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RMS Update on Amended POLR Process

August 29, 2002

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Retail Market Update

Topics– Amended POLR Rule Summary

– Ruling Details

– Implementation Timeline for 814_10, 814_14, 814_15, and workaround

– TDSP recognition of switch vs. Drop

– Recommendation to RMS

– Vote

– Next Steps

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Amended POLR Rule Summary

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Current process

• Customers dropped to Provider of Last Resort (POLR) by all REPs using 814_10– Non-Pay

– End of Contract

– REP Default

• ERCOT processes 814_10 and sends 814_14 to POLR

• ERCOT sends postcard to customer

• Customer stays with POLR until they are switched away by another REP or the POLR disconnects them.

• Only POLR can disconnect for non-pay

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Amended process

• CREPs will continue to use the 814_10 for non-pay drops, but will use a new process for end-of-contract and REP default.

• ERCOT will process the 814_10 and sends 814_14 to the AREP

• ERCOT will send postcard to customer

• For end-of-contract and REP default, the POLR will initiate a switch (814_01). – This switch will contain the customer protection waiver so the customer

cannot rescind the switch.

• Under the new process, the AREPs and POLRs will be able to disconnect for non-pay.

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Ruling Customer Migration Summary

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Two Options for Customer Migration

Both Options would involve the CREPs to begin dropping customers to AREPs instead of POLRs on 9/24.  The method would be a workaround until the final permanent process could be implemented.  Both methods would also allow the AREPs to begin disconnecting for non-pay on 9/24. 

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Two Options for Customer Migration (cont.)

Option 1 would involve transferring all POLR customers to the affiliated REP except those customers that have affirmatively requested service from another competitive provider, the incoming POLR, or the outgoing POLR.  The customer could affirmatively choose service from a competitive affiliate of the POLR at a price specified by the competitive affiliate.  The transition of non-choosing customers back to the affiliated REP would occur between November 14 and December 31, 2002. 

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Two Options for Customer Migration (cont.)

Option 2, would allow a competitive affiliate of the POLR continue to serve a POLR customer after the end of the POLR term at a rate specified by the competitive affiliate, unless the customer chose to switch to another provider or receive service from the incoming POLR. 

• The Commission chose option 2.

• Coordinated migration not required, POLR and their Competitive Affiliates will implement switch process

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Implementation Timeline for 814_10, 814_14, 814_15, and workaround

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Implementation Timeline

PUCT POLR Ruling Adopted

RMS votes on permanent TDSP recognition of switch vs. Drop solution

A. AREPs begin disconnecting for non-pay

B. CREPs begin use of workaround for non-pay drops

C. POLRs begin initiating switches for customers being dropped for end of contract and REP default

Permanent solution for ‘B’ implemented

August 22, 2002

August 29, 2002

September 24, 2002

TBD

 

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TDSP recognition of Switch vs. Drop

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TDSP recognition of switch vs. Drop

• Six possible solutions– Pros

– Cons

• Dispositions

• Handling off-cycle Drops

• Rank by Opposition

• Rank by Implementation Timeline

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TDSP recognition of switch vs. Drop (cont.)

The New Segment Solution – This solution involves adding a new segment to the 814_03 that would be populated by

ERCOT only when the 814_03 is generated from an 814_10. This segment would be an address segment (N1) and would contain information about the losing REP. This is probably the ‘Right Solution’ but can’t be achieved within the timeline.

Pros:– No additional requirements for the CREPs or AREPs.

– Provides the information in a consistent format that does not leave room for mis-assumptions.

Cons:– Most likely would take 18 months to implement; requires Tx SET Change, version 1.5 is

locked to major changes, so this would go on version 1.6 which is slated for production implementation in late 2003 or early 2004.

– Major change for ERCOT

– Major change for TDSPs

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TDSP recognition of switch vs. Drop (cont.)

The Original Transaction Id Solution – This solution would require that the CREPs use a consistent naming convention on the

Original Transactions id (BGN02) that would identify the transaction as a POLR. (i.e. end the BGN02 with ‘PLR’)

Pros:– No change for ERCOT or AREPs– No change to Tx SET

Cons:– Major change for TDSPs– Major change for CREPs– May cause problems at CREPs with tracking, the length of the field and content for sorting,

etc. make it more difficult to manage.

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TDSP recognition of switch vs. Drop (cont.)

The DUNS Solution– This solution would make it necessary for the Affiliate REPs to establish a new DUNS (or

new DUNS extension) at ERCOT for use when they receive a drop. ERCOT would use this DUNS on the outbound 814_03 instead of the current DUNS for the Affiliate REP.

Pros:– This would allow the TDSPs to continue to recognize Drops from Switches by the DUNS

number.

– No additional requirements for TDSP or CREPs.

– Small additional effort for ERCOT

– No change to Tx SET

Cons:– The additional effort for the AREPs may push out the timeline.

– Potentially causes problems in the AREPs billing systems.

– It could be argued that this is contrary to the spirit of the POLR ruling because the AREP is not suppose to treat these customers any different from their other customers.

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TDSP recognition of switch vs. Drop (cont.)

The LIN Solution – This solution involves adding a new code to the LIN segment on the 814_03 that would be

populated by ERCOT only when the 814_03 is generated from an 814_10 or that would be sent in on the 814_10 and passed through to the 814_03 and 814_11 (depending on what TX SET decides). This code would be an indicator that the initiating transaction was a Drop to Affiliate REP.

Pros:– No additional requirements for the CREPs or AREPs.

Cons:– Major change for ERCOT– Major change for TDSPs– Adds requirements to TX SET version 1.5

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TDSP recognition of switch vs. Drop (cont.)

The ‘No Change’ Solution – This solution would result in the TDSPs not being able to identify a Drop from a switch.

The implications would be that either the CREPs would have to agree not to drop off-cycle, the AREPs would have to agree to assume the tariffs when they are, or the AREPs would use the dispute process to get the charges reverted to the dropping REP. The TDSPs would have to change their logic to watch for 2 switches on the same ESI ID, assume one is a Drop, to begin concurrent processing if they are not using that logic already.

Pros:– No Change for CREPs, AREPs or ERCOT

– No change to Tx SET

– Allows the 814_03 to work the way it was intended.

Cons:– This option does not give the TDSP the information necessary to bill the correct REP for

any charges associated with off-cycle meter reads.

– Major change for TDSPs if they were using the DUNS to initiate concurrent processing.

– May prohibit off-cycle drops or cause AREPs to assume un-warranted charges.

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TDSP recognition of switch vs. Drop (cont.)

The ‘Permanent Workaround’ Solution – This solution would involve using the ‘workaround’ until the CREPs are allowed to

disconnect for non-pay. This workaround involves the CREP sending the appropriate information in an agreed upon format to the AREP allowing the AREP to submit a waived switch.

Pros:– No Change for TDSPs, ERCOT, AREPs, or CREPs– Not imposing code changes for something that is only needed for 23 months.– The AREPs would not have to modify their systems to accept the 814_14 transaction and

generate the 814_15 transaction.– No Market Test Flight– No TX SET Changes

Cons:– Workarounds can be time consuming, expensive, and error-prone– Workarounds are prone to causing synchronization problems– Customers do not get their ‘POLR Postcard’ from ERCOT

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TDSP recognition of switch vs. Drop (cont.)

Dispositions• The New Segment Solution

– Eliminated due to Implementation Timeline

• The Original Transaction Id Solution– Eliminated due to manageability issues

• The DUNS Solution– Included in survey

• The LIN Solution– Included in survey

• The ‘No Change’ Solution– Included in survey

• The ‘Permanent Workaround’ Solution– Included in survey

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TDSP recognition of switch vs. Drop (cont.)

Handling off-cycle Drops

The ‘No Change’ and ‘Permanent Workaround’ solutions have another inherent problem. They do not give the TDSP the information necessary to bill the correct REP for charges associated with off-cycle reads. There have been three suggestions for solving this.

1. AREPs assume the charges for the off-cycle drops

2. CREPs only drop on-cycle

3. AREPs use the dispute method of reversing the charges

All three suggestions are problematic

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TDSP recognition of switch vs. Drop (cont.)

Survey Results

Rank by Opposition

Solution Does Not Oppose/Opposes

‘LIN’ Solution 16/0

‘No Change’ Solution 14/2

‘Permanent Workaround’ Solution 12/4

‘DUNS’ Solution 12/4

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TDSP recognition of switch vs. Drop (cont.)

Survey Results

Rank by Implementation Timeline

Solution Latest Implementation Date

‘Permanent Workaround’ 11/14/2002

‘LIN’ Solution 4/1/2003

‘DUNS’ Solution 4/1/2003

‘No Change’ Solution Sometime after 4/1/2003

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Recommendation to RMS

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Recommendation to RMS

The ‘LIN’ SolutionIt is the recommendation of ERCOT and supported by several market participants involved with the amended POLR process that RMS adopt the ‘LIN’ solution to solve the problem of the TDSP recognition of switch vs. Drop issue.– Most Favorable Responses to survey– Reasonable implementation timeline– Consistent with other TX SET Transactions– Consistent with other business practices– No problem with off-cycle drops

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Questions?

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RMS Vote

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Next Steps

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Next Steps

• PRR already approved on urgent timeline

• Texas SET changes to implementation guides (9/3-9/4, 2002)

• TTPT approval of additional scripts

• AREPs and CREPs need to agree on format for workaround

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Thank-you