2014 EAP Consumer Services Conference

1. Mary Beth O’Hara Osborne Director of Regulatory Affairs Sept. 17, 2014 2014 EAP Consumer Services Conference

2. About the PUC • $68 + million budget for the 2014-15 FY • Funded by assessments on utilities, not PA tax dollars; however some federal funding reimbursements do exist • Regulates nearly 8,000 entities • Created by General Assembly in 1937 • Duties given by statute – Public Utility Code, Title 66, Pa. Consolidated Statutes

3. Our Office Locations • We have about 500 employees at the PUC, who are based in Harrisburg, but have regional offices in Philadelphia, Pittsburgh and Scranton

4. Purpose of PUC • Original Purpose: to protect consumers from monopolies • Imposing unreasonably high rates, or • Providing inadequate service • Safety was and is of primary importance • Changes in the laws over the last nearly 20 years have placed PUC in the role of overseeing competition in marketplace

5. PUC Organizational Chart (prior to November 2013)

6. PUC Organizational Chart (current)

7. Office of Competitive Market Oversight • The Office of Competitive Market Oversight (OCMO) has recently become a Bureau within the Executive Director’s Office • OCMO is headed by Kirk House and Dan Mumford

8. Director of Regulatory Affairs The Director of Regulatory Affairs Oversees 262 positions in the following Bureaus: • Technical Utility Services • Bureau of Audits • Bureau of Consumer Services • Office of Administrative Law Judge • Office of Special Assistants

9. Technical Utility Services • Serves as the principal technical advisory bureau regarding fixed utility and transportation regulatory matters • Advises on technical issues for electric, natural gas, water/wastewater and telecommunications • Offers policy recommendations on rates, tariffs, regulatory matters, applications processes and emergency operations

10. Bureau of Audits • Performs financial, management, operational and specialized audits of regulated utility companies • Reviews adjustment clause rate filings and 1307(e) reconciliation statements • Provides recommendations to refund over-collected costs and to improve accounting and operational procedures to save utilities, consumer money

11. Bureau of Consumer Services • Responds to and investigates informal complaints from residential and small commercial customers made against regulated utility companies and, in some instances, electric and gas supply companies • Serves as intermediary between utilities and consumers to: • Resolve complaints • Develop payment arrangements • Provide utility-related information • Monitor utility compliance with PUC regulations

12. Office of Administrative Law Judge • Fulfills a judicial role by hearing cases, mediating cases through alternative dispute resolution process and issuing decisions • Provides fair and prompt resolution of contested proceedings, including consumer complaints, rate filings, investigations, billing disputes and applications

13. Office of Special Assistants • Serves as an advisory support bureau • Provides legal and technical advice primarily regarding challenges to ALJ decisions and policy issues • Drafts opinions and orders for consideration at Public Meetings disposing of Exceptions filed in response to OALJ decisions and also, pursuant to motions adopted at Public Meeting • Reviews petitions for relief

14. Goals & Priorities • Strategic Planning • Succession planning • Management Structure • Streamlining/Efficiencies • Reducing caseload in a timely manner without sacrificing quality work • Aligning Goals and Objectives • Facilitating collaboration and communication between and among Bureaus and Offices to handle work well

15. Challenges • Managing the increased workload of Bureau of Consumer Services, Secretary’s Bureau, Office of Administrative Law Judge and potentially Office of Special Assistants, with budget challenges • Causes of Workload Increase • Polar Vortex • Variable Rates • Budget Challenges • Operating under zero growth budget and a projected shortfall due to increased labor costs, federal funding reimbursements which are flat-lined at decades-old levels

16. Variable Rates Issues • Winter 2014 • Higher prices in wholesale market = higher prices for customers with variable-rate contracts (uplift charges) with competitive suppliers and fixed-rate customers whose contracts expired • This led to significantly higher call and intake volume (30% - 40%).

17. Variable Rates Issues, cont. • Case and Call Volume • In 2014 (through 9/16/2014) BCS has taken in 65,000 cases to investigate as compared with 70,410 for the entire year of 2013. • Of these 65,000 cases, close to 10,000 have been variable rate, supplier, or general competition and contract related as compared with approximately 2,100 cases for the entire year of 2013.

18. Variable Rates Issues, cont. • It is hoped that cases can be resolved to the customer’s satisfaction at the BCS and company level • To facilitate case closures, BCS is working with companies to develop an Informal Complaint Resolution Program (more on this later)

19. Variable Rates Issues, cont. • Decisions to informal complaints are mailed to the Complainant by BCS along with an “Intent to Appeal” form.  • If the Complainant timely sends this to the Secretary, the Secretary’s  Bureau then sends out a formal complaint form, and the complainant has 20 days to file a formal complaint appealing the BCS decision.  This is a requirement of 52 Pa. Code Section 56.172. • In FY 2013-14, the Secretary’s Bureau received 700 formal EGS-related complaints

20. Case Management • For Fiscal Year 2013-14, OALJ had approximately 3,000 active cases/assignments • While ALJs make decisions based solely upon the record, the written product is subject to quality review • All Initial Decisions and Recommended Decisions are reviewed for legal and technical sufficiency before issuance

21. Case Management, cont. • Decisions are then served by the Secretary’s Bureau on all parties of record • Internal and statutory deadlines control the timing of many decisions by an ALJ • A party may challenge the ALJ’s decision by filing Exceptions, which are then handled by the OSA which prepares an Order for consideration by the Commission at Public Meeting

22. “Pig in a Python”

23. Informal Complaint Filed by Consumer Against Utility Company Utility/ consumer can appeal BCS decision through formal complaint process BCS investigator rules on complaint BCS initiates complaint; notifies utility Utility response (30 days) Consumer calls BCS BCS accepts as inquiry (no criteria for complaint, however, contact with BCS is recorded)

24. Formal Complaint Filed by Consumer Against Utility Company Bureau of Investigation & Enforcement intervenes in case Secretary’s Bureau assigns it to the OALJ Hearings are held and OALJ issues decision Secretary’s Bureau receives filing OSA drafts Order for Commission to vote on at Public Meeting Secretary assigns it to Office of Special Assistants Exceptions are filed with Secretary Secretary’s Bureau issues order Commission adopts OSA’s draft order

25. Pre-Warm Transfer Initiative/Informal Complaint Resolution • Targeted major gas/electric utilities with highest case volume, but all companies other than suppliers may participate • Upon a case being opened by BCS intake staff, the utility is notified electronically within 15-30 minutes via existing BCS Data Exchange Process

26. Pre-Warm Transfer Initiative/Informal Complaint Resolution, cont. • The company contacts the complainant in an effort to resolve the issue: • No restrictions. Company chooses which cases to contact • When BCS has the phone and software capability to support the function, the companies may choose to transition to a warm transfer via phone rather than calling the complainant after the case opening

27. Pre-Warm Transfer Initiative/Informal Complaint Resolution, cont. • BCS receives confirmation from the complainant that the matter is resolved to his/her satisfaction and BCS closes the case • Benefits to the company: • No utility report required, just an email or voice mail confirmation to close the case • The case will not be evaluated by an investigator for infractions, but may be randomly selected for compliance review for UCARE Report

28. Pre-Warm Transfer Initiative/Informal Complaint Resolution, cont. • Methods of contact: • Company contacts our voice message system with the complainant on the line and they record their resolution/satisfaction. The voice file is attached to the case and the case is closed. • An email confirmation may be sent to the complainant by the company, with a copy to the BCS service account. BCS generates its own email to the consumer and closes the case. If the BCS email rejects, a letter is sent to the complainant via U.S. postal service. (Fax and snail mail also accepted)

29. Pre-Warm Transfer Initiative/Informal Complaint Resolution – cont. • Benefits to BCS: • Faster case resolution • All processes are clerical and administrative in nature • Much of this is designated for automated routing to clerical support staff • Process routes activity away from inbound telephone traffic to lighten the load • Allows BCS Policy Staff to maintain its random case selection and evaluation to meet case analysis and UCARE reporting requirements

30. Partnering with Utilities • To promote: • Positive changes to customer processes • Promote customer satisfaction • Goal: • Satisfied resolution of complaint • Customer retention

31. Final Thoughts “Look at a day when you are supremely satisfied at the end. It's not a day when you lounge around doing nothing; it's a day you've had everything to do and you've done it.”― Margaret Thatcher

32. FISH! Philosophy