NRRI 16-03 Billing Rules Standards and Practices

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Utility bills are a universal form of regular communications between utilities and their customers. Bills are, of course, the primary means by which utilities report usage data to consumers and remind consumers of the essential information about how much is owed and when. In addition, though, depending on the many different interests held by utilities, their regulators, consumers of various stripes, and society in general, bills and bill inserts can and often do provide much more information. A few of the major examples include: utility rates and billing determinants; current usage compared to previous usage or sometimes compared to other similar consumers; progress reports toward meeting budgets or achieving greater efficiency in utility consumption; where to turn for answers to questions and education about the bills themselves or utility usage in general; and information about available financial assistance and other kinds of customer service programs.
The Indiana Utility Regulatory Commission (IURC) held a state-wide Indiana Billing Symposium in November 2015 for the purposes of examining billing practices and related issues for the state’s electric, natural gas, water, and wastewater utilities. The Indiana Billing Symposium invited participation from all of these utilities in the state, whether or not regulated by the IURC (Kline and Stanton 2016).
In support of and informed by the Indiana project, the authors completed this report about state utility billing rules and practices and related customer communications. The major focus of this work is exploring possible linkages among the billing rules and practices, related customer communications and education materials provided by both utilities and commissions, and consumer inquiries and complaints that are directed towards both utilities and commissions. The major question addressed is whether and how the communications might be improved so that complaints might be avoided.
Utility billing systems and related communications were the subject of many studies in the past, both because of the potential for high-quality feedback to assist with efficiency and conservation goals and because some states restructured some utilities to allow competitive choice of providers for some services. In addition, several state legislatures have prescribed certain specific charges and directed how those charges shall be reflected on consumer bills. These factors are still affecting billing systems today, but so are new or emerging issues such as electronic billing and payment options, and new, more detailed cost and usage data available from advanced metering information (AMI) systems. And, of course AMI infrastructure is just one element of new possibilities arising from dozens of fast-emerging, enabling technologies related to sensing, monitoring, communicating, and controlling utility facilities and consumer usage of appliances and utility services that are in development, with some already starting to be offered by utilities and competitive suppliers. Much of the current focus is on electric utilities, but similar issues also apply to the natural gas, water, and wastewater industries. This report does not address telecommunications providers but does explore rules for all regulated energy and water utilities.
This research relies on a review of literature and information gathered from state utility regulatory commissions, consumer advocates, and utilities, to develop a picture of the current status of and near-term goals and objectives for utility billing systems. It summarizes current thinking about utility bills from all over the country, identifying the many important goals and objectives for utility bills and related communications, from the perspectives of utilities, utility regulators, and consumer groups and their representatives. It reviews how current state billing rules reflect those goals and objectives. It identifies over a dozen major categories of information that are commonly covered by state utility billing rules and incorporated into billing and other related customer communications and provides readers with ready access to resources needed to review the approaches used by different states and utilities.
This work is descriptive, not prescriptive: The authors are not recommending any particular approaches towards billing rules and related communications; instead, the goal is to summarize current approaches and identify topics for consideration in the near future.
Part I reviews the genesis of this project and provides an introduction to the topic. Included are references to more than a half-dozen current state utility regulatory commission dockets that are investigating billing issues or complaints. Part II reviews the methods used for this work, which include a literature review, a brief email survey of state public utility regulatory commissions, analysis of complaints data collected from almost half of the country’s state commissions, a content review of billing rules from all states, a review of sample utility bills and related customer information from both utilities and commissions, and observations from the Indiana Billing Symposium.
Part III presents the findings from the information review. It includes a discussion of the purposes and objectives for billing and customer care systems held by all major interested parties: commissions, utilities, different types of consumers and consumer advocacy groups, and society as a whole. The goals and objectives overlap in important ways, but they are not identical. The content analysis of state utility billing rules identifies important similarities and differences among the states. The authors identify some topics that are practically universal, included in nearly all state rules, and other topics that are unique or covered in only a small number of state rules. Those are mentioned but not reviewed. Sixteen different topics that are included in many state rules are reviewed and discussed; the authors believe those topics are most relevant to the issues that might turn into consumer complaints. Those topics are listed in Table E-1, which lists the topics and shows how many state rules include provisions for each one. Each of the 16 topics is discussed to explore the major ideas that are included and explain how some states are implementing that topic. The Appendix provides an index of state public utility regulatory commissions’ administrative rules.
Part III also includes the findings from a review of complaints data obtained from 23 state utility regulatory commissions. The complaints data is analyzed to explore differences by utility industry (electric, natural gas, water and wastewater) and by topic areas such as billing, rates, service deposits, special payment arrangements, service disconnections or terminations, and quality of service. The available data shows electric industry complaints leading the other industries in all but one of 19 of the states where this data was available. For nine of 13 states with data available by complaint type, complaints related to billing and rates issues are a primary topic. Data analysis is made difficult because there is little consistency in the terms states use to categorize complaints. For example, for what Table E-1 refers to as “Denial, disconnection,” different states with complaints data analyzed for this report use categories such as cancellation, cancellation issue, disconnect issue, disconnection, discontinuance, and terminations.

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