Transcription

*SEbAFiling ReceiptReceived - 2021-08-27 03:02:29 PMControl Number - 51830ItemNumber - 26

PROJECT NO. 51830REVIEW OF CERTAIN RETAILELECTRIC CUSTOMER PROTECTIONRULES§§§PUBLIC UTILITY COMMISSIONOF TEXASALLIANCE FOR RETAIL MARKETS' COMMENTSIN RESPONSE TO PROPOSAL FOR PUBLICATIONI.INTRODUCTIONAt the July 29, 2021 Open Meeting, the Public Utility Commission of Texas("Commission") approved the Proposal for Publication ("PFP") to implement changes from HouseBill ("H.B.") 16 and certain sections of Senate Bill ("SB") 3 ofthe 87th Legislature. The PFP waspublished in the Texas Register on August 13 , 2021 .The PFP proposes to amend 16 TEXAS ADMn\USTRATIvE CoDE ("TAC") §§ 25.43, 25.471,25.475,25.479, and 25.498, as well as add a new rule: 16 TAC § 25.499. In addition to these rulechanges, two questions for comment were included related to the Provider of Last Resort("POLR") rates established by 16 TAC § 25.43 and the proposed Acknowledgement of Risk("AOR") requirements of 16 TAC § 25.475. The PFP included a deadline of August 27, 2021 forresponsive comments from stakeholders. Therefore, these comments are timely filed.The Alliance for Retail Markets ("ARM")1 is an association of competitive retail electricproviders ("REPs"), and each member is certificated to provide retail electric service to customersin areas open to customer choice in Texas. On July 6, 2021, ARM filed comments in response toCommission Staff's Discussion Draft and ARM appreciates Commission Staff's consideration ofthese and other comments in crafting the PFP. ARM offers these additional comments to assistthe Commission in further development efforts for this crucial rulemaking and is available to assistor provide additional information as may be helpful.1 The members of the Alliance for Retail Markets ("ARM") participating in this project are Calpine Retail;Constellation NewEnergy, Inc.; ENGIE Resources LLC; Gexa Energy, LP; NRG Retail Companies (Reliant, GreenMountain Energy Company, U.S. Retailers LLC (Cirro Energy and Discount Power), Stream SPE, Ltd., XOOMEnergy Texas, LLC, and the Direct Energy family of retail electric providers); and the Vistra Corp. REPs (4ChangeEnergy, Ambit Energy, Express Energy, TriEagle Energy, TXU Energy, and Veteran Energy).Page 1 of 26

II.COMMENTSThese comments first include a summary, followed by a more in-depth explanation ofARM' s recommendations for applicable rule sections included in the PFP. Comments in responseto the two questions included with the PFP are then included.A.SummaryThe following bullet points provide a summary of ARM' s comments herein, and ARMwould particularly emphasize the importance of the compliance deadline issue in the first itembelow:.Applicability of New Customer Protection Rules - § 25.475(a) and new § 25.499:o Applicability with respect to wholesale indexed product ban for residential andsmall commercial customers, acknowledgment of wholesale pricing risk for largercustomers, and increased contract notice expiration requirements for residentialterm contracts should track H.B. 16 to be effective only for contracts entered intoon or after September 1, 2021.o Requirements that go beyond H.B. 16 should be effective 120 days after adoptionof the rules to give REPs time to modify systems and implement. Wholesale Indexed Product Acknowledgment of Risk and Other Rules Applicable toLarger Customers - § 25.471 and new § 25.499o ARM supports the PFP' s changes to the structure of the rules applicable tocustomers other than residential and small commercial customers; the creation ofnew § 25.499 improves § 25.471' s enumeration of the rules that larger customerscan waive than what was present in the Discussion Draft.Provider of Last Resort ("POLR") Rule - § 25.43o § 25.43(c)(8): Modify definition of Market-based product to allow for consistencyooowith other in-market products.§ 25.43(f)(1):. Modification of the POLR rate will require modifications to the associatedStandard Terms of Service provided via links in the rule. Correct the typo in Section 1(iv) ofthe Standard Terms of Service for LargeNon-Residential Service to state "energy charge" rather than "RTSPP."§ 25.43(1)(1)(E): Modify methodology to allocate those customers dropped toPOLR among VREPs in a simpler manner by allocating equally up to the VREP' sindicated maximum.§ 25.43(m)(2)(A) and (B)' (m)(2)(A)(i), (B)(i), and (C)(i): Modify definition of "non-bypassablecharges" to include surcharges beyond nodal fees, ancillary service charges,and ancillary service imbalance charges.(m)(2)(A)(iii) and (B)(iv)Page 2 of 26

Because each TDU territory includes two to three load zones,modify the load zone reference to "load zone partially or wholly in a service area" to so that customer EFLs do not vary within the sameTDU territory depending on the load zone that they are located in.The POLR rate for residential and small commercial customerswould benefit from further refinement to ensure that Large ServiceProviders ("LSPs") that provide POLR service are able tosufficiently recover their costs to serve. Such changes shouldinclude a modification to the customer charge to 0.09 per kWh forresidential customers and to 0.05 per kWh for small non-residentialcustomers, combined with either of the following:2o modification to the maximum energy charge to be calculatedas a rolling average of the RTSPP from the preceding 60odays with a 125% multiplier; ora modification to the maximum energy charge that if theaverage RTSPP in the 30 days preceding the transition to aPOLR rate is at least twice the historical average RTSPP,then the LSP energy charge must be the historical averageRTSPP multiplied by the number of kWhs the customer usedduring that billing period and further multiplied by the ratio'of the preceding 30 days' average RTSPP to the averageRTSPP from the previous 12-month period endingSeptember 1.(m)(2)(A)(iv) and (B)(v): Clarify that "number of kWhs the customer used"is based on information provided by the TDU, rather than stating that it is"interval data."(m)(2)(B): Separate POLR rate formulas for medium non-residentialcustomers from small non-residential customers.§ 25.43(p)(13) and (14): Now that advanced metering systems have made same oday switching possible and to ensure that the REP is prepared to serve thatcustomer, modify switch date acceleration provisions to give the recipient REP theooption to accelerate the switch date .§ 25.43(t),(v), and (w)' .(t)(1): Amend to acknowledge that ERCOT may use different messagingfor customers transitioned to a VREP during a POLR drop because thesecustomers are not served on the POLR rate.(t)(2)(G), (t)(3)(A), (v), (w)(2)(A), and (w)(2)(B): Changes from "shall" to"must" do not always work; here, "shall" should be changed to "will"instead of"must."General Retail Electric Provider Requirements and Information Disclosures to Residentialand Small Commercial Customers Rule - § 25.475o §25.475(b)2 ARM continues to evaluate other alternatives and reserves the right to modify or retract either of theserecommendations in reply comments, or lend support to meritorious proposals from other commenters.Page 3 of 26

''(b)(5) and (8): Remove the addition of"ancillary service charges" from thedefinitions of Fixed Rate Product and Price because this is adequatelyaddressed by the current rules. Add changes for "regulatory actions" to thedefinition of Fixed Rate Product for clarity and consistency. Alternatively on (b)(5) and (8): clarify the references to ancillaryservice charges to help distinguish the ancillary service costs that aREP can and cannot reasonably control.(b)(1) and (2): Remove Acknowledgment of Risk ("AOR") reference fromthe definitions of Contract and Contract Documents because this should bea component of the Electricity Facts Label ("EFL") rather than a separatedocument.o § 25.475(c): 'o§ 25.475(e)(1) and (2):'' oooo(c)(1)(A), (C), (D) and (c)(2)(A): Remove references to AOR as they areunneeded if AOR is included in the EFL.(c)(3)(G): Modify phrasing to permit AOR to be incorporated into EFL.(e)(1): Modify phrasing of communications requirement to track thelanguage of H.B. 16 for consistency with (e)(2)(B).(e) generally: H.B. 16 requires notice of contract expiration for residentialcustomers only; do not expand notice requirements beyond H.B. 16 to applyto small commercial customers. (e)(2)(A): If notice requirements are expanded to small commercialcustomers nonetheless, then add subsection (iii) to maintain theREP's ability to send the final notice of contract expiration 14 daysprior to the expiration date.(e)(2)(A): For contracts with terms 12 months or longer, REPs should bepermitted to send the first contract expiration notice up to three monthsbefore expiration.(e)(2)(C): Either delete as duplicative of § 25.475(c)(3)(E) or makeconforming clarifications that "sufficient expiration notice" means the finalcontract expiration notice rather than sending three contract expirationnotices.§ 25.475(e)(3)' (e)(3)(B)(i): Correct typo by adding "visible" back and removing "readily"instead. (e)(3)(B)(ii)-(iii): Same correction to remove "readily" from thesesubsections.§ 25.475(e)(4): Remove reference to AOR.§ 25.475(g)(2)(B): Add AOR to EFL pricing disclosure requirement for indexedproducts.§ 25.475(j): Remove (j) because it is duplicative if AOR is added to EFL.Alternatively, modify reference to AOR to incorporate it into the EFL.Issuance and Format of Bills Rule - § 25.479o§ 25.479:Page 4 of 26

'.(d)(1): Modify the months that public service notices must be sent to Apriland December rather than April and October so that the notices are providedduring times where there are fewer additional required bill messages.(d)(2): Align with website reference in Your Rights As a Customer("YRAC") document by modifying to allow REP to satisfy public servicenotice requirement by directing customers to appropriate website.Maximum Rate for Prepaid Service Rule - § 25.498o § 25.498(c)(15): Modifications may be required to tests for establishing whetherprepaid product is compliant with requirement that it be priced no greater than thePOLR rate if Commission's changes in § 25.43(m)(2)(A) and (B) are implemented.Preamble QuestionsoQuestion 1:.oNo, an additional safety threshold in the POLR rate is not necessary becausethe 12-month lookback sufficiently dampens price volatility. Also, thePOLR rate is not a long-term rate and no residential or small non-residentialcustomer should be on it for more than 60 daysFor the remainder ofthe 2021-2022 POLR term, the risk of customers beingsubj ect to the POLR rate during any further mass transitions should be lowbecause customers willlikely be transferred to VREPs, which offer marketbased month-to-month products that are not the POLR rate.Question 2:'.'.The AOR requirements for indexed retail products are sufficient,particularly if the AOR is included in the EFLs because the EFLs allowcustomers to make informed decisions and compare across REP offerings.Also, products indexed to NYMEX and other sources have significantly lessvolatility than wholesale-indexed products.AORs for pass-throughs of ancillary service prices are not necessarybecause the current rules do not allow these to be passed through on fixedrate products.It is important to distinguish between ancillary service prices and changesin ERCOT' s procurement of ancillary services that introduce additionalcosts. The latter are regulatory changes that should be permissible forrecovery as beyond REPs' control.Product types should only be banned when it has been demonstrated that aban is necessary because prohibitions stifle competition and frequently haveunintended consequences.B.16 TAC § 25.43, Provider of Last Resort1. 16 TAC § 25.43(c)(8), Definition of"Market-based product"The PFP proposes to define a market-based product by matching exactly to a REP' s non-POLR offers for the same customer classes. However, REP customer segmentations may not mapPage 5 of 26

directly to the POLR customer classes (i.e., residential, small non-residential, medium non-residential, and large non-residential).Further, a POLR event creates unique risks and demands on a REP' s operations, and carrieswith it higher bad debt risk than other customer additions to a REP's book. Therefore, a REPshould reasonably be able to factor those elements into its pricing for a market-based productalternative to the formulaic POLR rate. That may mean that there is not a precise match to anexisting in-market product, but if the rate is consistent with the general market rates then thatshould be permissible.Also, while ARM agrees that a month-to-month product cannot include a termination feeor penalty, ARM notes that this requirement is already well-established in 16 TAC § 25.475(b)(7)and therefore need not be repeated in 16 TAC § 25.43(c)(8).Accordingly, ARM recommends the following modifications:(8)Market-based product - A month-to-month product that is either offered to ormatches is consistent with the rates of e other in-market products effefed-*eefornon-POLR customers ef-4he RAP for the same TDU territory and similar customerclass. A month to month contract may not contain a termination fee or penalty.For purposes of this section, a rate for residential customers that is derived byapplying a positive or negative multiplier to the rate described in subsection (in)(2)of this section is not a market-based product.2. 16 TAC § 25.43(f)(1), Customer InformationThe PFP includes the Commission' s POLR rule, 16 TAC § 25.43, for modification.Subsection (f)(1) of the rule contains links to the Standard Terms of Service documents for eachclass of POLR service. If the Commission modifies the POLR rate formula, each of these fourStandard Terms of Service documents will require modification to reflect such changes.Additionally, a sentence within the Standard Terms of Service for Large Non-ResidentialService includes a typo: in the last sentence of Section 1(iv), "RTSPP" should instead refer to"energy charge"(iv)LSP energy charge shall be the appropriate Real-Time Settlement PointPrices (RTSPPs), determined on the basis of 15-minute intervals, for thecustomer multiplied by 125%, multiplied by the level of kWh used. TheRWSPPenergv charge shall have a floor of 7.25 per MWH.3. 16 TAC § 25.43*(1)(E), VREP Customer AllocationsPage 6 of 26

The incentive for a REP to take on the risks associated with being a volunteer POLR REP("VREP") is the possibility that the VREP may be able to competitively retain some customersassigned to it through a POLR event. When there are multiple VREPs, the Commission' s rulesrequire that customers be allocated amongst the VREPs in a non-discriminatory fashion, and basethe allocation on the ratio of the VREP' s indicated willingness-to-serve count relative to that totalfor all VREPs. This invites an inefficient dynamic, however, since a VREP could conceivablyindicate a very large number of customers, which would in effect dilute away the other VREPsfrom that calculation.A simpler and equally non-discriminatory approach that does not carry this risk would beto allocate customers dropped to POLR amongst VREPs equally, up to the VREP's maximumindicated. Conceptually, this is more like a card dealer distributing a deck of cards to the playersat the table. To implement this, the Commission could adopt a change such as the following:(E)Assign ESI IDs in numerical order to VREPs, in the order determined insubparagraph (D) of this paragraph, in accordance with the number ofESI IDs eachVREP indicated a willingness to serve pursuant to subsection (i) of this section. Ifthe number of ESI IDs is less than the total that the VREPs indicated that they arewilling to serve, each VREP must be assigned ayepeF*ieaate an equal number ofESI IDs, as calculated by dividing up to the number that each VREP indicated itwas willing to serve by the total that all VREPs indicated they were willing to serve,multiplying the result by the total number of ESI IDs being transferred to theVREP:, and rounding to a whole number for a given class and POLR area.4. 16 TAC § 25.43(m)(2)(A) and (B), Rates Applicable to POLR ServiceThe PFP proposes a series of amendments to 16 TAC § 25.43(m)(2)(A) and (B) in order todecrease direct pass-through in the POLR rate to the real-time settlement point prices ("RTSPPs")that H.B. 16 has prohibited for residential and small commercial customers. As the Commissionconsiders options to change the POLR rate, it should bear in mind that if the POLR rate is too lowthis will be contrary to the intent of POLR as a short-term rate of last resort and could severelyinterfere with the competitive market in unintended ways.For instance, Public Utility Regulatory Act ("PURA") § 39. 107(g) and 16 TAC§ 25.498(c)(15) cap prices for prepaid products based on the POLR rate. Prepaid plans are avaluable product offering for customers that allow them to actively manage their electricity billand provide an option for those without good credit to avoid a deposit. However, there can beadded risk for REPs in providing prepaid products because of this lack of a deposit and with thePage 7 of 26

possibility of a moratorium on disconnections, particularly for month-to-month products. POLRpricing that is too low may impede REPs' ability to offer prepaid service.It should also be noted that 16 TAC § 25.43(e)(1) requires an LSP to provide service at thePOLR rates defined in subsection (in)(2) upon customer request, even outside of a mass transition.If the POLR rate is lower than market-based offers, this would impact REPs' ability to provideservice through other products that adequately incorporate their costs. This requirement can onlybe sustained if the LSP is able to fully recover the costs and risks associated with providing serviceto such customers upon demand. The existing formula in 16 TAC § 25.43(m)(2) achieves this byallowing POLR rates to reflect completely unhedged service costs through the real-time market.The changes proposed in the PFP radically alter that dynamic, however, by capping the POLRrates in subsection (m)(2) using a formula that is rooted in a prior year's real -time energy costs.This has the risk of creating perverse incentives and material unintended consequences. Forexample, if a very mild weather year precedes a very extreme weather year, then it is quite possiblethat the POLR rate as proposed in the PFP would effectively be "under watef' for at least a fullyear. This dynamic could result in significant, uncontrollable losses for LSPs while hindering theability of non-LSPs to make compelling cost-based offers. This is a problematic dynamic thatmany other retail choice jurisdictions have run into with utility-backstop default service, and a trapthat Texas would be wise to avoid setting for its widely-celebrated competitive retail electricitymarket.Further, there is a significant risk for POLRs in covering loads in mass transitions as theyare acquired quickly on days' notice, and therefore are most likely unhedged. It is important thatthe POLR rate be developed with the understanding that there is a higher risk in serving thesecustomers than customers acquired in the general course of business.ARM offers the followingfeedback regarding the POLR rate with these considerations in mind.First, the definition of "non-bypassable charges" should be expanded to include surchargesother than nodal fees, ancillary service charges, and ancillary service imbalance charges. Thischange should be made for all POLR customer classes (i.e., it is appropriate for 16 TAC§ 25.43(m)(2)(C)(i) as well as for 16 TAC §§ 25.43(m)(2)(A)(i) & (B)(i)). While ERCOT nolonger assesses nodal fees, it is possible that other such fees could be assessed in the future butPage 8 of 26

may not be specifically referred to as "nodal fees."3 Additionally, as highlighted by the recentpassage of H.B. 4492, REPs may be subject to significant unhedgeable uplift costs under certainmarket conditions, including the market conditions likely to give rise to a POLR event, and an LSPshould not be required to bear this kind of incremental exposure without the ability to recover thatcost.Second, the PFP' s proposed amendments to the LSP energy charge component in 16 TAC§§ 25.43(m)(2)(A)(iii) and (B)(iv) would use the average RTSPPs for the customer's load zone,however each TDU territory covers two to three load zones. As drafted, this would result incustomers within the same TDU service territory having different EFLs, which would be confusingto customers as well as to the REP call centers that would need to use load zone maps to explainwhich EFL applies to a customer. To avoid this result, the current rule' s approach should bemaintained by referring to "the load zones located partially or wholly in the customer' s TDUservice territory. " (emphasis added), and to continue the current rule's approach of using thehighest of those load zone averages.Third, the PFP' s proposed pricing formula in subsection 25.43(m)(2)(A) for residentialcustomers is essentially 5% lower than the current formula for minimum prices. The proposedpricing formula for small non-residential customers in § 25.43(m)(2)(B) is equivalent to thecurrent formula for minimum prices. For 2022, these formulas may result in a higher POLR rate,however in subsequent years they may produce a lower rate that would raise the concernsmentioned above. Given the risks inherent to this dynamic, ARM proposes as an alternative that4the LSP customer charge in § 25.43(m)(2)(A)(ii) for residential customers could be set at 0.09per kWh and in (in)(2)(B)(iv) for small non-residential customers at 0.05 per kWh, combinedwith either of the following: The maximum energy charge for both residential and non-residential customerscould be set at a rolling average of the RTSPP for the preceding 60 days with amultiplier of 125%. ARM notes that this would not violate H.B. 16 because it would3 See, e.g., Issue for the ERCOT Board of Directors: Approval by the Board of Directors of ERCOT 20222023 Biennial Budget at 3 (Aug. 10, 2021) ("The Budget recommended by ERCOT staff does not fund the inspectionsrequired by Senate Bill 3 from the system administmtionfee. Those inspection costs will be funded through a vailableat:anhttp:Uwww.ercot.com/content/wcm/key documents lists/214069/9.2 2022-2023 Budget-and Fee.pdf4 ARM continues to evaluate other alternatives and reserves the right to modify or retract either of theserecommendations in reply comments, or lend support to meritorious proposals from other commenters.Page 9 of 26

not directly pass-through RTSPPs and instead smooth out the RTSPP exposure overthe maximum period that a customer could be served on the POLR rate under 16TAC § 25.43(p)(14), striking a more appropriate balance between customer pricerisk and the significant financial risk to LSPs that can accrue during an extrememarket event. For the maximum energy charge, if the average RTSPP in the 30 days precedingthe transition to a POLR rate is at least twice the historical average RTSPP used forcalculating the minimum POLR rate, the LSP energy charge must be the historicalaverage RTSPP multiplied by the number of kWhs the customer used during thatbilling period and further multiplied by the ratio of the preceding 30 days' averageRTSPP to the average RTSPP from the previous 12-month period endingSeptember 1.Fourth, the PFP amends the description of the "number of kWhs the customer used" in 16TAC §§ 25.43(m)(2)(A)(iv) and (B)(v) to state only that it is based on interval data. This wouldbe relevant if the POLR rate was remaining directly indexed to RTSPPs, but given the PFP' sproposal (and ARM's alternative proposal' s) to break that link interval data is no longer anecessary input. ARM recommends that, for the residential and small commercial customersegments, it is more accurate to state that usage information is provided by the TDU, rather thanstating that it is "interval data."Finally, 16 TAC § 25.43(in)(2)(B) currently lumps small and medium non-residentialcustomers together under the same POLR rate formula, however there is no clear reason for doingso. Because H.B. 16's prohibition on products that directly pass through RTSPP does not applyto medium non-residential customers and the same pricing rationale applies to medium nonresidential customers as to large non-residential customers, this POLR rate should be maintainedas is and separated into its own subsection.5. 16 TAC § 25.43(p)(13) and (14), Acceleration of Future-Dated and Post-POLR EventSwitches16 TAC § 25.43(p)(13) aims to give precedence to customer choices over POLR drops,and ARM unequivocally supports that principle. However, that provision also requires that acustomer being dropped to POLR for whom there is a future-dated switch have that switchPage 10 of 26

accelerated to the next available switch date prior to the transition date. 16 TAC § 25.43(p)(14)also establishes monitoring of switch activity for customers that were dropped to POLR andsubsequently switched to a provider of choice, and directs ERCOT to accelerate any switcheswithin that 60-day window as an unprotected, out-of-cycle switch (regardless of how the switchwas submitted).These provisions to accelerate switches before and after a POLR event made sense beforethe ubiquitous deployment of advanced metering systems ("AMS"), which allow for same-dayswitching, and when accelerated switching had substantive costs related to physical meter reading.These constraints are no longer material with AMS. As such, these provisions can now cause moreharm than good by moving the customer over to the REP before the REP is expecting andfinancially prepared to serve that customer. Accordingly, ARM recommends that the automaticmove-up ofthe switch be replaced with giving the recipient REP the option to accelerate the switchdate or proceed with the switch date as originally requested. This way the customer's choice canstill be honored, but so can the REP' s ability to honor the terms of the customer's choice.(13)A mass transition under this section must not override or supersede a switchrequest made by a customer to switch an ESI ID to a new REP of choice, ifthe request was made before a mass transition is initiated. If a switchrequest has been made but is scheduled for any date after the next availableswitch date, the switch must be made on the next available switch date thescheduled recipient REP shall be notified and given the opportunitv toaccelerate the switch date.(14)ERCOT must identify customers who are mass transitioned for a period of60 calendar days. The identification must terminate at the first completedswitch or at the end of the 60-day period, whichever is first. If necessary,ERCOT system changes or new transactions must be implemented no laterthan 14 months from the effective date of this section to communicate thata customer was acquired in a mass transition and is not charged the out-ofcycle meter read pursuant to paragraph (16) of this subsection. *e*he-e,etentpossible, the systems changes should be designed to ensure that the 60 dayperiod following a mass transition, when a customer switches away from aPOLR provider, the switch transaction is processed as an unprotected, outof cycle switch, regardless of how the switch was submitted.Page 11 of 26

6. 16 TAC § 25.43(t), Notice of Transition to POLR Service to CustomersARM suggests that that 16 TAC § 25.43 (t)(1) be amended to acknowledge that ERCOTmay use different messaging for customers transitioned to a VREP, since customers transferred toa VREP in a POLR drop are served on market-based month-to-month rates instead of the POLRrate calculated under 16 TAC § 25.43(in)(2).Additionally, ARM acknowledges the decision to implement a general change to the useof"must" instead of"shall" throughout the Commission' s rules. However, in certain instances itmay make more sense to vary from this change. 16 TAC § 25.43(t)(2)(G) is one such situation inwhich an alternative to "must" would be more correct, such as "will" or "plans to":(G)If applicable, a description of the activities that the REP shdwill use tocollect any outstanding payments.Similar tweaks are also appropriate for 16 TAC § 25.43(t)(3)(A) and (B), as well as 16TAC § 25.43(v),(w)(2)(A), and (w)(2)(B)C.16 TAC §25.471, General Provisions of Customer Protection RulesARM appreciates the Commission's proposed amendments to 16 TAC § 25.471 reflectedin the PFP.Specifying which rules may not be waived rather than referring to "applicableportions" provides certainty and will help to ensure compliance.D.16 TAC § 25.475, Information Disclosures to Customers1. 16 TAC § 25.475(a), ApplicabilityHouse Bill 16 is clear that the new requirements for notices of contract expiration andacknowledgements of risk for wholesale indexed products applies to "enrollment or re-enrollmentof a customer in a retail electric product that is executed on or after the effective date of this Act,"which is September 1, 2021.5However, as currently drafted, the PFP would make contractexpiration notice ("CEN") requirements in § 25.475(e) applicable on September 1 and thereforeapplicable to existing contracts. Because this contradicts the plain language of H.B. 16, ARMrecommends that the applicability of such notice requirements be revised to apply only to contractsexecuted on or after September 1.5 See Tex, H.B. 16, 87th Leg., R.S., Sections 2 and 3 (2021)Page 12 of 26

Furthermore, as noted in ARM' s Response to the Strawman, REPs will need time todevelop and modify the processes and operational systems required to implement this rulemaking.6ARM acknowledges that the specific requirements of H.B. 16 will become effective for contractsexecuted on or after September 1, however to the extent that the Commission chooses to includeadditional requirements for REPs, ARM requests t

Maximum Rate for Prepaid Service Rule - § 25.498 o § 25.498(c)(15): Modifications may be required to tests for establishing whether . prepaid product is compliant with requirement that it be priced no greater than the . POLR rate if Commission's changes in § 25.43(m)(2)(A) and