Nueces Electric Co-op & Competitive Retailer Billing Processes

1. Nueces Electric Co-op & Competitive Retailer Billing Processes April 8, 2005

2. Information Disclosure Issue • In proposed 25.475, Information Disclosures, REPs are required to disclose all material terms of arrangement with the customer; however, for consolidated billing, the REPs need to have NEC DSP’s billing and collection practices to comply with 25.475. • The NEC DSP billing and collection practices are already defined and it is the purpose of this meeting to help REP operations personnel to understand those procedures and processes that remain unclear.

3. Agenda • Member/Customer Billing Options in NEC DSP Area • The Consolidated Bill Format • Overview of Consolidated Billing Process • NEC Billing Cycles & Bill Ready Information for CRs • Meter Usage & Invoices • Estimated Meter Reads & Invoices • Continuous Service Agreements (CSAs) • Clarification of CPR 25.480 • Cancel/ Re-bill Process • Account Numbers & Account Balances • Consolidated Payment Remittance to CRs • Operational Issue- LOAs • Off-Cycle Switches & Drops • TX SET Changes

4. Customer Billing Options • NEC allowed to bill members directly for NEC DSP services (PURA § 41.057) • NEC TDSP consumers have TWO options for billing • 1- members can choose to receive two (2) bills – one from NEC and one from the CR • 2- members can choose to receive one (1) bill – SENT BY NEC • If no preference expressed, or CR chooses to not inform members about option, “default” is single bill sent by NEC (option 2) • Consumption/ billing information must be retained by NEC to allow allocation & return of capital credits to members (determined in proportion to their use)

5. Consolidated Bill Format • Energy charges on bill are bundled as in current market • Non-energy fees will be itemized (NEC DSP & CR) • CR logo is allowed but will be in black or blue.

6. Consolidated Bill Format Q -In proposed 25.479, Issuance and Format of Bills, it is not clear what rules apply if NEC DSP is doing the billing. Current rules are written to impose requirements on the REP. There is no discussion of how the REP’s charges will be shown on the bill. A-NEC’s consolidated bill is designed to meet all requirements for REP bills, as stated in 25.479.

7. Consolidated Bill Issue • REPs are given a one-line brand/logo reference with associated billing determinants for the energy portion of the bill. • NEC has developed and approved a format for a consolidated bill. NEC has provided a sample bill to CRs, on request. • If any CR would like to recommend a different consolidated bill format, it may submit a letter (containing a sample recommended format, along with an itemization of the CR’s recommended changes and justification for each change) to NEC’s management and board of directors for consideration.

8. Transaction flow for Enrollment through First Consolidated Billing with NEC • Consumer enrolls with CR & CR accepts consumer • CR sends 814_01 to ERCOT • ERCOT sends 814_03 to TDSP • TDSP responds with a 814_04 Same day or Next day (depending on when the 814_03 was received and the Inbound and outbound process were ran). • When the account is made active TDSP will send 867_04 and 814_20 and spreadsheet with discretionary charges • When the Bill-Calc is ran for this account’s cycle. An 867_03 will be sent. • The CR will have three days to get the 810_03 back to the TDSP. • On the afternoon of the third day the TDSP will run the Interactive bill print and send out the current month’s billed charges for both the TDSP and the CR (as long as the TDSP has received the 810_03 from the CR) If the CR does not make the deadline CR charges will have to wait until next months bill to be sent. • When the Payment is made (to make the TDSP whole first), then the rest will apply to the CR. • Once the CR type service has money applied to the account, it will be sent out to the CR as an 820_03 “Remittance Advice only”. • Co-op will then cut a check for this amount to the CR. 

9. Transaction flow for Enrollment through First Consolidated Billing with NEC 1 CR 11 10 4 7 Consumer 8 9 6 2 5 3 4 NEC DSP 5 ERCOT 6

10. NEC Billing Cycles & Bill Ready Information from CRs • NEC reads meters in coincidence with billing cycles (see 2005 NEC bill cycles on website) • NEC forwards all kWh usage per cycle to CR (867_03) • CRs reply within 3 days with invoices (810_03) • NEC mails bill to customer by next business day after receiving invoice from CR • Bill due date is 16 days from the mail date

11. NEC Billing Cycles • NEC has 5 cycles – 2005 calendar is on website at http://www.nueceselectric.org/billing.htm • CR will know the NEC bill cycle by the 814_04.

12. Meter Usage & Invoicing • In the 867_03, meter usage, NEC will send a date and time of when the REP must provide NEC DSP with REP’s 810_03 to insure that it will be on the customer’s bill. What is the timeframe from when the REP receives the 867_03 from NEC DSP to when the REP must get the 810_03 to NEC DSP? Is there an established timeframe? • The timeframe is 5 days. • Currently, Protocols dictate that the TDSP has 3 days from the day that the meter was read to get the meter read to ERCOT. ERCOT then has 4 hours to get the meter read to the REP. Based on the time that a REP has to send the 810_03 to NEC DSP, what if there is a delay in the REP receiving the meter read and the REP does not believe that the allotted time was given to them? Can the REP reject the 867_03 with an 824? Will NEC DSP allow the REP to send it late? How would the REP notify NEC DSP of these situations? • If the CR knows that there will be a time delay a phone call should be made to NEC CR Relations (Eloise or Dave).

13. Meter Usage & Invoicing • Will NEC DSP ever hold the REP’s transactions until the next month if the REP misses the date transmitted in the 867_03? • Transactions are processed and if the bill window is missed the REP’s bill information will be reflected on the next month’s bill. • In the 810_03 it states: Any cancel/re-bill invoices received after the bill window will be reflected as an adjustment on the customer’s bill for the next month. This statement is in the current and future implementation guides. • TDSP will send a corrected bill to member if error detected immediately after billing, otherwise cancel rebill will be reflected as an adjustment on the next month’s bill

14. Meter Usage & Invoicing • If the REP receives the 867_03 usage and it is rejected with an 824, are there any timelines around when the REP will receive a new 867_03? Is the customer’s bill held up until we receive a valid 867_03? • The timeline is 3 days. There is a possibility that the bill could go out incorrectly, but a corrected bill will be sent out as soon as the cancel rebill is received from the CR. • The current 810_03 states that: After a final 867_03 and a final 810_03, a REP may discover that late payment charges apply to a customer. Therefore, the REP may submit another 810_03 to the MC TDSP for these late charges. Currently in the 2.0a TX SET release, there is no way for a REP to send an invoice after the REP has sent a final to the Co-op. How will this transactional need be accommodated by NEC DSP until 2.1 is implemented? • Yes, the CR will be able to send additional charges after the final 810.03. • In 2.1, the 820_03 allows for the Muni/Co-op to be able to send a debit to the REP for instances when a customer’s funds were not available. How is this going to be handled until the 2.1 changes come in? • The co-op is able to send a debit payment now. The only change in 2.1 is that we are adding code to let the CR know what the debit payment is for.

15. Estimated Meter Readings & Invoicing • Will NEC DSP denote on the read transition whether the read is estimated? • Yes • Does NEC DSP have any rules that limit number of consecutive estimated reads that customers may receive? • Yes, after three estimated readings NEC obtains a reading. • If the REP has a technical issue, or for some reason the usage is not received by the REP; however, the REP knows that an invoice needs to be sent, can the REP estimate the customer’s usage and send an 810_03? How will the REP inform NEC DSP of any estimated invoice? • CRs cannot estimate usage. Contact CR Relations in the event of technical issues that prevent receiving usage.

16. Continuous Service Accounts • Since the 814_18, to establish a CSA, is not passed from ERCOT to the Muni/Co-op until 2.1, NEC DSP will not know the CSA’s REP billing type or the REP’s account number. • ERCOT passes the billing type to NEC DSP on an 814_03. • The REP’s account number is required on the 820_03, remittance. The billing type is required to insure that NEC DSP knows if the REP is going to be sending a bill to them or not. • NEC DSP gets the CR account # on the 810_03 and holds until the 820_03 is sent back to CR. • What procedures does NEC DSP have in place to accommodate CSAs until the implementation of TX SET 2.1? • We have the service location marked to notify owner of a move-out. Which we translate to mean a CSA exists and account is returned to owners name.

17. Clarification of CPR 25.480 • In proposed 25.480, Bill Payment and Adjustments, it is not clear what payment rules apply if NEC DSP is doing the billing. For example, will the DSP assess a late fee on behalf of the REP? • YES • What happens if there is an over or underbilling as a result of an error on the part of the DSP? • At the time the error is identified, NEC DSP will implement the cancel rebill process. • If the customer doesn’t pay the DSP, who can order disconnection for non-payment? Can the DSP agree to payment arrangements on behalf of the REP? . • NEC DSP orders DNPs for wires charges. NEC DSP will not make payment arrangements on behalf of the REP.

18. Cancel/ Re-bill Process • Error is detected • TDSP sends 867_03 cancel usage via EDI to CR • CR sends TDSP cancel rebill invoice • TDSP will send a corrected bill to member (if error detected immediately after billing, otherwise cancel rebill will be reflected as an adjustment on the next month’s bill)

19. Account Numbers & Account Balances • Account Number • In the 810_03, it states that the REP is required to send its customer’s account number in the invoice transaction. Does NEC keep up with this, or do they print this on the customer’s bill? • No, NEC does not print REP’s account no. on the bill. • This requirement is removed for 2.1, future implementation. Do the REPs still need to send their customer’s account number until that time? • Yes. • In the 820_03, it indicates that the REP’s account number is sent from NEC to the REP. What procedures does NEC have in place to capture and maintain this account number from when the REP sends it to NEC on the enrollment transactions? • While we have the capability to do this, at this time, we are not capturing the account no. on the enrollment. • Account Balances • Will NEC be maintaining the REPs’ account balances, or will the REPs need to send the current and previous balances every month? • Yes, NEC will maintain the REP’s account balances and will be reflected on the customer’s next month’s bill as “balance forward.”

20. Consolidated Payment Remittance Issues • The REPs need for NEC to provide a detailed, end-to-end walk through and documentation for the customer payment and remittance process. Detailed communication processes need to be developed to address the various scenarios related to customer payments to NEC DSP – such as partial payments, and how NEC DSP will communicate with the REP, and how payment issues will be resolved related to disconnect/reconnect. • How many days from when the customer pays does NEC DSP have to send payment to the REP? • On the 820_03, remittance advice, there are no dates, invoice numbers or customer information. When the REP talks to a customer about payment, the REP will have no view or information about this. The REP will have no dates, check numbers or amounts for use in talking with the customer. What procedures does NEC DSP have in place to address these issues?

21. Payment Options for Customers With Consolidated Billing • Cashiers available in main office in Robstown with drive thru lane, and cashier available at the Ricardo Service Center during regular business hours- accept cash, checks, money orders. • 24 hour payment drop box available outside main office in Robstown and outside Ricardo Service Center. • Mail – picked up at daily in the Robstown Post Office (Monday-Friday) and payments post thru the remittance machine. • BillMatrix Corporation– telephone and electronic check/debit card, credit card or internet. $4.95 per transaction fee charged to member. Phone payments (800-232-8190) or Internet payments (www.nueceselectric.org). Payment notification sent via e-mail to CR when posted. • Pay stations – nineteen area pay stations. $1.00 per transaction fee charged to member and payment notification is not posted for two (2) business days. • Bank drafting service is available. • Level Billing – member should contact NEC (NEC DSP must have 12 months of history with member at the premise)

22. Consolidated Payment Remittance • Regular Payment Process: • When payment is received the coop portion is paid first and balance is applied to CR/REP portion of bill. • Remittance advisory (820_03) will be sent to CR/REP twice daily. • Check will be remitted weekly each Monday or if holiday the next business day to CR/REP with corresponding remittance Tran Trace number (820_03). • Credit balances left after the CR/REP is paid will be retained by NEC DSP and applied to the next bill. • Returned checks: • The CR/REP will be notified thru a 820_03 and these payments will be debited for the amount of the returned check. No fees will be charged to the CR/REP by NEC. • When the member makes good on the returned check the CR/REP will be notified by 820_03 and money will be credited on that week’s payment.

23. Consolidated Payment Remittance • Payments on disconnect/reconnect: • Payment must be in full including any disconnect/reconnect fee charged by DSP to the member. • Remittance (820_03) will be sent to CR/REP twice daily and payment by check will be remitted to CR/REP weekly, each Monday or if holiday the next business day, with corresponding remittance Tran Trace number (820_03). • Reconnect (650_01 or 650_04) should be sent by DSP or CR/REP. Reconnect (650_01) submitted by the CR/REP can be rejected (650_02) by the DSP if member has not paid the funds due the DSP. • Refer to DNP Guide for emergency reconnect.

24. Consolidated Payment Remittance • Dual Bill - Account has been disconnected either by the DSP or CR/REP using disconnect (650_04 or 650_01). • DSP initiated (650_04) – • Cooperative confirms member’s satisfactory correction of reason for disconnect and releases reconnect request to FSR to be completed. • Payment must be made in the business office during regular business hours or thru Bill Matrix (payments can be confirmed by telephone). • Payment must be in full including any disconnect/reconnect fee charged to the member before a reconnect request can be released to FSR for completion. • Cooperative will submit reconnect (650_04) according to TX SET guidelines. • CR/REP initiated (650_01) – • Cooperative validates in accordance to the DNP Guidelines and an internal service order is routed and scheduled geographically to the appropriate FSR. • Cooperative completes order and responds to CR/REP with a 650_02 in according with the DNP Guidelines. • CR/REP confirms customer’s satisfactory correction of reasons for disconnect and submits reconnect (650_01). • Cooperative receives reconnect (650.01) and performs validations including making sure that all funds have been paid to the DSP before a service order will be released to FSR for completion. • If validation is not complete a reject (650_02) with the appropriate code and reason is sent to CR. • Upon successfully validating the reconnect (650_01), an internal service order is routed and schedule to the appropriate FSR. • Cooperative completes order and responds to CR with a (650_02) within one business day of completion.

25. LOAs • The current LOA process is outlined in the Retail Market Guide (RMG). Will NEC be updating this information? • No plans exist at this time to update the information. • Will NEC use the current process that is lined out in the RMG for LOA information? • Yes, however, NEC will also reject the request if neither our member on record for the ESI ID, nor their spouse, is the signature on the historical usage request. • When may a REP begin sending LOA forms, and where should they be sent? • LOA submission may begin concurrently with the release of the mass customer list to CRs. This will be approximately 2 weeks after the pending approval of PUCT Docket #30633 and thirty days before the first phase of the transition of customers into competition. Requests should be e-mailed to NEC.

26. Off Cycle Switches & Drops • When a REP sends an off-cycle switch, or off-cycle drop, will NEC DSP send that charge to the customer? • No, the CR will include the applicable charges on its bill-ready invoice and NEC will send a paper invoice to the CR for the fee. • If the customer does not agree with this charge, will NEC DSP allow the customer to dispute this charge with them and credit the customer for this charge? • No. Since NEC will not be involved in the customer’s request for the switch or the REP’s decision to drop the customer, the CR will handle any billing issues regarding these charges with the customers.

27. New TX SET Changes • There are 49 new TX SET draft requirements for entities participating in an MOU/EC territory. These will be implemented in the next version of TX SET 2.1, which is currently scheduled for the Dec. 2005 timeframe. Implementation of these requirements is critical to provide for an efficient market and positive customer experience. • Yes there are 48 changes, however only 11 of them are MOU/EC specific. We agree that these changes must be implemented. However, work-arounds are in place for all of these issues at this time. All NEC DSP and ERCOT systems are operational for CRs to successfully operate in the NEC territory today.

28. ADDITIONAL QUESTIONS/ DISCUSSION