Fixed-price utility billing plans frozen

The Public Utilities Commission on Tuesday put a freeze on controversial billing plans offered by CenterPoint Energy and Xcel Energy, shutting down both fixed-price programs for the 2007-2008 winter heating season while an investigation by the attorney general's office continues.

It remains to be seen whether the bulk of the 56,000 customers enrolled in the program, which allows customers to pay a set monthly bill no matter the price of natural gas or how cold or mild the weather, will be allowed to break their yearlong contracts. The commission voted 3 to 1 to give 1,437 low-income customers who receive federal grants the option of getting out of the program immediately, without having to pay the customary $30 penalty fee.

Minnesota Attorney General Lori Swanson, who filed a complaint in February, has argued that the majority of customers who enrolled in the programs as a hedge against volatile natural gas prices and unpredictable weather have ended up overpaying.

Swanson is pushing the PUC to allow current customers out of programs without a penalty.

According to her calculations, CenterPoint and Xcel customers have paid some $26 million more than they would have under standard billing rates. Last year the average Xcel customer paid about $680 more while CenterPoint customers overpaid by about $160 per year, since the program began six years ago. Fewer than 10 percent paid less than they would have with standard billing.

Those figures don't include payments from the current year's plan, which ends Oct. 31, and which the attorney general's office predicts also will be a loser for customers.

Xcel failed to reach a settlement with the attorney general's office despite delaying the PUC meeting for more than a half-hour on Tuesday with last-minute negotiations.

An attorney for Xcel said it would resolve the issue by Friday, either with a signed agreement or a proposal on how to cover the costs of discontinuing the program. If the issue remains unresolved, the commissioners would need to step in.

Xcel said in May that it would voluntarily stop its Fixed Monthly Gas Payment program after this season, even though it was in the second of a three-year pilot.

CenterPoint, meanwhile, continues to believe in its No Surprise Bill plan. Its program has significantly more customers enrolled-42,000 to Xcel's 14,000 - and the company hopes to preserve it as an option.

"We believe this program has had value for customers since we began offering it in 2001," said Rolf Lund, a CenterPoint spokesman. "We wanted to help customers find a way to deal with the unpredictability of natural gas prices and thousands have used it to do so."

An additional frustration for the attorney general's office remains getting data from WeatherWise USA, a Pittsburgh company that sets the fixed-price bills based on a proprietary formula.

Neither the utilities nor the PUC has oversight of the information, making it impossible to determine whether customers have consistently overpaid because of fraud or some other reason.

Although the commission originally gave its blessing to the programs as well as how they were marketed, a majority of members now are expressing a growing distaste for the plans.

Chairman LeRoy Koppendrayer often presses the point that customers should have a right to choose a plan-even if it loses money.

He and his colleagues seem to agree that significant changes must be made in order for the fixed-price program to move forward after next year's moratorium.

Among the options under consideration are a more transparent, side-by-side comparison for consumers between the cost of the fixed- price plan vs. that of standard billing.