Press Release

PUC Finalizes Updates to Electric Shopping Definitions

Published on 11/14/2013

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today finalized guidelines on the pricing labels used when selling electric generation service to residential customers.

The Commission voted 5-0 to approve the 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 when presenting offers to potential customers.

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 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 but includes possible 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.

Introductory Price: For new customers, a price kept comparatively lower for a period of time and then adjusted after a specified period of time, consistent with terms and conditions in the supplier's disclosure statement.

The newly revised definitions as approved in the Final Order include:

Fixed Price: An all-inclusive per kWh price that will remain the same for at least three billing cycles or the term of the contract, whichever is longer.

Variable Price: An all-inclusive per kWh price that can change, by the hour, day, month, etc. according to the terms and conditions in the supplier’s disclosure statement.

Introductory Price: For new customers, an all-inclusive per kWh price that will remain the same for a limited period of time between one and three billing cycles followed by a different fixed or variable per kWh price that will be in effect for the remaining billing cycles of the contract term, consistent with terms and conditions in the supplier’s “disclosure statement.”

On May 23, 2013, the Commission issued the Tentative Order for comments.

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.

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Docket No. M-2013-2362961

Contact:

• Denise McCracken
  Senior Communications Specialist
  717-787-5722
  demccracken@pa.gov