ENMAX Energy Corporation

Transcription

1 Decision D Regulated Rate Option Tariff Terms and Conditions Amendment Application April 12, 2017

2 Alberta Utilities Commission Decision D Regulated Rate Option Tariff Terms and Conditions Amendment Application Proceeding April 12, 2017 Published by the: Alberta Utilities Commission Fifth Avenue Place, Fourth Floor, 425 First Street S.W. Calgary, Alberta T2P 3L8 Telephone: Fax: Website:

3 Contents 1 Introduction and background Proposed amendments to the T&Cs Section 2.1: definition of credit agency Section 3.4: rental premises UCA recommendation sign-up process UCA recommendation codification UCA recommendation owner grace period UCA recommendation revising the wording of Section 3.4(b) for clarity Costs associated with identifying, searching for and contacting the owner Section 7.6: remedies for non-payment Section 8.5: notice of disconnection Section 8.7: service guarantee Section 10.4: notice to customers Communication by , text message and telephone Use of facsimile Communication from customers Section 10.5: personal information Other proposed amendments Notice to close an account Definition of force majeure Service guarantee Effective date of owner responsibility Housekeeping amendments Compliance filing Order Appendix 1 Proceeding participants Appendix 2 Summary of Commission directions Decision D (April 12, 2017) i

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5 Alberta Utilities Commission Calgary, Alberta Regulated Rate Option Tariff Terms and Conditions Decision D Amendment Application Proceeding Introduction and background 1. On October 7, 2016, (EEC) filed an application with the Alberta Utilities Commission requesting approval to amend the regulated rate option (RRO) tariff terms and conditions of service (T&Cs), effective January 1, EEC stated that in order to strengthen its ability to manage bad debt expense, it is proposing amendments to the T&Cs, including: defining the term Credit Agency allowing EEC to hold the owner of premises responsible for payments where a tenant fails to meet any of the requirements set out in the T&Cs permitting EEC to make a report to a credit agency when a customer fails to pay billed amounts on time clarifying that notice of disconnection may only be given by mail, hand delivery or facsimile permitting EEC to provide notices to customers by and text message allowing EEC to collect, use and disclose personal information to collection agencies and credit agencies 2. The Commission issued notice of application on October 11, 2016, requiring interested parties to register their concerns with, or support for, the application. The Commission received statements of intent to participate from the Office of the Utilities Consumer Advocate (UCA) and the Consumers Coalition of Alberta (CCA) in which both parties requested the opportunity to test the application through written information requests (IRs). 3. In a letter dated October 27, 2016, the Commission determined that the application would be considered by way of a basic written process proceeding as outlined in Bulleting The Commission established the following process schedule: Process step IRs to EEC IR responses from EEC Parties submission on need for further process Deadline November 10, 2016, at 4 p.m. November 24, 2016, at 4 p.m. November 29, 2016, at 4 p.m. 1 Bulletin , Performance standards for processing rate-related applications, March 26, Decision D (April 12, 2017) 1

6 4. On November 21, 2016, EEC filed a letter with the Commission requesting an extension to provide information responses due to the volume of requests received. In a letter dated November 23, 2016, the Commission granted EEC s request for an extension. The Commission directed EEC to file information responses no later than 4 p.m. on December 8, 2016, and extended the deadline for parties to provide submissions on the need for further process to 4 p.m. on December 13, On December 13, 2016, the Commission received a submission from the UCA indicating that the UCA was prepared to address the proceeding through written argument and reply argument. In its letter dated December 15, 2016, the Commission determined that the application would now be considered by way of a minimal written process. Parties were instructed to submit written argument and reply argument by January 9, 2017, and January 20, 2017, respectively. 6. The Commission considers the record for this proceeding to be closed as of January 20, In reaching the determinations set out within this decision, the Commission has considered all relevant materials comprising the record of this proceeding. Accordingly, references in the decision to specific parts of the record are intended to assist the reader in understanding the Commission s reasoning relating to a particular matter and should not be taken as an indication that the Commission did not consider all relevant portions of the record with respect to that matter. 2 Proposed amendments to the T&Cs 2.1 Section 2.1: definition of credit agency 8. EEC proposed to amend Section 2.1 of the T&Cs, entitled Definitions, to include Credit Agency as a defined term. EEC s proposed definition for a Credit Agency is as follows: Credit Agency means an entity that collects credit information and provides credit reports and other information regarding a person s creditworthiness and payment history, and includes a reporting agency as defined in the Fair Trading Act and a credit reporting organization as defined in the Personal Information Protection Act EEC indicated that the purpose of this revision is to support its proposed amendment to Section 7.6 of its T&Cs. EEC submitted that the proposed amendment to Section 7.6 of its T&Cs will allow EEC to make reports to credit agencies as a remedy for non-payment. 3 The defined term is also included in sections 8.7 and Consequently, the term Credit Agency needs to be defined as part of the T&Cs. 10. During the IR process, EEC provided references to the Fair Trading Act and the Personal Information Protection Act that are cited as part of its proposed definition for Credit Agency. 4 Neither the UCA nor the CCA raised concerns with EEC defining and including the term Credit Agency Exhibit X0027, EEC argument, paragraph 5. Exhibit X0027, EEC argument, paragraph 6. Exhibit X0022, response to EEC-AUC-2016NOV10-005, PDF page 7. 2 Decision D (April 12, 2017)

7 11. As subsequently discussed in Section 2.3 of this decision, EEC requested permission to amend Section 7.6 of its T&Cs. The proposed amendment to Section 7.6 is intended to permit EEC to make a report to a credit agency when a customer fails to pay billed amounts in full and on time. As set out in Section 2.3 of this decision, the Commission has approved EEC s request to amend Section 7.6 of its T&Cs. Accordingly, the Commission agrees with EEC that it is necessary to include a definition of Credit Agency in the T&Cs. The Commission finds that EEC s proposed amendment to Section 2.1 of its T&Cs to include a definition of the term Credit Agency is reasonable. This also assists in clarifying the existing use of the term in sections 8.7 and 10.5 of the T&Cs. The Commission therefore approves the proposed amendment to Section 2.1 of EEC s T&Cs to include the definition of Credit Agency, and the Commission approves the wording of the definition as proposed. 2.2 Section 3.4: rental premises 12. EEC proposed to amend Section 3.4 of its T&Cs, entitled Rental Premises, to add subsections (b) and (c) as follows: 3.4 RENTAL PREMISES (b) If a Tenant fails to meet any of the requirements set out in Section 4.1 of these RRT [regulated rate tariff] Terms and Conditions (a Tenant Default ), and in addition to any remedies that ENMAX Energy has under Section 7.6, the Tenant shall cease to be the Customer for the Premise and the Owner of the Premise shall be liable for payment for Regulated Rate Service provided in accordance with the Regulated Rate Tariff and these Terms and Conditions, starting immediately upon ENMAX Energy providing written notice to the Owner of a Tenant Default, which notice may be provided by facsimile, mail or hand delivery. The Owner will not be responsible for paying any Charges incurred by a Tenant while such Tenant was the Customer for the Premise, unless the Owner agrees or instructs ENMAX Energy otherwise. (c) In the event of a Tenant Default, the Owner of a Premise will be liable for all charges related to identifying, searching for and contacting the Owner EEC indicated that currently it is not able to seek payments from the owner of a rental property that is experiencing recurring bad debt expenses. The additions of subsections (b) and (c) will allow EEC to more effectively manage bad debt expense, to the benefit of RRO ratepayers, by permitting EEC to revert to the owner being the customer of record in the event of a Tenant Default. 6 EEC provided more information about this proposed amendment during the IR process In argument, the UCA opposed EEC s proposed amendment stating the UCA does not believe that EEC should be foisting its bill collection responsibilities onto the Owners, in Exhibit X0027, EEC Argument, paragraph 7. Exhibit X0007, Appendix 1 EEC RRO TC proposed amendments schedule. Exhibit X0022, response to EEC-AUC-2016NOV10-001, PDF page 1. Exhibit X0024, response to EEC-UCA-2016NOV10-001, PDF page 1. Exhibit X0024, response to EEC-UCA-2016NOV10-002, PDF page 6. Decision D (April 12, 2017) 3

8 situations where the premises is not vacant. 8 While supportive of fair methods to reduce bad debt, the UCA argued that EEC s proposed amendment unfairly shifts the burden of a nonpaying tenant to the owner of the premises and that the tenant should be liable for charges incurred when the tenant still occupies the premises and receives the benefit of RRO service. Further, the UCA stated that EEC should address any tenant non-payment issues through its normal bill collection process, including through a disconnection of RRO service, where appropriate The UCA submitted a number of recommendations regarding EEC s proposed amendments to Section 3.4 of the T&Cs, in the event that the Commission were to approve EEC s proposed amendments to this section. These recommendations of the UCA are discussed below in sections through In response to the UCA, EEC submitted that the proposed revision was a reasonable means of mitigating bad debt risk for EEC and all RRO customers. EEC indicated that in Decision , 10 the Commission pointed out that EPCOR Energy Alberta GP Inc. s (EEA) approved T&Cs identify site owners to be the customer of record, any third-party relationships are with tenants and that the tenant is able to eliminate the site owner as the customer of record. EEC indicated that this principle applies equally to EEC and EEC simply seeks to expand the circumstances in which the owner reverts to being the customer of record In the event that a customer does not enroll with a competitive retailer, the default is that service will be taken from the regulated rate provider. This is deemed in Section 103(9) of the Electric Utilities Act, which provides: If an eligible customer who is in the service area of the owner s electric distribution system is not enrolled with a retailer, the owner is the customer s regulated rate provider and the customer is deemed to have elected to purchase electricity services under that owner s regulated rate tariff. The Regulated Rate Option Regulation requires an owner of an electric distribution system to make available the option of being supplied electricity services in accordance with a regulated rate tariff instead of purchasing electricity from a (competitive) retailer. The RRT must include, amongst other things, the terms and conditions under which the owner proposes to offer electricity services (Regulated Rate Option Regulation, Section 3(1)(a)(iv)). Approval of the RRT (including the terms and conditions) must be applied for to the Commission (Electric Utilities Act, Section 103(2)). 18. The Commission considered a complaint by a landlord with respect to the operation of EPCOR Energy Alberta Inc. s RRO terms and conditions in Proceeding 968. While the complaint in that case arose out of EEA s billing of vacant rental premises, the Commission considers that some of the Commission s reasoning in that case applies equally with respect to EEC s proposed revisions to its T&Cs to address tenant defaults: 87. The Terms and Conditions between the distribution utility and customers are not contracts in the ordinary, common law, sense. They cannot even be characterized as contracts. They are legally imposed regulations that bind the utility to provide a service at Exhibit X0028, UCA argument, paragraph 8. Exhibit X0032, UCA reply argument, paragraphs 7-8. Decision : Edson Manor Properties Ltd., Electricity Billing Dispute with EPCOR Energy Alberta Inc., Proceeding 968, Application , September 22, Exhibit X0031, EEC reply argument, paragraphs Decision D (April 12, 2017)

9 just and reasonable rates to all who require and demand them. Public utility regulation is a matter of public law. Rate regulation of public utilities in Alberta is a creature of statute and in Alberta, the Commission and its predecessors have had jurisdiction over public utilities and the manner in which rates are set including the Terms and Conditions as denoted above. The Electric Utilities Act and its regulations are a comprehensive statutory scheme. The provisions form a coherent and workable scheme to, among other things, govern all aspects of the provisions of service, billing practices of a regulated rate provider and payment for services rendered. 88. EPCOR as a regulated rate provider has a duty to provide electrical service under Section 103(9) of the Electric Utilities Act and Section 2 of the Regulated Rate Option Regulation to eligible customers. In return, EPCOR may recover its prudent costs from eligible customers, in accordance with a regulated rate tariff which is approved by the Commission. 99. The Commission has found as a matter of fact that the Terms and Conditions have always been and\ will always be between the distribution utility or regulated rate provider and the landlord. Tenants simply assume the obligation from the landlord when they reside in the building, and once they vacate the obligation of the landlord revives. In other words, privity is never an issue. Never mind that the law of public utilities has always held that utilities provide their services as a matter of legal obligation and not contract As stated above, EPCOR may recover its prudent costs for providing electricity service. If the vacant site charges were not imposed on the landlord, all regulated rate customers of EPCOR would incur these costs. The Commission took note of EPCOR s testimony that unbillable charges have been lowered since the implementation of Section 8.12 of the Terms and Conditions. In light of the number of rental premises in the EPCOR service area and landlord agreements in place, vacant site charges may be sizeable if the landlord were not responsible for these charges. The Commission finds that as Edson Manor receives the benefit of having electrical facilities available to its suites, it is just and fair and not unduly discriminatory that Edson Manor be responsible for the payment of these charges 12 [footnotes deleted] 19. As indicated by EEC, an owner of a building to which a meter is attached and to which electricity is provided must have electric service available to its rental properties in order to rent them. An owner also has control over the property and has a direct contractual relationship with its tenants. As such, the owner generally has recourse to collect payment from a tenant for actions of the tenant that cause the owner of the property to incur costs, including the costs associated with utility bills. This is usually facilitated by way of a damage deposit or other legal recourse. 20. As indicated by EEC, one of the intentions of the proposed amendment to Section 3.4 of the T&Cs is to limit the exposure of EEC and its RRO ratepayers to bad debt expense resulting from non-paying Tenants. 13 The Commission is supportive of methods to reduce bad Decision Exhibit X0027, EEC argument, paragraph 9. Decision D (April 12, 2017) 5

10 debt expense, to the benefit of all ratepayers, and notes that no party in this proceeding has provided evidence that EEC s proposal would not reduce bad debt expenses. 21. In assessing the UCA s submission that the proposed amendment unfairly shifts the burden of a non-paying tenant to the owner of the premises, the Commission considered that owners generally have the ability to control or mitigate their liability for these future nonpayment in the event of a tenant default. RRO ratepayers do not have any recourse to limit their exposure to bad debt expense resulting from tenant non-payments. Accordingly, the Commission does not agree with the UCA s assertion that the expansion of Section 3.4(b) unfairly shifts the burden of non-paying tenants to the owner of the premises. 22. In light of the above, the Commission finds it reasonable for EEC to have the ability to make owners the customer of record in the event of a tenant default. The Commission considers that the proposed revision is a reasonable means of mitigating bad debt risk for EEC and all RRO customers. However, the Commission is not prepared at this stage to approve the proposed amendments to sections 3.4(b) and (c) in their entirety as proposed by EEC. As previously mentioned, the UCA submitted a number of recommendations regarding EEC s proposed amendments to Section 3.4 of the T&Cs, in event the Commission were to approve EEC s proposed amendments to this section. The Commission considers the UCA s recommended revisions to Section 3.4 below UCA recommendation sign-up process 23. The UCA submitted that it is important for an owner to have knowledge of any potential liability under Section 3.4(b) of the T&Cs and be given the opportunity to structure any lease or rental agreement with the tenant accordingly. 14 As EEC does not require a prospective customer to indicate whether they are a tenant or an owner, the UCA argued that it is unlikely that owners are specifically informed of the need to abide by the T&Cs when the relationship is between a tenant and EEC The UCA recommended that EEC require a prospective customer to identify whether they are an owner or tenant of the premises as part of the RRO service sign-up process. If the prospective customer identifies themselves as a tenant, the tenant must provide contact information for the property owner, after which, EEC should be required to contact the owner and advise them of the potential liability under Section 3.4(b) of the T&Cs. 16 The UCA indicated that the collection and retention of the status of the premises as a rental property and owner contact information would have additional benefits, including streamlining the enrollment and de-enrollment process and fostering general efficiencies in the process to the benefit of all market participants EEC indicated that the UCA s recommendation would be cumbersome and administratively burdensome. 18 Because the RRO is a form of default service, persons may become RRO customers without taking any actions and without having any direct contact with Exhibit X0028, UCA argument, paragraph 9. Exhibit X0028, UCA argument, paragraph 12. Exhibit X0028, UCA argument, paragraph 14. Exhibit X0032, UCA reply argument, paragraph 14. Exhibit X0031, EEC reply argument, paragraph Decision D (April 12, 2017)

11 the RRO provider prior to enrollment. Additionally, tenants may not know who the owner of a property is or ownership of the property could change. 19 For these reasons EEC submitted: The UCA s suggestion would effectively require EEC to carry out a land title search for every Premise and the name of the owner shown on the title compared to the Customer of record to determine whether the Customer of record is the Owner or a Tenant, or to contact each Customer to request this information. Under the latter approach, it is reasonable to expect that not all Customers will respond, in which case a title search would still be required EEC highlighted that Section 3.4(b) of the T&Cs will affect a small number of customers. EEC provided evidence that in 2016, 3,400 premises were identified as having recurring bad debts over the past 24 calendar months and that tenant defaults would be a subset of this number. EEC indicated that it would be prepared to send notices to owners of sites associated with recurring bad debts warning them that they may become subject to Section 3.4(b) of the T&Cs; however, this would require a land title search for each of these sites. EEC indicated that it would expect to recover the cost of such searches, but indicated that recovering the cost from an owner who is not the customer could be problematic. EEC submitted that the cost of these proactive title searches could be included as part of bad debt expense In the Commission s view, owners may benefit from advance notice of their potential liability under Section 3.4(b) of EEC s T&Cs. However, the Commission does not support the UCA s proposal to require EEC to contact an owner to inform them of their potential liability as part of the sign-up process for a tenant. 28. EEC identified a number of scenarios in which complying with the UCA s proposal to inform owners of their potential liability would require EEC to carry out land title searches. As indicated by EEC, there may also be problems with recovering costs of proactive title searches through owners who are not a customer of EEC, which could require the costs being borne by all RRO ratepayers through bad debt expense. Accordingly, while the advance notice of potential liability may benefit owners, it would appear to do so, at least in certain circumstances, at the expense of all ratepayers. The Commission notes that owners are also not provided proactive notice of their liability under Section 3.4(a) of the T&Cs in the event a tenant vacates a property. For these reasons, and in consideration of EEC s position that the UCA s proposal would be cumbersome and administratively burdensome, the Commission concludes that while owners may benefit from advance notice of their potential liability, the UCA s proposal is not practical. Consequently, the UCA s recommendation is rejected UCA recommendation codification 29. The UCA indicated that although the proposed Section 3.4(b) uses language which makes its application mandatory, the responses of EEC to certain IRs suggest that EEC will exercise discretion in determining whether to engage Section 3.4(b) upon a tenant default Exhibit X0031, EEC reply argument, paragraphs Exhibit X0031, EEC reply argument, paragraph 21. Exhibit X0031, EEC reply argument, paragraphs Exhibit X0028, UCA argument, paragraph 20. Decision D (April 12, 2017) 7

12 30. The UCA raised concerns regarding EEC s discretion in engaging Section 3.4(b) of the T&Cs. The UCA argued that allowing the application of Section 3.4(b) to remain at the sole discretion of EEC results in the risk that the section may not be fairly and consistently applied. Accordingly, the UCA indicated that it is important that the circumstances in which Section 3.4(b) will be applied be clearly codified in the T&Cs The UCA also raised a concern with the potential that Section 3.4(b) be invoked as a result of an inadvertent failure to comply with Section 4.1 of the T&Cs, titled Requirements For Obtaining Regulated Rate Service. 24 The UCA submitted that Section 3.4(b) should be revised such that the application depends on inaction of the tenant, as opposed to the exercise of unfettered discretion by EEC. Specifically, the UCA recommended that Section 3.4(b) be amended such that EEC is required to give notice to the tenant of the specific circumstances which constitute a tenant default, prior to Section 3.4(b) being engaged. The tenant will then have a grace period of five business days to remedy the tenant default. If the tenant fails to rectify the tenant default, Section 3.4(b) will be engaged and EEC should provide written notice to the owner In its reply argument, EEC acknowledged that Section 3.4(b) did not accurately reflect EEC s intention and suggested that the following language for Section 3.4(b) be approved: If a Tenant fails to meet any of the requirements set out in Section 4.1 of these RRT Terms and Conditions (a Tenant Default ), and in addition to any remedies that ENMAX Energy has under Section 7.6, EEC has the right to designate the Owner the Tenant shall cease to be the Customer for the Premise and the Owner of the Premise shall be liable for payment for Regulated Rate Service provided in accordance with the Regulated Rate Tariff and these Terms and Conditions, starting immediately upon ENMAX Energy providing written notice to the Owner of a Tenant Default, which notice may be provided by facsimile, mail or hand delivery. The Owner will not be responsible for paying any Charges incurred by a Tenant while such Tenant was the Customer for the Premise, unless the Owner agrees or instructs ENMAX Energy otherwise EEC opposed the UCA s recommendation to codify the circumstances in which Section 3.4(b) could be applied, stating that under the existing T&Cs, EEC may exercise a number of remedies at its discretion and that leaving such matters to the discretion of EEC is reasonable and permits EEC to evaluate issues on a case-by-case basis. 27 Further, EEC argued that codifying the circumstances in which EEC must apply the remedies will likely lead to more unfairness by eliminating its flexibility and such codification would effectively provide a roadmap to the minority of customers who deliberately don t pay their bills and seek to avoid their obligations EEC also opposed the UCA s recommendation for a five-day grace period for tenants to remedy a tenant default. EEC indicated that it already has the power to give notices and set out payment arrangements without the requirement to do so in every case. Further, in some cases, Exhibit X0028, UCA argument, paragraph 23. Exhibit X0028, UCA argument, paragraphs Exhibit X0032, UCA reply argument, paragraph 21. Exhibit X0031, EEC reply argument, paragraph 28. Exhibit X0031, EEC reply argument, paragraph 23. Exhibit X0031, EEC reply argument, paragraph Decision D (April 12, 2017)

13 a requirement to provide written notice of each default would be ineffective and delay EEC s ability to take meaningful action to mitigate the risk of additional bad debt In the Commission s view, EEC s request to maintain discretion regarding the circumstances it can engage Section 3.4(b) of the T&Cs is reasonable as it is consistent with the other remedies available to EEC in the T&Cs. In the Commission s view, it is difficult to adequately codify every circumstance in which Section 3.4(b) may be engaged and, accordingly, it is preferable to allow EEC to apply discretion to deal with matters on a case-by-case basis. Accordingly, the Commission finds that EEC s revision to the wording of the proposed Section 3.4(b) to reflect the discretionary nature of the section is reasonable. 36. The Commission notes that although EEC maintains some discretion with respect to when to engage Section 3.4(b), EEC only has the power to engage the section in the event a tenant fails to meet any of the requirements set out in Section 4.1 of the T&Cs. EEC must exercise its discretion reasonably and in good faith. Failure to do so could result in, amongst other things, a complaint being heard by the Commission. 37. The Commission agrees with EEC that the most likely action that would trigger a tenant default under Section 4.1, and thus make Section 3.4(b) applicable, would be non-payment of bills. In that case, the Commission expects that EEC would take action to remedy the nonpayment, as set out in Section 7.6 of its T&Cs, in advance of engaging Section 3.4(b). If EEC takes action as set out in Section 7.6 of its T&Cs, a tenant would generally be made aware that they are in violation of the T&Cs. The Commission also agrees with EEC that in cases where tenants have a history of non-payment, a notification of tenant default provided in accordance with Section 3.4(b) would often be ineffective in resolving the non-payment, and would consequently increase the amount of bad debt expense because of the delay created by issuing the notification of tenant default. 38. Under the proposed amendments, tenant default can be triggered under Section 4.1 of the T&Cs for reasons other than non-payment of bills, and EEC would not be required to advise a tenant that they have violated the T&Cs for these other reasons. The Commission is not satisfied that a tenant in default under these circumstances would otherwise be provided with notice of the default by operation of the T&Cs (as described above in relation to non-payment of bills). Consequently, the Commission considers that a tenant may not be aware that they have violated the T&Cs for these other reasons. In the interest of transparency and fairness, the Commission considers that EEC should be required to issue notice of a tenant default to a tenant, if the reason for the tenant default is for something other than non-payment of bills. 39. The Commission finds it reasonable that Section 3.4(b) be amended such that EEC is required to give notice to the tenant of the specific circumstances, other than non-payment of bills, which have resulted in the tenant default, prior to Section 3.4(b) being engaged. Section 3.4(b) should also be amended to grant the tenant a grace period of five business days to remedy the tenant default, subsequent to which, if the tenant default is not remedied by the tenant, Section 3.4(b) will be engaged. EEC may issue notice to the tenant through any of the means approved in Section 10.4 of the T&Cs. The Commission directs EEC to amend Section 3.4 of the T&Cs to reflect the above finding. 29 Exhibit X0031, EEC reply argument, paragraph 25. Decision D (April 12, 2017) 9

14 40. In addition, for the sake of improved clarity, the Commission directs EEC to amend Section 3.4(b) to read EEC has the right to designate the Owner to be the Customer for the Premise and the Owner of the Premise shall thereafter be liable for payment UCA recommendation owner grace period 41. In the UCA s view, it is not fair or reasonable that an owner can automatically be held responsible for future charges when receipt of notice under Section 3.4(b) is the first indication to the owner of its liability to EEC. 30 Accordingly, the UCA recommended that EEC adopt a short grace period after the owner is given notice of a tenant default, within which the owner can elect to discontinue RRO service. Should the owner elect to discontinue service, the owner should not be liable for any charges for RRO service between the date the owner receives notice and the expiry of the owner grace period EEC opposed the UCA s suggestion as it will result in stranded charges, namely charges that accrue between the time the owner reverted to being the customer and when it requested services to be discontinued The Commission agrees with EEC that adopting the UCA s suggestion would likely result in stranded charges, to the detriment of all RRO ratepayers. Further, holding an owner responsible for future charges in the event of a tenant default is consistent with the practice of holding owners responsible for future charges when they become the customer of record after a tenant vacancy. For these reasons the Commission denies the UCA s recommendation to adopt a short grace period after the owner is given notice of a tenant default, during which an owner can elect to discontinue RRO service UCA recommendation revising the wording of Section 3.4(b) for clarity 44. The UCA indicated that all parties questioned EEC on the lack of clarity in Section 3.4(b), and that EEC agreed to certain revisions to better clarify the obligations of the owner and the tenant in the case of a tenant default. Given the lack of clarity and based on the UCA s recommendations, which the Commission has addressed separately above, the UCA proposed a further revised wording of Section 3.4(b) As discussed above, the Commission has not accepted the UCA s proposed amendments to Section 3.4(b). Accordingly, the Commission rejects the UCA s proposed wording of Section 3.4(b) Exhibit X0032, UCA reply argument, paragraph 25. Exhibit X0028, UCA argument, paragraph 39. Exhibit X0031, EEC reply argument, paragraph 29. Exhibit X0028, UCA argument, paragraph Decision D (April 12, 2017)

15 2.2.5 Costs associated with identifying, searching for and contacting the owner 46. The UCA indicated that it supports the objective of mitigating costs associated with identifying, searching for and contacting the owner and recommended two mechanisms to assist in mitigating the charges which accrue to owners under Section 3.4(c) First, the UCA recommended revisions to EEC s customer sign-up process, discussed in Section of this decision, including the collection and retention of the status of a property as a rental premises. The UCA suggested that such information would be useful in many aspects, including streamlining the enrollment and de-enrollment process under Rule 021: Settlement System Code Rules. The UCA acknowledged that although the practice may not guarantee cost mitigation, such a practice is prudent and would result in minimal additional administrative burden Second, the UCA recommended that EEC s T&Cs be amended to reference the ability for an owner of a premises to enter into a landlord agreement. 36 Furthermore, the UCA recommended that if its recommendation regarding an amendment to the sign-up process was implemented, EEC should be required to inform owners of the option to enter into a landlord agreement as part of the follow-up process As discussed in Section of this decision, EEC opposed the recommendation to amend the sign-up process. However, EEC agreed with the UCA s recommendation to amend the T&Cs to reference the ability for an owner to enter into a landlord agreement. EEC proposed to add the following Section 3.4(d) to its T&Cs, which EEC proposed is functionally identical to a paragraph in EEA s current RRO T&Cs: 3.4(d) ENMAX Energy will provide Owners with the opportunity to register all Sites that they own or are responsible for such that in the case of vacancy, the Owner will automatically become the Customer. This registration will not bind the Owner to be responsible for past charges of a Tenant, incurred before the date of vacancy, unless specifically requested by the Owner As discussed in Section of this decision, the Commission does not accept the UCA s recommendation to require customers, at sign-up, to indicate if they are a tenant or owner and, in the event that they are a tenant, require EEC to contact the owner to inform them of their potential liability under Section 3.4(b) of the T&Cs. 51. The Commission agrees with the second aspect of the UCA s recommendation, and finds that owners may benefit from awareness of a possible cost-saving mechanism. Accordingly, the Commission finds that EEC s proposal to include Section 3.4(d) as part of its T&Cs is reasonable and directs EEC to include this section in the T&Cs Exhibit X0032, UCA reply argument, paragraph 31. Exhibit X0032, UCA reply argument, paragraphs Exhibit X0032, UCA reply argument, paragraph 33. Exhibit X0032, UCA reply argument, paragraph 34. Exhibit X0031, EEC reply argument, paragraph 36. Decision D (April 12, 2017) 11

16 2.3 Section 7.6: remedies for non-payment 52. EEC has proposed to amend Section 7.6 of its T&Cs, entitled Remedies For Non- Payment, to include the ability to make a report to a credit agency when a customer fails to pay billed amounts in full and on time. EEC stated that it intends to provide such information to a credit agency in an effort to provide more transparency and to act as a responsible party in a normal course of business. 39 Additionally, EEC indicated that knowledge that failing to pay the RRO bill may adversely affect a customer s credit rating may incentivize customers to pay their RRO bills, which may reduce the exposure of EEC and RRO ratepayers to bad debt expense The UCA did not generally oppose EEC s proposal to make reports to a credit agency, indicating that making reports to credit agencies may encourage customers to pay their bills on time which could reduce bad debt, benefitting all ratepayers. 41 However, recognizing the wideranging impacts resulting from changes to an individual s credit rating, the UCA recommended that, at minimum, EEC be required to provide notice to the customer and an opportunity to remedy the delinquency prior to EEC making a report to a credit agency. 42 The UCA indicated that this provision is more likely to be effective in motivating customers to resolve unpaid accounts EEC opposed the UCA s recommendation to provide notice to the customer arguing that, in certain instances, providing notice may not be effective and may simply delay remedial action, with a consequential increase in potential bad debt The CCA viewed reporting non-payment to credit agencies as extreme as it does nothing to collect the account. Additionally, the CCA identified that there are varying degrees of nonpayment and some degrees do not warrant such action. The CCA recommended that, if making reports to a credit agency is approved, there should be restrictions and EEC should only be able to make a report after an extended period of non-payment and most likely only after referral to a collection agency In response to the CCA, EEC identified that the proposed amendment to Section 7.6 of the T&Cs would not require EEC to report a delinquent customer to credit agencies, and EEC does not propose to adopt a draconian approach to exercising its right to report a delinquent customer, any more than it adopts such an approach to the existing approved remedies of disconnection, referrals to collection agencies or starting legal action. 46 Further, EEC stated that customers who intentionally fail to pay their bills, fail to pay their bills repeatedly or over a long period of time and who make no effort to contact EEC are the customers against whom EEC would like the right to report to credit agencies Exhibit X0007, Appendix 1 EEC RRO TC proposed amendments schedule. Exhibit X0027, EEC argument, paragraph 13. Exhibit X0028, UCA argument, paragraph 62. Exhibit X0028, UCA argument, paragraph 64. Exhibit X0032, UCA reply argument, paragraph 39. Exhibit X0031, EEC reply argument, paragraph 42. Exhibit X0029, CCA argument, paragraphs 5-8. Exhibit X0031, EEC reply argument, paragraphs Exhibit X0031, EEC reply argument, paragraph Decision D (April 12, 2017)

17 57. Under the current T&Cs, EEC has access to a number of remedies for non-payment. These remedies range in severity and, accordingly, have a range of implications for customers. The proposed amendment to Section 7.6 of the T&Cs would permit EEC to make a report to a credit agency in an effort to incent customers to pay their bills and reduce bad debt. The Commission is supportive of efforts to reduce bad debt to the benefit of ratepayers and agrees with EEC and the UCA that having the power to make a report to a credit agency as a remedial action may reduce bad debt by further incenting customers to remedy any unpaid charges. Accordingly, the Commission finds it reasonable to allow EEC to make a report to a credit agency as a remedy for non-payment. 58. However, in this proceeding, both the UCA and the CCA raised an issue that without notification, a customer may not even be aware that a report to a credit agency has been made, and therefore, making such a report is unlikely to aid in collection of non-payments. This point appears to be acknowledged and confirmed by EEC. When EEC was asked whether provision of notice to a customer of EEC s intention to make a report to a credit agency, prior to doing so, would be more effective in motivating the customer to resolve any unpaid accounts, EEC s response was: EEC agrees that notice of its intention to take action under Section 7.6 may prompt resolution of unpaid accounts The Commission agrees that providing notice to a customer prior to making a report to a credit agency may further aid in the collection of non-payments. Further, EEC has not demonstrated that any costs associated with a delay in remedial action caused by a requirement to provide notice to a customer will outweigh the benefit from improved resolution of unpaid accounts. Accordingly, the Commissions finds that prior to making a report to a credit agency, EEC is required to give notice to the customer and provide the customer five business days to remedy their delinquency. The Commission directs EEC to revise Section 7.6 of the T&Cs to reflect this finding. 2.4 Section 8.5: notice of disconnection 60. EEC proposed to amend Section 8.5 of its T&Cs, entitled Notice Of Disconnection, to include Section 8.5(b) which states: (b) Notice of disconnection must be in writing and may only be given by mail, hand delivery or facsimile in accordance with Section 10.4(a)(i), (ii) or (iii) and Section 10.4(c) EEC indicated that the purpose of Section 8.5(b) is to require notices of disconnection to be provided only by mail, facsimile or hand delivery. EEC indicated that this amendment does not represent a change from the current T&Cs but is required given EEC s proposed amendments to Section 10.4 of the T&Cs, which is discussed in Section 2.6 of this decision. The proposed amendments to Section 10.4 of the T&Cs would allow EEC to provide some notices by means other than those listed in Section 8.5(b) Exhibit X0024, response to EEC-UCA-2016NOV10-003, PDF page 13. Exhibit X0027, EEC argument, paragraph 18. Exhibit X0027, EEC argument, paragraph 19. Decision D (April 12, 2017) 13

18 62. In Section 2.6 of this decision, the Commission has approved an expansion of the means by which EEC can generally provide notices to customers. The Commission agrees with EEC that given the seriousness of notices of disconnection, these notices should be delivered in a manner that is most likely to come to the immediate attention of the customer. Accordingly, the Commission finds that it is reasonable to require EEC to continue to provide notices of disconnection by mail, hand delivery or facsimile. 63. However, the Commission is concerned that in the event a customer receives all other notices by one of the expanded means approved in this decision (for example, text message or ), this customer may have a reasonable expectation that all future notices (including notices of disconnection) would be brought to his/her attention through the same means. Accordingly, the Commission considers that if EEC has been communicating with a customer via telephone, or text message for the purposes of any other notices provided pursuant to Section 10.4 of the T&Cs, they must also provide the notice of disconnection by telephone, , or text message, in addition to delivery by mail, hand delivery or facsimile required pursuant to Section 8.5(b). The Commission directs EEC to amend Section 8.5 of the T&Cs such that, in the event EEC s regular method of providing all notices, demands or requests to a customer pursuant to Section 10.4 is by , text message or telephone call, that EEC shall use this method to provide further notice of disconnection in addition to providing notice of disconnection by one of the methods prescribed in Section 8.5(b). 2.5 Section 8.7: service guarantee 64. EEC proposed to amend Section 8.7(b) of the T&Cs, entitled Service Guarantee, by replacing the generic term credit agency with the newly defined term Credit Agency. 65. Neither the UCA nor the CCA opposed EEC s proposed amendment to Section 8.7(b). 66. Given the Commission s approval in Section 2.1 of this decision for EEC to include the defined term Credit Agency as part of EEC s T&Cs, the Commission finds EEC s proposed amendment to Section 8.7(b) to be reasonable. The Commission therefore approves the proposed amendment. 2.6 Section 10.4: notice to customers 67. EEC proposed to amend Section 10.4 of its T&Cs, entitled Notices, to read as follows: (a) Unless otherwise stated in these RRT Terms and Conditions, all notices, demands or requests that ENMAX Energy is required or permitted to give to the Customer may be given by any of the following means: (i) by mail to address on record with ENMAX energy; (ii) by facsimile to the facsimile number on record with ENMAX Energy; (iii) by hand delivery to the address on record with ENMAX Energy; (iv) by to the address on record with ENMAX Energy; (v) by text message to the mobile phone number on record with ENMAX Energy; or (vi) by telephone call to the phone number on record with ENMAX Energy. 14 Decision D (April 12, 2017)

19 (b) Unless otherwise stated in these RRT Terms and Conditions, all notices, demands or requests that the Customer is required or permitted to give to ENMAX Energy may be given by mail, hand delivery, phone or facsimile using the following contact information: (c) Any notice, demand or request given under this Section is deemed to be effective as follows: (i) if by mail, at the end of the fourth(4 th ) Business Day after mailing; (ii) if by facsimile, on the next Business Day following a confirmed facsimile transmission; (iii) if delivered by hand, at the time of delivery, with proof of delivery; (iv) if by , on the next Business Day, unless ENMAX Energy receives an error message or other indication that the transmission was not successful; (v) if by text message, on the next Business Day, unless ENMAX receives an error message or other indication that the text message was not successfully delivered; and (vi) if by telephone, at the time of the telephone call, where the person answering the telephone identifies himself or herself as the Customer or as a representative of ENMAX Energy, as the case may be. (d) The Customer or ENMAX Energy may change its contact information from time to time by giving notice of that change to the other party in accordance with this Section EEC indicated that the proposed amendment to Section 10.4 of the T&Cs would expand the means by which EEC can generally communicate with customers to include , text message and telephone, in addition to the means set out in Section 2.4 of this decision for communicating disconnection notices. The amendment also specifies the effective dates of communication delivered by the various permitted means. Additionally, EEC s proposed amendment eliminates the requirement that the original copy of any notices, demands or requests sent from EEC to a customer by facsimile transmission be mailed or delivered to a customer. 52 The UCA raised a number of concerns with the proposed amendments to Section 10.4 of the T&Cs. The Commission will examine each of these concerns in the following subsections Communication by , text message and telephone 69. EEC proposed that its amendment to Section 10.4 to allow communication with customers via , text message and telephone is a modernization of its notice provision The UCA submitted that while and text message may be more cost-effective, they are a more tenuous means of communicating notice under the T&Cs. 54 Accordingly, at minimum, EEC should be required to advise a customer, at the time a customer is asked to provide their Exhibit X0007, Appendix 1 EEC RRO TC proposed amendments schedule. Exhibit X0027, EEC argument, paragraphs Exhibit X0031, EEC reply argument, paragraph 45. Exhibit X0028, UCA argument, paragraph 84. Decision D (April 12, 2017) 15

20 contact information, that their information is being requested, in part, to allow EEC to send notices to the customer via these methods The UCA also recommended that EEC be required to first obtain express consent from a customer prior to sending notices by or text message and, should the customer provide consent, EEC further advise the customer of the need to keep their contact information with EEC current In response to the UCA, EEC indicated that it is reasonable to assume that customers who provide their contact information understand that the purpose of providing that information is to permit EEC to communicate with them through those means. Additionally, customers can choose to not provide their or telephone numbers, which would result in all communications being completed via mail. EEC also indicated that if the UCA s suggestion was to be adopted, EEC would be required to contact every existing customer who has provided their address or telephone number to obtain their consent, which would be impractical and unnecessary In the Commission s view, customers may benefit from the convenience of EEC s proposal to contact customers via , text message and telephone, and therefore, these are reasonable means of communication to be included in EEC s T&Cs. However, the Commission has concerns specifically related to communications via text message. The Commission agrees with EEC that when customers provide their information, such as an address, it is reasonable to assume that the customer expects the information to be used, at least in part, for the purpose of communication. However, in the case of a customer providing a phone number, it is not sufficiently clear that the customer would expect to be notified via text message as they may have provided the number with expectations of receiving phone calls. 74. The Commission does not agree with the UCA s position that EEC should be required to receive consent prior to sending notices by or text message. As indicated above, with the exception of text messaging, it is reasonable to assume that when a customer provides their contact information, they expect to be contacted via those means. Additionally, the Commission agrees that it would be impractical for EEC to be required to contact existing customers who have already provided their contact information to receive consent. The Commission notes that under Section 10.4(d) of the T&Cs, customers will have the ability to change their contact information by providing notice to EEC should they want to remove themselves from certain means of communication. 75. In light of the above, the Commission finds that EEC s proposal to amend Section 10.4 of the T&Cs to allow EEC to communicate with customers via , text message and telephone is reasonable. However, given its concerns as previously expressed, the Commission finds that when communicating via text message, EEC must also communicate with customers by one of the other approved means as set out in the amended Section 10.4 of the T&Cs, unless otherwise directed or expressly consented to by the customer. The Commission directs EEC to revise Section 10.4 of the T&Cs to reflect this finding Exhibit X0028, UCA argument, paragraph 77. Exhibit X0028, UCA argument, paragraphs 78 and 84. Exhibit X0031, EEC reply argument, paragraph Decision D (April 12, 2017)