After about 18 months of weekly working group meetings and 5 days of rulemaking hearings, the Maryland Commission has approved for publication new rules governing supplier consolidated billing (SCB).
In May 2019, the Commission entered an Order granting a petition filed by six retail energy suppliers to implement SCB, and then convened a working group to draft regulations consistent with the Order. There were numerous non-consensus items on which the Commission has ruled, and the rules will now travel from Baltimore to Annapolis for publication in the Maryland Register.
We have previously blogged about Maryland’s progress with SCB – most recently, here. Under SCB, a supplier purchases the customer’s regulated receivable from the utility. The supplier then sends the customer a bill that includes the customer’s utility and supplier charges. Although other jurisdictions such as Texas (electricity), Georgia (natural gas) and Alberta (electricity and natural gas) have implemented SCB, Maryland’s program is unique in that suppliers are not allowed to terminate a customer for non-payment, but can drop the non-paying customer to utility service and seek repayment of the unpaid regulated charges from the utility. The new rules address the supplier’s purchase of the utility’s receivable, drops for non-payment, repurchase by the utility of unpaid charges, and other mechanics of the program.
Two of the biggest issues in the rulemaking involved the payment posting system for partial payments and how to treat bundled charges. With respect to the payment posting system, the Commission adopted a pro rata structure with three tiers. First, the payment will be applied pro rata to pay utility and supplier arrears; second, remaining funds will be applied pro rata to pay current utility and supplier charges; third, remaining funds will be applied to value-added (i.e., non-commodity) charges. If the supplier is offering a bundled or packaged product, the published rules require suppliers, for payment posting purposes, to unbundle value-added or “non-commodity” charges from the commodity charge to ensure they are paid last.
The rules include new consumer protection provisions, including rules for suppliers that want to transition a customer from one billing method to another. For example, a supplier that wants to change a customer’s billing method from utility consolidated billing to SCB pursuant to an existing contract must notify the customer twice of the upcoming change and afford the customer the opportunity to say no, revert to utility service, or switch to another supplier without incurring an early termination fee. A customer that remains with the supplier will have two billing cycles to switch or drop and avoid the ETF, if applicable under the existing contract. If, however, the contract is silent on changing a billing method, the supplier must obtain the customer’s affirmative consent to change the bill method.
After the rules are published in the Maryland Register, there will be comment period followed by another hearing at the Commission. At that hearing, the Commission will vote on whether to approve the rules for final publication. They would then be published as final regulations in the Maryland Register and become permanent 10 day later.
The EDI and XML working groups will now kick into gear and determine how to program and implement the new rules. The implementation timeline, which in 2019 had set Day One for September 2022, will likely occur at some point in the latter half of 2023.