HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today issued for comment a policy statement on the pricing labels used when selling electric generation service to residential customers.
The Commission voted 5-0 to issue for comment tentative updates to its “electric competition dictionary,” which is available on www.PAPowerSwitch.com. The updates provide guidance to electric generation suppliers (EGSs) on the appropriate use of the “fixed-price” label and the use of pass-through clauses when presenting offers to potential customers and to provide for an additional labeling option.
The Commission proposed the changes after the filing of informal complaints by consumers as well as inquiries from EGSs and electric distribution companies about pricing practices. Some EGSs are offering fixed-rate products to residential customers but include language in the disclosure statement that allows the EGS to pass through the rate changes if an outside entity such as the Federal Energy Regulatory Commission or the PJM Interconnection imposes costs on the supplier.
The Commission’s main concern is that these types of offers may be misleading, especially when an EGS prominently advertises a fixed price and includes additional costs that are described in the pass-through clause far down in the fine print of the disclosure statement.
The relevant existing definitions are:
Fixed price: A fixed electricity rate will remain the same, for a set period of time.
Variable price: A variable electricity rate can change, by the hour, day, month, etc. according to the terms and conditions in the supplier’s disclosure statement.
The changes issued for comment in the Tentative Order include:
- Adding “of at least three billing cycles” to the definition of fixed price.
- Adding a definition for a “price with pass-through clause” and its use in the disclosure statement as well as direction for notifying customers of pricing changes.
- Additions to the definition of variable price.
Comments to the Tentative Order are due within 30 days of the entry of the Order. Further filing directions will be available in the Order.
The Pennsylvania Public Utility Commission balances the needs of consumers and utilities; ensures safe and reliable utility service at reasonable rates; protects the public interest; educates consumers to make independent and informed utility choices; furthers economic development; and fosters new technologies and competitive markets in an environmentally sound manner.
For recent news releases and video of select Commission proceedings or more information about the PUC, visit our website at www.puc.pa.gov. Follow the PUC on Twitter – @PA_PUC for all things utility. “Like” PAPowerSwitch on Facebook for easy access to information on electric shopping.
# # #
Docket No. M-2013-2362961