Retail Market Readiness Task Force
Cutover Procedures
Issues and Task Force Recommendations for the
Transition to the New Retail Market
July 20, 2001
Cutover Document
Table of Contents
T ABLE OF CONTENTS ............................................................................................................... 1
1
INTRODUCTION.................................................................................................................. 2
2 IMPLEMENTATION OF NEW PRICING STRUCTURE ................................................................ 3
2.1
Non-Interval Metered Customers ............................................................................... 3
2.2
Interval Metered Customers ....................................................................................... 4
3 CUSTOMER ENROLMENT................................................................................................... 5
3.1
Accepting enrolments.................................................................................................. 5
3.2
Contestability rules pre and post market opening ...................................................... 5
3.3
Blackout periods .......................................................................................................... 6
3.4
Renumbering of accounts ........................................................................................... 6
4 PRUDENTIAL REQUIREMENTS ............................................................................................ 8
4.1
Timing of posting pre-market opening. ....................................................................... 8
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1 Introduction
This document is a summary of the Retail Market Readiness Task Force
recommendations for Cutover procedures.
The Cutover issues are related to the transition from legacy systems to the new
market systems. In making this transition, a local distribution company (LDC)
needs to determine the timing of the introduction of unbundled bills and retail
access for customers on interval and non-interval meters relative to the market
opening date. In addition there is the need to determine the timing of when a
retailer must post pre-market opening prudentials.
The cutover procedures are here defined as the required transitional procedures
for the period leading up to and just after market opening.
Three areas of concern have been identified relative to Cutover:
1. Implementation of new market pricing structure at the end-use
customer level;
2. Enrolment of customers; and
3. Posting of prudentials by retailers.
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2 Implementation of new pricing
structure
2.1 NON-INTERVAL M ETERED CUSTOMERS
Following market opening, LDCs must introduce unbundled bills including energy
charges based on the IMO administered hourly spot market price. Since customer
billing cycles vary, the transition or cutover bill will likely be based on both pre and
post market opening cost of power rates. A second issue is the need to ensure
that customers who enrol with retailers are billed on retail energy rates as soon as
possible post-market opening. The Task Force recommended that all accounts be
switched as soon as possible, but that an actual meter value must occur for the
switch to go ahead.
In addressing these issues, two options for implementing the new pricing structure
have been developed:
2.1.1
Method 1: Pro-rated Cutover Bills
For the billing period in which market opening occurs, the pre-market opening bill
portion will be based on pre-market opening rates and the post-market opening bill
portion will be based on the new market rates. Appropriate charges on the bill will
be pro-rated based on the number of days pre and post market opening. In this
scenario the first bill post market opening will be the cutover/transition bill and post
market opening charges will be billed according to the Standard Supply Service
(SSS) code. The first meter read after market opening will be the effective date for
a change in supplier if one is pending and the corresponding bill will include
retailer charges, or will be a retailer bill if retailer consolidated billing is chosen. If
no actual meter read occurs, then the customer will be billed on SSS.
The LDC will be billed by OPG pre-market opening and by the IMO post-market
opening. Pre and post market consumption for non-interval metered customers
within this billing period will be based on estimates. It is expected that the LDCs
will use their common estimation practices to calculate estimated consumption at
the customer level for both pre and post market opening.
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This method requires the deployment of new billing systems prior to market
opening and the ability for the billing systems to handle pre and post market
opening cost of power rates. The system would also require extensive prorating
capability.
2.1.2
Method 2: Legacy Rates and Rate Structures
For LDCs that do not intend to prorate their cutover bills, billing over the transition
period would be performed entirely according to legacy rates and rate structures.
Customers would be moved to the new rate structure based on billing cycle.
Customers will not receive a bill in the new unbundled format until the second bill
after market opening. The first meter read after market opening will be the
effective date for a change in supplier if one is pending and the corresponding bill
will include retailer charges or retailer bill where applicable. If no actual meter
read occurs, then the customer will be billed on SSS.
LDCs using Method 2 will experience a cutover variance. Initial feedback from the
rates group at the OEB recommends creating separate accounts for cutover
variances (as opposed to lumping these variances into existing accounts such as
the Power Purchase Variance Account). The OEB will define close to market
opening how to deal with the Cutover variance.
2.2 INTERVAL M ETERED CUSTOMERS
The Cutover Subcommittee recommends that customers with interval metering
should be billed at market opening based upon meter data as of the last date of
legacy operations (e.g. October 31), and then moved to the new rate structure as
of new market opening (e.g. November 1). Supplier charges would occur as of the
market opening date.
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3 Customer Enrolment
The issues related to customer switching include:
•
•
•
Contestability rules pre and post market opening
Blackout periods
Renumbered accounts
3.1 ACCEPTING ENROLMENTS
When should LDCs begin accepting enrolments and what rules will apply (e.g. first
retailer to submit Service Transaction Request (STR) gets customer)?
Recommendations:
• LDCs will, at the latest, start accepting STRs once their EBT system is
functional and a market opening date is set by the Minister. As a
consequence, the start date for accepting STRs will vary amongst LDCs. The
LDCs will be required to give advance notice of when they will start accepting
STRs.
•
The first STR which is stamped by a Hub or by the receiving point-to-point EBT
system after the STR acceptance date (as communicated by the LDC) will be
processed.
•
A stability period of 2 weeks prior to and 2 weeks after market opening will
exist where no STRs would be accepted by LDCs. This will mitigate pressure
on LDCs during the transition period.
3.2 CONTESTABILITY RULES PRE AND POST MARKET OPENING
The approach of accepting the first STR time stamped by a Hub or receiving point
to point EBT system (outlined above) may lead to a large number of simultaneous
STR submissions from retailers to LDCs for market opening. Retailers expressed
concern that the potential for contested enrolments may overload the system.
One of the concerns expressed by the Task Force is that the enrolments may
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include a large number of customers that have signed with more than one retailer.
To address this issue, a retailer mediation process for duplicate enrolments can be
used. For multiple sign-ups of particular customers, retailers would compare
account numbers with each other in order to identify matches. They will then
mediate and determine (pre-market opening) who gets the customer. Resolution
of this issue is up to the retailers. This approach will take away the motivation for
retailers to try and be “first-in”. After mediation the retailers would feed STRs to
Hubs in an orderly manner pre-market opening, and Hubs would feed STRs to
LDCs in tranches.
Recommendation: The OEB is currently considering the following
recommendations. A customer enrolment fulfilling the requirements of the
screening process shall remain pending until the next meter read (subject to
blackout period restrictions) and any further STRs would be rejected until after the
relevant meter read.
3.3 BLACKOUT PERIODS
As per section 10.5.1 of the Retail Settlement Code, where an STR for a service
provider change is received by the distributor twenty days or less before the next
scheduled meter read for the customer, the distributor is not obligated to change
service provider until the scheduled meter read following the next scheduled meter
read. This is referred to in the EBT standards document as a blackout period.
However, it may be difficult for retailers to track the various blackout periods set by
LDCs. Therefore, retailers would like to achieve some level of certainty and
consistency among blackout periods for different LDCs.
Recommendation:
•
The length of the blackout period should be identified in the Service
Agreement. This will not create a uniform blackout period, but allows for some
certainty to retailers.
3.4 RENUMBERING OF ACCOUNTS
Due to LDC amalgamations and system changes, certain customer account
numbers have changed and the link between old and new account numbers
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cannot easily be tracked (this process is also referred to as re-folioing accounts).
Retailers that submit STRs for customers whose account numbers were valid at
the time of customer sign-up, but whose account numbers have since changed
due to an LDC amalgamation, will have the STRs rejected.
Recommendation:
•
For LDCs that have in the past 12 months revised their account number,
retailers will scrub their data first with each LDC to ensure that they have the
LDC’s current CIS account number for a particular customer. The LDC will tell
the retailer if the account number is current only if the information in other
required data fields matches and if the “old” account number submitted by the
retailer is correct.
•
The costs will most likely be viewed as transitional costs (i.e. costs of getting
ready for the market place). LDCs will not charge separately for this process
unless an approved rate is obtained from the OEB.
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4 Prudential requirements
4.1 TIMING OF POSTING PRE-MARKET OPENING .
One issue regarding prudential requirements is the timing of postings pre-market
opening. Retailers do not want to submit prudentials too soon before market
opening, whereas LDCs want some certainty of the amounts involved and want to
be able to process the amounts pre-market opening.
Recommendation:
Retailers will provide estimates of the number of their customers as well as their
consumption 30 business days before LDCs start to accept STRs (LDCs will start
to accept STRs once a market opening date is known and the EBT system is
functioning – as per above recommendations). Prudentials will be posted a
minimum of 10 business days before market opening.
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