The Public Utility Commission Thursday 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.

11/18/2013