PUC Adopts Final-Omitted Regulations Addressing Variable Price Contracts


On April 3, 2014, the Pennsylvania Public Utility Commission (“PUC”) adopted a final rulemaking order to revise its customer information regulations in 52 Pa. Code §54.5.  These regulations would set forth additional requirements for electric generation suppliers (“EGSs”) in issuing disclosure statements to residential and small business customers.

The regulations would require EGSs offering variable pricing contracts to include specific information in the disclosure statement about any limits on price variability (such as price caps or maximum percentage increases) and provide sources for historical pricing data over the past 24 months. EGSs whose variable prices have no limits would be required to clearly and conspicuously state that there is no limit to which prices might increase.

The final regulations would also require EGSs to provide an EGS Contract Summary in a template provided by the PUC.  This Summary would be required to contain a one-page overview, in plain terms, of the most important contract terms.

As to what EGSs must do when a fixed term contract is approaching its expiration date, the PUC basically retained the current requirements for EGSs to provide an Initial Notice 45 to 60 days prior to the expiration of the contract to alert customers to changes that are coming and an Options Notice 30 days in advance to give customers more details and let them know what their options are and how to exercise them.  The final regulations would, however, enhance the content of these notices, and allow for the Initial Notice to be sent electronically.

In adopting this order, the PUC used a “final-omitted” approach that is permitted under Pennsylvania’s regulatory review process when there is good cause to omit the proposed rulemaking stage that solicits public comment.  The final-omitted regulations now must be transmitted through the Regulatory Review process pursuant to the Regulatory Review Act to the Office of Attorney General, the House Consumer Affairs Committee, the Senate Consumer Protection and Professional Licensure Committee and the Independent Regulatory Review Commission for consideration.  If approved, the regulations will become final upon publication in the Pennsylvania Bulletin and become effective 30 days thereafter.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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