RESA Statement of Principles

  1. RESA’s goal is to advocate and work towards the creation of vibrant and sustainable competitive retail energy markets where competitive retailers, not regulated utilities, provide retail electric service to consumers.
  2. Retail competition is superior to regulated service as it delivers customer-focused service, enables innovative product development and leads to the most efficient market price.
  3. All consumers should be afforded the opportunity to participate in competitive     retail markets and avail themselves of the resulting benefits that only competitive retail markets can deliver.
  4. RESA members acknowledge that different jurisdictions may be evolving based on different statutory frameworks and schedules and that RESA’s advocacy may reflect these dynamic situations.
  5. Elements of a vibrant and sustainable competitive retail electric market include:
    1. Competitive market forces are more effective than economic regulation in arriving at efficient prices.
    2. Customer choice is essential for competitive markets to thrive – customers themselves best express their desires in their individual choice of electric service.
    3. Default Service (also known as Standard Offer Service, Provider of Last Resort Service, or Basic Generation Service) should be viewed as transitional, and a date certain should be established for full retail energy competition.
      1. While different default service pricing mechanisms may be appropriate for different consumer classes, robust, sustainable competition should be available to all consumers, not just large commercial and industrial consumers.
      2. Continued, steady expansion of hourly-priced default service to ever smaller customer classes should be implemented.
      3. For smaller customers not on hourly-priced default service and not taking service from an alternative retail supplier, standard offer service prices should reflect a market based retail price and have the ability to be adjusted as frequently as necessary to reflect changes in the market.
      4. Regulated utility rates should be unbundled into all of their various components so that costs associated with the provision of retail services are separated and not part of the regulated distribution rates.
    4. Default service should not be a barrier to competition
      1. Default service should not be designed to compete with competitive services.
      2. Default service is a plain vanilla, backstop service.
      3. Default service should be priced at a market price and should cover all retail risks/costs.
      4. Default service should be forward looking, and should not provide for retroactive adjustments.
      5. The default service should be sufficiently adjusted to reflect changes in market prices.
      6. Effective codes of conduct should be implemented to prevent anti-competitive behavior.
      7. Default service should impose no prohibitions on a customer’s right to choose to migrate to and from default service and should be priced to reflect the possibility of such migration.
    5. Uniform business rules for the following market elements facilitate efficient market development and operation:
      1. Standardized electronic data interchange/electronic business transaction (EDI/EBT).
      2. Readily available customer data.
      3. Simple and timely enrollment and switching processes.
      4. Equivalent treatment of competitively supplied and utility provided services with respect to service terminations and recovery of bad debt expenses associated with the generation portion of customer bills.
      5. Retail consumers should have a full range of competitive billing options.
      6. Where utility consolidated billing exists, retail suppliers should be able to sell their receivables to the utility to mitigate consumer credit and collections related costs and the supplier’s uncollectibles risk.
      7. Any rate changes, charges, refunds, rebates or waivers should reflect cost causation and should not be implemented in a manner that shifts costs between regulated and non-regulated customer classes.
      8. Recovery of prudently incurred and fully mitigated stranded costs or deferrals, if any, should be implemented in a non-discriminatory, competitively neutral manner.
    6. Low income and special needs customers should be afforded equal access to competitive opportunities.
    7. Mandated government programs for societal benefit, to the extent they are implemented, should be implemented in a competitively neutral manner.
  6. Elements of a vibrant and sustainable competitive retail natural gas market include:
    1. Competitive market forces are more effective than economic regulation in arriving at efficient prices.
    2. Customer choice is essential for competitive markets to thrive – customers themselves best express their desires in their individual choice of natural gas service.
    3. Default Service (also known as Standard Service Offer (“SSO”) or Provider of Last Resort Service) should be solely a market-based, monthly variable rate.  Utilities should be encouraged to exit the merchant function and to employ an auction process to establish SSO rates.   
      1. While different default service pricing mechanisms may be appropriate for different consumer classes, robust, sustainable competition should be available to all consumers, not just large commercial and industrial consumers.
      2. For smaller customers not taking service from an alternative retail supplier, standard offer service prices should reflect a market based retail price and have the ability to be adjusted as frequently as necessary to reflect changes in the market.
      3. Regulated utility rates should be unbundled into all of their various components so that costs associated with the provision of retail services are separated and not part of the regulated distribution rates.
    4. Default service should not be a barrier to competition.
      1. Default service should not be designed to compete with competitive services.
      2. Default service is a plain vanilla, backstop service.
      3. Default service should be priced at a market price and should cover all retail risks/costs.
      4. Default service should be forward looking, and should not provide for retroactive adjustments.
      5. The default service should be sufficiently adjusted to reflect changes in market prices.
      6. Effective codes of conduct should be implemented to prevent              anti-competitive behavior.
      7. Default service should impose no prohibitions on a customer’s right to choose to migrate to and from default service and should be priced to reflect the possibility of such migration.
    5. Uniform business rules for the following market elements facilitate efficient market development and operation:
      1. Standardized electronic data interchange/electronic business transaction (EDI/EBT).
      2. Readily available customer data.
      3. Simple and timely enrollment and switching processes.
      4. Equivalent treatment of competitively supplied and utility provided services with respect to service terminations and recovery of bad debt expenses associated with the generation portion of customer bills.
      5. Retail consumers should have a full range of competitive billing options.
      6. Where utility consolidated billing exists, retail suppliers should be able to sell their receivables to the utility to mitigate consumer credit and collections related costs and the supplier’s uncollectibles risk.
      7. Any rate changes, charges, refunds, rebates or waivers should reflect cost causation and should not be implemented in a manner that shifts costs between regulated and non-regulated customer classes.
      8. Recovery of prudently incurred and fully mitigated stranded costs or deferrals, if any, should be implemented in a non-discriminatory, competitively neutral manner.
      9. Recovery of prudently incurred and fully mitigated stranded costs or deferrals, if any, should be implemented in a non-discriminatory, competitively neutral manner.
    6. Low income and special needs customers should be afforded equal access to competitive opportunities
    7. Mandated government programs for societal benefit, to the extent they are implemented, should be implemented in a competitively neutral manner.
  7. RESA members acknowledge the critical importance that substantive, practical, fair      and workable consumer protection and marketing practices play in creating robust and sustainable competitive retail market that provides value-added products and services to customers, and hereby commit to undertaking and promoting the following practices:
    1. Not engaging in unfair, deceptive or misleading conduct as defined by applicable state and federal statutes and regulations.
    2. Not making false or misleading representations of competitive products and services, including misrepresenting rates, prices, or level of customer savings.
    3. Using plain language, including words and images that facilitate customer understanding of competitive products and services.
    4. Providing customers with written information, upon request, or with a link to a website at which information can be obtained, in response to all customer inquiries.
    5. Using reasonable efforts to provide accurate and timely information about products, services, and customer ’s rights of cancellation.
    6. Ensuring that any product or service offering made by a competitive retail electric provider contains information designed to be understood by the customer, including but not limited to providing any written information to customers in the language which is used during a sales call or on-site visit or negotiation of the contract.
    7. Ensuring prompt and fair investigations of all customer inquiries and complaints concerning a competitive supplier ’s service and/or marketing practices.
    8. Cooperating fully with the appropriate state public utility commission, state consumer agency and local law enforcement in investigations concerning unfair, deceptive and/or misleading marketing practices prohibited by state law or regulation.
    9. Applying all of the above principles and practices in:
      1. Training of marketing representatives.
      2. In-person and telephone contact with customers.
      3. Dispute resolution of customer complaints and disputes
  8. 8.         RESA members believe that achieving more efficient use of energy is dependent on modifications to the end-use of electricity and the promotion of technologies that empower customers to control their electric usage.  Among the means for such modifications are:
    1. Market-Based Pricing.  Market-based pricing provides significant opportunity for customers to engage in increased demand response while enabling development of a competitive market that can bring greater innovation to maximize energy efficiency offerings that meet the needs of customers.
    2. Reliance on Competitive Market.  Maximum innovation and effectiveness can be achieved by relying on the competitive market to deliver energy efficiency, demand response programs, and other third party product and service offerings.  Regulated electric distribution companies should not be the sole provider of or primary vehicle for the delivery of these value-added services as doing so would stifle retail market development.  Rather, the appropriate primary role of regulated electric distribution companies should be that of a competitively neutral conduit for the provision of these value-added services by the competitive market.
    3. Advanced Metering Infrastructure and “Smart Grid”.  Promulgation of advanced meters and other “smart grid” technologies provide significant opportunities for customers to receive real-time information that enables them to take actions resulting in decreased usage, which in turn improves system reliability and provides a positive impact on the environment. Critical and indispensable elements of Advanced Metering Infrastructure and other “Smart Grid” technologies include:
      1. Eligibility.  Competitively offered programs utilizing advanced meters should be eligible for any available utility energy efficiency program funding on a non-discriminatory basis.
      2. Technical Standards.  Communications protocols, utility databases and system interfaces should be subject to stringent technical standards that allow competitive smart energy product offerings on a non-discriminatory basis.  There should be standard communication protocols for communicating with meters and open, non-proprietary 2-way access for competitive electric suppliers and curtailment service providers to send/receive information to/from in-home devices.
      3. Cost-Effectiveness.  The promulgation of cost-effective third-party programs to encourage the implementation of new and more efficient equipment and technology for all customer classes, including the mass market.
      4. Consumer Education.  The development and promulgation of programs to educate and empower consumers to utilize the latest technology to control their energy usage at any given hour of the day.  Statewide and regulated electric distribution company-specific education programs should include education on competitive service offerings.
      5. Competitive Neutrality.  Regulated electric distribution company-specific energy efficiency/demand response programs, and any government programs promoting and implementing advanced metering and other “smart grid” technologies should be administered in a competitively neutral fashion and must be accessible to all consumers regardless of whether they are customers of the regulated electric distribution company or a competitive supplier.
    4. Prevention of Barriers.  Public policy regarding demand response and energy efficiency should encourage the elimination of barriers to participation of such demand-side resources in organized competitive markets.

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