The first half of the year was an exciting time for the Clean Power Alliance. The infant customer choice aggregator (CCA) was establishing itself as a major presence in Southern California’s utility industry, commencing service to–and hoping to make a good first impression on–nearly 900,000 former residential customers of Southern California Edison. The successful expansion was the result of months, even years, of work, a detailed implementation plan and a marketing strategy that promised choices for a range of better-priced, cleaner renewable energy products.
Where billing is concerned, it promised, CPA “strives to keep it simple.” You’d get a monthly statement from Edison showing: 1) Edison’s charges for delivering electricity, and 2) CPA’s charges for the energy itself.
But before May was out, the Alliance began receiving complaints from customers about delayed bills or bills with missing data, such as the SCE charges. CPA didn’t know if it was a “one off” problem or something systematic.
Customers who called swallowed hard as they psyched up for a round of institutional shuffling among call centers, this time between SCE and CPA while representatives were in the dark about what was happening or what to tell callers.
Most serious, CPA Executive Director Bardacke told board members July 18, were calls from customers for whom “this was their first introduction to the fact they were CPA customers,” because they had not been monitoring notices or previous statements. Not all were satisfied and as a result, there was “not a significant, but a noticeable uptick in opt outs.” And while representatives were able to retain most customers, a few, looking for some kind of relief, elected to “opt down” to lower levels of renewable energy service.
“Not a waterfall,” Bardacke said, “but we’re noticing.”
It wasn’t the first time SCE’s billing system cracked. Late last year there was an incorrect under-collection on some bills, and while a portion of that problem was resolved, by May there were also 66,000 customers who hadn’t received a special credit.
A sense of exasperation was likely amplified because, separately but simultaneously, customers have been trying to make sense of a dizzying series of rate increases and decreases CPA has made in recent months due to its decision to index its rate structure to Edison’s.
Meantime, the organization began to notice another trend: cash deposits from Edison for bill payments were coming in lower than expected. Within weeks, the slow-down in cash flow swelled to $7 million, forcing CPA to tap its credit line.
In late May, Edison finally called, saying it was aware of problems in its IT billing system, was working to figure out exactly what happened and to fix it. It emerged that the problem affected not only 100,000 CPA customers, but thousands of other CCA customers in Edison’s service territory as well. These are: Lancaster Choice Energy, San Jacinto Power, Apple Valley Choice Energy, Rancho Mirage Energy Authority and Pico Rivera Innovative Municipal Energy.
Bardacke said it took Edison a long time to isolate the problem, but when it did, it fixed it quickly. Only this week, over two months since the problem began, Edison said the matter was resolved. Indeed, he added, billing deposits are rising back up and there are no longer bills going out with missing charges.
But the ramifications continue. For one thing, new bills will have appropriate adjustments for missed charges. There will be no late penalties and Edison will offer customers with larger bills options for payment plans—something CPA cannot do. CPA is communicating with customers every way it can think of, but is getting limited cooperation from Edison, which Bardacke said refused to send a letter to customers.
In an email, Edison spokesman Robert Laffoon-Villegas told the South Pasadenan News the May 1 transition was the largest CCA transition ever implemented and that it was “expected [to] and did challenge SCE’s ability to implement.” He acknowledged there were “some billing issues” but asserted there were “no concerns around bill accuracy.”
“SCE has been working collaboratively with CPA and their contractors in particular on a recovery plan. SCE supports customer choice and is working hard to resolve any issues as quickly as possible.”
CPA encouraged customers with billing questions to call SCE’s call center at 800-655-4555.
As for what recourse CPA may have, Bardacke was not encouraging. CPA could file a complaint with the California Public Utilities Commission (which regulates Edison but not CPA), but it could take a year and be costly. Moreover, the best outcome would be a fine payable not to CPA, but to the commission. The CPA could take a successful CPUC ruling to court and seek a damage claim. “So, there is always a possibility, but you wouldn’t do it for purely financial reasons,” he said.
Edison’s’ Laffoon-Villegas did not address a question about prospective compensation to CPA for loss of goodwill, revenue, administrative or borrowing costs. CPA did not have an estimate for its losses.
CPA chair Diana Mahmud, a South Pasadena city councilmember, advised her counterparts on the board to address citizens in their respective communities and to keep their communications and government relations people in the loop. To the latter, she said she forwarded emails she’d received from residents “suggesting that perhaps this was part of some sort of devious intent by Edison to make the CPA look bad. I thought it was important that Edison get that message.”
Mahmud added that not all problems may be solved. One CPA customer who signed up for electronic billing and payment was having money withdrawn by Edison but had still not seen a bill. More ominously, she warned Edison is planning next April to completely replace its billing system. “So our problems with Edison–they just take a siesta and return with a vengeance next year.”
CPA staff also discussed a problem with SCE’s billing system that prevents bills from listing CPA on the top summary page, meaning customers don’t know CPA is involved unless they look at the back page. Board members were not pleased to hear that, when SCE puts its new billing system in place next year, that problem is not slated to be resolved.