Energy
3:30 am
Mon April 7, 2014

PA Public Utility Commission Adopts Requirements For Clearer Disclosures From Suppliers

This winter was a harsh one, with days of bitter cold temperatures that caused many households to turn up the thermostat.

Because of the high demand, many consumers who’d signed up for variable rate pricing plans had a nasty shock when their bills increased dramatically. Now the Public Utility Commission is stepping in to try and ensure customers understand what they are signing up for.

“People just simply weren’t aware what was in the contract, I mean the information has always been there, but it wasn’t conspicuous enough for them or they didn’t understand fully the terms and conditions, especially as it relates to variable rates,” said PUC spokesman Dave Hixson.

When there is a winter with high demand, wholesale energy rates go up, that cost is passed on to the consumer. But variable rate customers weren’t the only ones hit with surprises.

“On the other end, there were fixed rate customers who did not realize that their contract had expired and they were shifted into a month-to-month variable product,” Hixson said. “They were hit hard by the past winter and the Polar Vortex and the prices that went up, especially for variable rate customers.”

In February and March, more than 9,137 consumers contacted the PUC with concerns about electric supply prices.

Hixson said new disclosure requirements aim to make it easier for consumers.

“The new regulations will provide a disclosure statement with more detail, more conspicuous information, easily discerned by the shopper, and it will be in a uniform manner among all the electric generation suppliers making offers to Pennsylvania consumers,” he said.

Key terms will be included in a summary up front, so that people will understand whether they’re paying a fixed or variable rate, what that means, whether or not they have cancelation fees and other information.   

According to the PUC, 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.

The regulations still have to 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.

Hixson said the hope is to have them implemented before next winter.