__MAIN_TEXT__

Page 1

2017 ANNUAL REPORT PROTECTING CONSUMERS

Office of the People’s Counsel

EASING THE ENERGY BURDEN PROMOTING A SAFE AND SUSTAINABLE ENVIRONMENT


“OPC’s advocacy has helped Washington, DC’s consumers save millions of dollars in rates and fees. My neighbors and constituents are especially grateful for OPC’s role in keeping the utilities portion of our cost of living at a manageable level.” Civic Leader Testimonial/DC Council Testimony | Karrye Y. Braxton, Ward 4 Advisory Neighborhood Commissioner


TABLE OF CONTENTS Letter from the Mayor..............................................................................1 Letter from the People’s Counsel ............................................................2 About the Office of the People’s Counsel . .............................................4 Protecting Consumers..............................................................................5 Easing the Energy Burden........................................................................12 Promoting a Safe and Sustainable Environment......................................20 Agency Funding.......................................................................................23 Agency Staff.............................................................................................24


LETTER FROM THE MAYOR residents in all eight wards receive tangible and lasting benefits.

Dear Washingtonians: To ensure your ability to live comfortably and for our businesses and economy to thrive, access to safe, affordable, and reliable public utilities is critical. I am pleased to join the Office of the People’s Counsel (OPC) in presenting its 2017 Annual Report: “Protecting Consumers, Easing the Energy Burden and Promoting a Safe and Sustainable Environment.” Along with many of the sustainability measures put into place by my Administration, the OPC has had an integral role in ensuring that as technological advances and regulatory changes emerge,

1

Office of the People’s Counsel

The preservation and development of affordable housing and the strengthening of our workforce have been major focuses of my Administration, and we have made measurable progress. Our DC Infrastructure Academy is training our young to become skilled workers in the energy field; our Green Bank, approved earlier this year, will be an innovative policy tool that seeks to expand renewable energy, lower energy costs, reduce greenhouse gas emissions, and create green jobs (making DC the first city in the country with a Green Bank); and Washington, DC is the first city in the world to receive the LEED Platinum designation. The period 2017-2018 has been a time of transformation for two of our longtime energy providers, Pepco and Washington Gas, as they were immersed in different stages of corporate mergers. OPC is to be commended for carrying out its statutory mandate to ensure every merger that is approved is in the public interest and that you, our consumers, realize tangible benefits. Rate reductions, customer bill credits, utility infrastructure improvements, and workforce development

for Washingtonians are the kinds of benefits for which OPC negotiated in merger settlements like the recent AltaGasWashington Gas acquisition. Such utility company commitments are particularly critical to families who struggle to make ends meet. No matter who supplies utility services to District ratepayers in the days, months or years ahead, I am confident that People’s Counsel Sandra Mattavous-Frye and the dedicated team at the OPC will continue their vital work advocating, educating, and protecting consumers to help navigate the often complex and rapidly changing utility landscape. Sincerely,

Muriel Bowser Mayor


LETTER FROM THE PEOPLE’S COUNSEL ensured that these consumers’ voices are heard as decisions affecting their way of living are made.

I am honored to present to you the 2017 Annual Report of the Office of the People’s Counsel (OPC): “Protecting Consumers, Easing the Energy Burden, and Promoting a Safe and Sustainable Environment.”

Readers might recall that last year I shared in this space my reflections on the Public Service Commission (PSC) approval of the Pepco-Exelon merger in March 2016. The benefits of the Pepco merger, including the bill credit for residential consumers, are still in place. Just one year later, OPC leaped into action to focus on another merger: the application of AltaGas, a Canadian utility company, to acquire the Washington Gas Light Company and its parent company, WGL Holdings. These mergers shift the paradigm for regulators, government, and local businesses with respect to consumer protection, energy costs, and the development of environmentally-conscious energy resources. They also present an opportunity for OPC to carry out its mission to advocate for, protect, and educate District consumers.

The Annual Report is a snapshot of services OPC has provided on numerous fronts for the benefit of District consumers. I am proud to lead a dedicated staff of professionals who have achieved numerous positive results for District consumers and

OPC carefully reviewed the gas company merger applications and throughout the proceedings pressed upon the parties that Washington Gas ratepayers, the District’s economy, and the environment must not be harmed. As a result of OPC’s vigorous

Dear District of Columbia Utility Consumers:

advocacy, the PSC approved a settlement agreement in June 2018 that includes numerous commitments and tangible consumer benefits. OPC will ensure Washington Gas meets the commitments as listed on page 14 as we work on Easing the Energy Burden for District ratepayers. OPC’s Litigation Services Division also stepped up to ensure District ratepayers benefitted from the changes in federal tax laws that reduced corporate taxes, including the tax obligations of WGL and Pepco. Electric and natural gas customers are expected to see more than $32 million in combined rate reductions, thanks to OPC efforts. More details are on page 15. Beyond OPC’s legal advocacy, the strides the Office has made in educating the public and responding to consumer complaints through our Consumer Services Division (CSD) are essential to the agency’s overall effectiveness. CSD handled more than 3,000 consumer complaints and inquiries in Fiscal Year 2017. These interactions, coupled with robust public outreach at hundreds of “OPC in Your Neighborhood” events are a vital, real-time source of information on what utility consumers are experiencing.

2017 Annual Report

2


In Protecting Consumers, OPC uses this input to inform our requests for PSC investigations and DC Council legislation, and in developing evidence in major cases like merger settlements. In early 2017, consumer services outreach and complaint intake raised red flags that third party that third party energy suppliers (TPS) were stepping up their aggressive marketing to sign-up new customers. On-the-ground insights allowed staff to quickly focus energies on residents victimized by deceptive practices, identify the companies involved, and call them in to discuss solutions. Learn more about measures we have taken to address TPS marketing as well as “meter madness,” another source of consumer discontent, on pages 5 and 6 respectively. Recognizing that DC residents’ interest in going solar is steadily growing, OPC has worked to ensure that consumers in all eights wards are privy to information about renewable energy options that could reduce their utility bills. OPC was pleased to publish “A DC Consumer’s Guide to Going Solar” that provides simple tips to help everyday consumers decide if solar is right for their household. Explore how OPC is helping to “let the sun shine in” on page 20. OPC’s activities at the federal and regional levels are giving voice to DC consumers when decisions on energy resources and

3

Office of the People’s Counsel

pricing are being made. The Office has been able to influence actions by the Federal Energy Regulatory Commission (FERC) and PJM (Pennsylvania/Jersey/ Maryland) Interconnection, which provides wholesale energy to the region. With an eye toward Promoting a Safe and Sustainable Environment, for example, OPC and other consumer advocates have combined efforts to fight proposals that would have ratepayers cover a bail-out for the coal industry. See page 18 for more information. The DC Powerline Undergrounding project (DC PLUG) is among the utility construction initiatives critical to shoring up infrastructure and reliability. While the impetus for DC PLUG dates to prior years’ severe storm-related power outages, OPC has steadfastly worked to reduce the cost to Pepco customers. There is an update to DC PLUG on page 21. Late in 2017, the DC Council introduced legislation that would authorize OPC to assist DC Water consumers and provide formal assistance in resolving water service complaints and other related matters. OPC is willing and prepared to serve if the law is enacted. DC Council legislation tied to expanding OPC’s mission and scope is cited on pages 16 and 17. As the District of Columbia experiences population growth, the challenges facing the Office of the People’s Counsel are changing.

The 2017 Annual Report documents how OPC is meeting these continuously evolving challenges by Protecting Consumers, Easing the Energy Burden, and Promoting a Safe and Sustainable Environment. Ensuring utility consumers in the District of Columbia have safe, affordable, and reliable utility services, is and must be, the end result of all we do now and in the future.


People’s Counsel Sandra Mattavous-Frye with DC Court of Appeals law clerks.

ABOUT THE OFFICE OF THE PEOPLE’S COUNSEL The Office of the People’s Counsel is an independent agency of the District of Columbia government. By law, the Office advocates for consumers of natural gas, electric, and telephone services. The Office also represents the interests of District utility ratepayers before the DC Public Service Commission (PSC), Federal Energy Regulatory Commission (FERC), Federal Communications Commission (FCC), other

The People’s Counsel with OPC’s legal team.

utility regulatory bodies, and the courts. The Office is mandated to conduct consumer education and outreach, and as the utility lawyer for ratepayers, OPC may represent individual consumers with complaints related to their service and bills. The Office is authorized to investigate the operation and valuation of utility companies independent of any regulatory proceeding. The Office’s mandate is to advocate for the provision of quality utility service and equitable treatment at rates that are just, reasonable, and non-discriminatory; to assist individual consumers in disputes with utility companies about billing or services; and to provide technical assistance and consumer education to lay advocates and community groups.

In Protecting Consumers, Easing the Energy Burden, and Promoting a Safe and Sustainable Environment, OPC pursues its mission to the benefit of consumers in all eight wards, as well as the betterment of the economy of the District of Columbia, the conservation of natural resources, and the preservation of environmental quality.

HISTORY OF THE OFFICE Originally established by the United States Congress in 1926, the Office was eliminated by that body in a federal Executive Branch reorganization in 1952. Community concern in the early 1970s about rapidly rising electric rates resulted in the reestablishment of the Office by Congress. OPC became an independent agency of the District of Columbia government on January 2, 1975.

2017 Annual Report

4


RESPONDING TO COMPLAINTS ABOUT THIRD PARTY SUPPLIER MARKETING

PROTECTING CONSUMERS As the nature of the consumer-utility relationship changes, OPC has adapted to address new service providers and energy options, and a range of challenges like infrastructure projects now facing District residents. OPC’s mandate to vigorously protect ratepayers is achieved for their benefit on numerous fronts.

OPC has responded to a growing number of consumer complaints against energy companies known as third-party suppliers (TPS). TPS companies are licensed to sell electricity or natural gas to consumers in the District of Columbia as an alternative to standard suppliers like Pepco or Washington Gas. A TPS may offer, for example, solar power or energy generated from other renewable sources like wind.

While OPC believes consumers should have opportunities to choose energy options that best fit their household needs, the Office is concerned about marketing practices by some TPS companies and the negative impact on a consumer’s ability to pay their energy bills. What is particularly alarming is when consumers unknowingly sign contracts that include variable rates that fluctuate excessively on month-to-month basis. In Protecting DC consumers from shady TPS marketing, OPC has saved ratepayers $27,000 in refunded fees and payments in fiscal year 2017.

OPC PROTECTING CONSUMERS

Published “A Consumer’s Guide to Third-Party Suppliers” provides valuable information to help you choose a TPS.

5

Office of the People’s Counsel

Returned nearly $30,000 to consumers victimized by TPS marketing tactics.

Distributed tips to educate consumers at “OPC In Your Neighborhood” visits to grocery stores, farmers markets, libraries, and other locations in all eight wards.

Hosted meetings with TPS companies and industry officials with the Retail Energy Supply Association to outline consumers’ concerns about TPS practices.


Here is the story of one consumer whose name is withheld for her privacy and protection. A third-party supplier solicited “Sandy Satisfied” before the winter heating season. The TPS representative offered a $50 gift card if she switched her home to a renewable energy plan. Sandy signed up by answering a series of prompts over the phone. The representative did not explain in detail that the initial rate was for an introductory period of three months and that the price would automatically switch to a variable rate. Sandy did not receive a copy of her contract until after the three-day cancellation period had already passed. After a few months, Sandy’s bills tripled and became hard for her to manage. She contacted OPC and we opened an investigation on her behalf. OPC determined that the TPS sales representative had not followed a company

policy to obtain a written signature for the contract, and OPC helped Ms. Satisfied to get back more than $1,200 that she had overpaid to the TPS company. “If it weren’t for OPC, my family and I would have been left in the cold,” said Ms. Satisfied. Our advocacy for Ms. Satisfied is representative of the protection OPC stands ready, willing, and able to provide for District residents.

RESOLVING CONCERNS ABOUT METER PLACEMENTS Residents of the Tyler House Apartments in Northwest sought OPC’s help when they became concerned about high gas bills. In launching an investigation and visiting tenant units, OPC discovered that some of the gas meters, gas-fired appliances, and

ventilation systems were installed inside the apartments in a manner that appeared to violate DC building codes. OPC brought the suspected unsafe conditions to the attention of Washington Gas Light (WGL) and worked with the residents, Tyler House building management, and the Department of Consumer and Regulatory Affairs (DCRA) to coordinate formal inspections of the suspected violations. DCRA subsequently confirmed violations in several apartments. The building owner responded by either correcting the violations or providing documentation that the equipment’s installation was in line with codes. Meanwhile, WGL began construction in Brown’s Court, located in Capitol Hill in Ward 6, and in the Hughes Mews area of Foggy Bottom in Ward 2 as part of PROJECTpipes, WGL’s multi-million-dollar plan to replace

2017 Annual Report

6


NEW RULES FOR METER PLACEMENTS Indoor meters must meet minimum requirements for ventilation A list of prohibited locations where gas meters and gas service regulators shall not be installed is required A minimum 30-days’ notice must be provided to customers before replacing or relocating gas or electric service lines Crews shall avoid installing equipment on the principal street facades and shall employ best efforts to place the equipment in the rear of property These rules contribute to the safety of consumers and maintain the integrity of customer’s front-facing structure

hundreds of miles of outdated gas main lines. During that construction, WGL also began moving its meters from inside homes to the outside. However, WGL’s preferred locations for relocating the meters were at odds with many residents’ preferences, particularly at Brown’s Court, where many wanted them to stay inside. The residents were dissatisfied with the construction for numerous other reasons, and after complaints to the DC Department of Transportation, Ward 6 Councilmember

7

Office of the People’s Counsel

Charles Allen, and ultimately OPC, the construction was halted. OPC consumer outreach staff and attorneys initiated a series of meetings with residents and District and WGL officials, which led to solutions that addressed the apartment dwellers’ concerns, as well as the gas company’s need to manage its infrastructure in the safest and most efficient manner. OPC’s diligence in Protecting Consumers resulted in the DC Public Service Commission

issuing new rules in March 2018 governing inside and outside meter placements, including stronger safety measures. The rules also state that a gas utility “shall employ best efforts to preserve the integrity and appearance of the building and its facades.”


“I dealt with Washington Gas from October 2016 through January 2017 regarding the company’s natural gas pipeline and metering equipment upgrades for our residence. No resolution was forthcoming. Then I contacted the Office of the People’s Counsel, where I received knowledgeable and helpful support from Cheryl Morse and Jason Cumberbatch. They listened to my concerns and provided answers and guidance. The Office worked diligently with me and coordinated with Washington Gas to resolve the problem so that the location of the gas pipeline does not obstruct our access to the garage and driveway. The Office strongly advocated for me. Without OPC’s help, I do not believe that I would have had a satisfactory solution to this problem.” Consumer Testimonial | Mrs. P.S. Ludwig, Capitol Hill Resident

PROTECTING SENIORS AND VULNERABLE RESIDENTS The AARP Legal Counsel for the Elderly’s Long-Term Care Ombudsman Program brought to OPC’s attention instances of vulnerable, often critically ill residents suffering from the impact of utility disconnection. These residents are often not the customer of record on the utility account. Rather, the operators of the programs or facilities where they reside are in private contracts with the utilities. Bills, payments, and disconnection notices are sent directly and exclusively to the management account holders; therefore, residents and their families are unaware of past due bills until after the utilities are disconnected.

OPC and Ombudsman Program representatives raised the issue with Ward 4 Councilmember Brandon Todd and worked to propose legislation that would lessen the potential for continuing harm to residents of these facilities. On June 27, 2017, Councilmember Brandon Todd, along with co-sponsor At-Large Councilmember Anita Bonds, introduced B22-0353, “The Community Residential Facilities Third-Party Notice of Utility Disconnection Requirement Act of 2017.” The bill requires utility companies to give 30 days’ notice to the Ombudsman Program and District government agencies managing community residence facilities, assisted living residences, and nursing homes before disconnecting service. The bill does not obligate the Ombudsman’s office or the

managing agencies financially. However, the measure gives them time to intervene with the facility operators, examine the status of the account, and if necessary, proceed to arrange alternative care for residents. In Protecting Consumers, OPC played a major role in the enactment of Community Residential Facilities Third-Party Notice of Utility Disconnection Requirement Act. This law will ensure some of the most vulnerable District residents maintain continuous utility service or are appropriately relocated to protect their health and safety.

2017 Annual Report

8


PROTECTING SENIORS AND VULNERABLE RESIDENTS THE CHALLENGES: • Long-term care facility residents require around-the-clock medical care and supervision and are severely impacted • • • •

by utility disconnections. Residents living in Community Residential Facilities (CRFs) became subject to potentially life-threatening uninhabitable living conditions when CRF utilities were disconnected for non-payment. CRF residents are not the customers of record and are not entitled to inquire about billing or negotiate the retention of service. Residents and their families are likely unaware of the arrangements until after the utilities are disconnected. Residents may not have alternative living arrangements during disconnections.

THE THIRD-PARTY NOTIFICATION BILL: • Requires utilities to provide 30 days’ notice to the Long-Term Care Ombudsman Program, Department of Health, • • • • • •

Department of Behavioral Health, assisted living residences and nursing homes prior to disconnections. Provides CRF facility “managers additional” time to negotiate the retention of utility service. Gives agencies time to intervene and advocate for residents and prevent disconnections. Requires facilities to list the managing agency as a third-party contact with the utilities. Encourages prompt payment of outstanding utility bills. Helps ensure the funding dedicated to paying the CRF’s utility bill is used for that purpose. Avoids the cost and inconvenience of disconnecting and reconnecting utility services.

WHEN DOES THE BILL GO IN EFFECT? • The bill was enacted into law (L22-0104) on June 5, 2018.

“Edgewood seniors are certainly grateful that OPC is there to protect their utility interests.” Consumer Testimonial | Reverend Margie Harris, President, Edgewood Senior Citizens Building Residents’ Council

9

Office of the People’s Counsel


OPC IN YOUR NEIGHBORHOOD

2017 Annual Report

10


LANGUAGE ACCESS In FY 2017, OPC engaged 3,844 limited (LEP) and non-English (NEP) speaking persons. የሶስተኛ ወገን አቅራቢዎች የተጠቃሚ መመሪያ OPC ለመገልገያ ተጠቃሚዎች ይከራከራል፣

ያስተምራል እና ጥበቃ ያደርጋል

Participated in 69 outreach events for LEP/NEP consumers at which 9,689 people attended. CONOZCA SUS DERECHOS COMO CONSUMIDOR DE EMPRESAS DE SERVICIOS PÚBLICOS (CBOR)

OPC-DC Office of the People’s Counsel ADVOCACY | EDUCATION | PROTECTION

La Declaración de Derechos de los Consumidores proporciona garantías de protección para los consumidores de gas natural, electricidad y servicios de telecomunicaciones en los competitivos de servicios públicos del Distrito de Columbia. Esta define la relación y las responsabilidades tanto de los proveedores de servicios públicos como de los consumidores.

A continuación se muestran los aspectos destacados de varias de las secciones más importantes de CBOR:

Inicio de Servicio con una Empresa de Servicios Públicos:

Los representantes de Empresas de Servicios Públicos deben presentar una identificación a los consumidores §313.1 No es necesario el número de seguro social para iniciar el servicio §308.1 Las Empresas de Servicios Públicos pueden no exigir el pago de un depósito de seguridad a los clientes que reciben servicios por primera vez §307.7 Cuando se exija un depósito, este no debe exceder $100 §307.7

Facturación:

Los clientes deben recibir una factura al menos una vez durante cada período de facturación §304.1 Los pagos del servicio se vencen veinte (20) días después de la fecha en que se entregue la factura §305.1

Translated 50 documents in Amharic, Chinese, French, Korean, Spanish and Vietnamese.

11

Office of the People’s Counsel


EASING THE ENERGY BURDEN For many consumers, a significant portion of their household income is committed to their utility services. Therefore, it is critical that OPC investigate the accuracy of billing and service complaints and formulate resolutions. OPC’s advocacy ensures rates remain just and reasonable, and that other factors impacting customer bills, such as tax cuts, are maximized. Creating entirely new benefits in merger agreements is a way that we achieve some of the most tangible benefits for consumers.

RESOLVING CONSUMER COMPLAINTS In fiscal year 2017, OPC staff received 2,349 complaints from consumers about their utility services, compared to 2,785 during the prior year. OPC staff also responded to 924 inquiries. The vast majority of complaints came from Wards 4, 5, 7 and 8. OPC consumer services staff closed 95% of the complaints.

PEPCO Pepco accounted for 1,296 of the complaints. The complaints presented issues related to high bills, disconnections and disconnection notices, increased residential rates, smart meter accuracy and safety concerns, solar panel connection time, net metering accuracy, and either lengthy holds or dropped calls on Pepco’s customer service lines. WASHINGTON GAS (WGL) OPC received 672 WGL consumer complaints. Issues raised in complaints included disconnections and notices for disconnections, billing disputes, meter accuracy, and inadequate notification prior to pipeline construction, as well as street, sidewalk and landscape damage and delayed repairs, moving meters to outside locations without notification, poor meter relocation, and difficulty paying bills online. VERIZON OPC received 252 complaints against Verizon. The complaints involved poor copper phone line maintenance and repeated delays in repairs; high pressure marketing to get customers to switch from copper to fiber optic cable; misrepresentation of Fios as the “only way” to resolve recurring maintenance problems; lack of information and consumer confusion about the differences between fiber optic cable and Fios; copper phone lines switched

CITYWIDE CONSUMER COMPLAINTS

55%

Pepco

29%

Washington Gas

11%

Verizon

8%

Third Party Suppliers (TPS)

2017 Annual Report

12


to fiber optic cable without consumer notification; failure to educate consumers about the transition from copper to fiber optic cable, delayed Lifeline bill assistance recertification, resulting in higher bills; and billing disputes over bundled packages. THIRD PARTY SUPPLIERS (TPS) TPS companies accounted for 129 of the complaints. These complaints ranged from dramatic increases in bills, deceptive and high-pressure marketing tactics, TPS representatives’ failure to explain the difference between fixedand variable-rate contracts, difficulty contacting a TPS to terminate contracts and failure to provide consumers with signed written contracts.

GETTING RESULTS WITH $10,000 BACK IN THE BANK OPC’s Consumer Services Division (CSD) responds to numerous consumer complaints about high utility bills, and most of the cases are closed with “satisfied customers.” One such consumer, Julio Novelo, contacted OPC in May 2018 about very high Pepco bills. Novelo is the manager of a Boost Mobile Store on H Street, NE. The electric bills started increasing at an alarming rate several months before. Novelo started comparing the bills from similar Boost Mobile locations around the city and found that the average monthly electric bills for his store were $600

13

Office of the People’s Counsel

to $700 greater and roughly two to three times higher than other locations. Based on the comparisons, CSD opened an investigation with Pepco and requested what’s called a “referee meter test” to determine if the meter is calibrated correctly and not malfunctioning. The meter test was performed, and the equipment passed the test. However, Pepco’s analysis revealed that Novelo’s store had been incorrectly placed in a commercial customer rate class since May 18, 2016. It was determined that the rate was not applicable based on the store’s demand history and the amount of electricity it had been using. On June 29, 2018, a corrected bill was issued for a two-year period, giving Mr. Novelo a refund of $10,895.41. Pepco mailed a refund check to the satisfied customer to cover the discrepancy that OPC brought to light in our efforts to Ease the Energy Burden for DC consumers.

GENERATING NEW BENEFITS AND PROTECTIONS FOR CONSUMERS IN GAS COMPANY MERGER On April 24, 2017, AltaGas Ltd., a Canadian energy company, filed an application with the Public Service Commission seeking permission to

Consumer Testimonial Barbara Morgan, Vice President of the Fort Dupont Park Civic Association

“OPC is recognized as a leader in utility consumer advocacy. With all that is happening with the District’s utilities—mergers, major WGL pipeline replacement and meter relocation projects, choices of renewable energy sources, as well as unregulated, increasing water bills—consumers need effective, proactive utility consumer advocacy. OPC is the advocate that DC’s utility consumers need.”


acquire the nearly 180-year old Washington Gas Light Company and its parent company WGL Holdings. OPC reviewed the application carefully and found that it lacked the consumer benefits that companies are required to present in the District as a condition of merger approval. The evidence demonstrated that an acquisition based on the terms provided in the initial application could harm ratepayers because the merger brought with it new financial, safety, and reliability risks, and raised environmental issues at odds with the District’s clean energy policies. OPC advocated vigorously before the Commission to bring these risks to light. The Office also met with community leaders to educate residents about OPC concerns. Our advocacy paid off in settlement discussions. On May 8, 2018, a unanimous settlement agreement was filed with the Commission that included more than 80 commitments designed to safeguard ratepayers from merger-related risks and to produce direct consumer benefits. On June 29, 2018, the Commission approved the merger subject to certain additional financial protections that the companies accepted. Easing the Energy Burden, OPC will ensure the commitments and provisions of the settlement are met.

KEY MERGER CONDITIONS INCLUDE: $20.5 million in rate credits for WGL’s residential customers (about $150 per residential-heating customer). $6 million for workforce development, $4 million for energy efficiency initiatives, and $1.5 million for the Washington Area Fuel Fund to help with bills, none of which can be recovered in rates. A two-year moratorium on filing a new rate case.

Robust financial, management, and cybersecurity protection measures. $4 million to hire and train additional repair crews and a requirement that WGL meet certain leak reduction targets or be subject to financial penalties for non-compliance. A limitation on the money Washington Gas can recover from ratepayers through its PROJECTpipes line replacement surcharge. A requirement that Washington Gas develop and present to OPC new home meter relocation procedures. The development of 10 MW of energy storage or renewable energy resources, and a requirement that AltaGas file a long-term business plan to support the District’s climate goals.

2017 Annual Report

14


“OPC has a reputable track record of providing the District’s utility consumers with first-rate representation in utility regulatory proceedings, making sure that rates are as affordable as possible and with service delivery that is both safe and reliable.” Consumer Testimonial/DC Council Testimony | Graylin Presbury, President of the DC Federation of Civic Associations

CONTINUING THE FIGHT TO KEEP UTILITY RATES DOWN WHILE ENSURING CONSUMERS GET FULL TAX CUT BENEFITS On July 25, 2017 the Public Service Commission (PSC) approved Pepco’s request to increase electric rates by almost $37 million. Due in large part to OPC’s vigorous opposition, this authorization was only half of the amount orginally requested by Pepco. Importantly, rate credits from the PepcoExelon merger that OPC fought for and won offset the increase in residential rates for two more years. As a result of OPC’s zealous advocacy in Easing the Energy Burden, DC consumers have not had to pay for an increase in Pepco distribution rates for four years.

15

Office of the People’s Counsel

On December 19, 2017, Pepco requested an additional $66 million rate hike. Soon after, the federal Tax Cuts and Jobs Act of 2017 (TCJA) was signed into law. The TCJA lowered the federal corporate tax rate, reducing the 2018 tax obligations for Pepco and Washington Gas Light (WGL). OPC advocated that consumers should share in the benefits that the utilities would see. PEPCO On January 23, 2018, the Commission directed Pepco to file a plan to reflect the TCJA’s impact on electric rates. In so doing, Pepco also updated its December rate application. The Office reviewed the application in detail and engaged in several settlement discussions to ensure ratepayers were protected. The resulting settlement package, which was approved by the Commission, includes a $24 million rate decrease and a moratorium on new Pepco rate proposals until May 1, 2019.

WASHINGTON GAS On January 12, 2018, WGL voluntarily filed a proposal to reflect the lower tax rate. The company also asked that the Commission waive certain regulatory procedures. OPC successfully argued against the waiver, contending that stakeholders needed an opportunity to review WGL’s calculations to ensure ratepayers received the maximum benefits. Following several discussions on possible settlements, OPC joined in supporting a unanimous settlement agreement with an $8 million reduction in WGL’s distribution rates. The PSC approved the rate cut on June 29, 2018, and further directed WGL to provide a credit on customers’ bills to reflect the TCJA’s impact prior to the new distribution rates taking effect.


MOVING TOWARD WATER

The Office of the People’s Counsel is the statutory advocate for consumers of electric, natural gas, and local telephone services. However, in 2017, consumers began to express concern about the exponential increase in their water bills from DC Water. In response to the “troubled waters,” OPC was called in to expand its advocacy to DC Water customers. In an effort to allay consumers’ concerns about high water bills, aging meters, and insufficient customer service, the DC Council is considering the “DC Water Consumer Protection Amendment Act of 2018.” Among other provisions, the bill grants OPC authority to represent District residents in DC Water matters and to educate residents about their legal rights in billing and service disputes.

While OPC would be able to perform an important role in assisting DC Water customers with complaints, under DC’s current structure, the Office would be limited in its oversight of water rates and the controversial Clean Rivers Impervious Area Charge that has been the source of much discontent, particularly among churches. DC Water is a public utility, however due to its independent structure, the agency also sets and approves its own rates. This structure is different than other public utilities such as Pepco and Washington Gas, whose rates must be approved by the DC Public Service Commission before they show up on a customer’s bill. Despite these limitations, OPC is confident that we can meaningfully assist consumers in five areas: mediating individual complaints, providing public education, recommending limited rate-

design, assessing environmental issues, and navigating the administrative process. For example, OPC can help forestall disconnections and negotiate payment plans. OPC can also educate consumers about water conservation, address environmental issues, and offer recommendations to improve the system. These areas are a natural extension of the Office’s current role of successfully brokering resolutions for individual consumer complaints against the electric, natural gas, and telecommunications utilities. Based on our extensive experience in consumer education and outreach, OPC can also educate the public about their rights and responsibilities and help residents better understand the processes and procedures of water services. The DC Council is expected to take a final vote on the bill bringing OPC on board before the end of 2018.

2017 Annual Report

16


DC WATER CONSUMER PROTECTION AMENDMENT ACT OF 2018 The Office of People’s Counsel may do the following: • Represent the interests and advocate for the people of the District of Columbia at hearings before DC Water and the Board of Directors of DC Water. • Independently investigate complaints or disputes with DC Water pertaining to: Billing and payment plans; Service connection and disconnection; Customer service; Customer deposits; and Construction schedules and notice. • Represent and appear for District residents in matters involving products or services furnished by DC Water in judicial proceedings in DC courts; and before federal courts, regulatory agencies, and commissions. • Advise and educate DC Water customers about their legal rights and responsibilities.

17

Office of the People’s Counsel

FOCUSING ON FEDERAL AND REGIONAL INITIATIVES OPC is vigorously engaged in numerous federal and regional initiatives that affect District ratepayers, with the goal of Easing the Energy Burden. OPC is a member of PJM Interconnection, the regional transmission and wholesale market operator that coordinates the movement of wholesale electricity to the District and parts or the entirety of 13 states. Through membership in Consumer Advocates of the PJM States, Inc (CAPS), OPC works with other agencies to coordinate and leverage our representation at PJM. OPC also has intervened in matters at the Federal Energy Regulatory Commission (FERC) and regularly meets with FERC Commissioners and staff to discuss issues of concern to District ratepayers. PROTECTING CONSUMER-FRIENDLY COMPETITIVE MARKETS For the past two decades, competition among wholesale electric markets have brought billions of dollars in savings and benefits to ratepayers in the District, resulting in cleaner, more efficient, more diverse, and more resilient energy generation. During the past year, however, several proposals were put forward at the federal level to roll back these benefits. During Fall 2017, Rick Perry, Secretary of the U.S. Department of Energy (DOE), asked FERC to develop a proposal in which some electricity generators would receive a price subsidy. While the proposal was promoted as


a way to ensure the reliability and security of the electric grid, the beneficiaries largely would have been coal and nuclear power generators with billions of dollars in costs passed down to ratepayers. OPC and several other state consumer advocates joined forces to strongly oppose DOE’s proposal. On January 8, 2018, FERC rejected the proposal, holding that it “did not satisfy…clear and fundamental legal requirements” and that the evidence does not “point to any past or planned generator retirements (closings) that may be a threat to grid resilience.”

OPC has vigorously opposed proposals to subsidize coal and nuclear facilities, which would be to the detriment of District ratepayers. For example, People’s Counsel Sandra Mattavous-Frye sent a letter to the White House outlining the benefits that competitive energy markets have brought to consumers. As has been demonstrated on multiple occasions, the current electric grid is extremely resilient, and the retirement of certain facilities will not negatively impact that resilience as they will be replaced by newer, cheaper, and cleaner facilities. OPC will continue to fight for competition and against counter-productive bailouts, ensuring DC consumers receive the protections and benefits they deserve.

DEVELOPING A RELIABLE, RESILIENT, AND AFFORDABLE ELECTRIC GRID Both PJM and FERC are discussing how to make the wholesale electric grid more resilient and capable of recovering from a major disruption like a cyber-attack or hurricane. These discussions include issues related to fair and transparent compensation and energy pricing to ensure that resources that enhance reliability, particularly during extreme weather, are covered. The debate also centers on the protection of the electric grid and the role of new technologies—such as battery storage—to address resiliency.

“What about all the people who don’t have someone to directly advocate for them, or at least to explain what is happening and take them to a more comfortable environment? There’s no place to go. This bill [Third Party Notification] makes sense. It’s not just compassionate. It’s right and well deserved.” Consumer Testimonial/DC Council Testimony | Susan Saunders Mckenzie, Ward 4 Resident (Third Party Notification Bill)

2017 Annual Report

18


Throughout this process, OPC has articulated the following principles: œœ Consider costs and performance in assessing the value of projects. œœ Establish openness and transparency to discover the most effective ways to build resiliency. œœ Promote consumer-driven options like distributed energy resources and demand response. OPC has stated these principles in meetings at PJM and in comments filed with FERC. OPC will continue to work with other government agencies, and regional and

national stakeholders, to develop a grid that is consistently reliable, resilient, and affordable for District ratepayers.

information about their projects so OPC and other stakeholders can more effectively evaluate the ratepayer benefits.

LOWER TRANSMISSION COSTS THROUGH COMPETITIVE COST CONTAINMENT Covering the cost of the construction, operation, and maintenance of transmission lines is the fastest growing portion of ratepayers’ wholesale electric bills. To help control transmission costs, OPC and LS Power, a transmission and generation developer, introduced a proposal at PJM to bring much-needed clarity and competition to PJM’s transmission planning process. Among other provisions, transmission developers would be required to disclose

In the spring of 2017, PJM committees approved OPC’s proposal by wide margins. Other consumer advocates, municipal power companies, and some transmission owners, including Exelon, the parent company of Pepco, also gave its support. Over the next year, OPC will work with PJM to implement this proposal as part of its planning process. Easing the Energy Burden, OPC’s leadership will reduce ratepayers’ exposure to construction cost overruns and avert frequent transmission rate hikes.

2017-2018 PUBLICATIONS KNOW YOUR UTILITY CONSUMER OPC-DC RIGHTS Office of the People’s Counsel ADVOCACY | EDUCATION | PROTECTION

A DC Consumer’s

Guide to GoinG Solar

The Consumer Bill of Rights provides safeguards for consumers of natural gas, electricity, and telecommunications services in the competitive utility markets in the District of Columbia. The CBOR defines the relationship and responsibilities of both utility service providers and consumers.

A Consumer’s Guide to Third Party Suppliers

The

POWER Of

OPC Advocates, Educates and Protects Utility Consumers

How to Read Your Electric Bill

Following are highlights of several important CBOR sections (§):

ADVOCACY Office of the People’s Counsel

1133 15TH STREET NW SUITE 500 WASHINGTON DC 20005 202-727-3071 TTY-TTD 202-727-2876

STARTING UTILITY SERVICE:

Utility representatives must produce Identification to consumers. §313.1

WEB | WWW.OPC-DC.GOV

Social security numbers are not required to initiate service. §308.1

facebook.com/DCPeoplesCounsel

Utilities cannot require first-time customers to pay a security deposit. §307.7

twitter.com/dcopc

When a deposit is required, it must be no more than $100. §307.7

BILLING:

Customers must receive a bill at least once during each billing cycle. §304.1

A publiCAtion of the DC offiCe of people’s Counsel april 2018 A DC Consumer’s guiDe to solAr

Because of the wide variety of possible billing options, your bill may differ slightly from these examples. Please contact OPC’s Consumer Services Division for more information.

1 9 75 – 2 0 18

1

A DC Consumer’s Guide to Going Solar

19

The Office of the People’s Counsel has prepared this guide to help consumers understand the charges and fees that appear on utility bills in the District of Columbia.

Utility payments are due 20 days after the date the bill is rendered. §305.1

Know Your Utility Consumer Rights

Office of the People’s Counsel

A Consumer’s Guide to Third Party Suppliers

How to Read Your Utility Bills

The Power of Advocacy: OPC History Highlights 1975-2018


PROMOTING A SAFE AND SUSTAINABLE ENVIRONMENT From the beginning of the agency’s existence, OPC has promoted the value of energy efficiency to help consumers, particularly for low- and moderate-income residents, save money on utility bills. The advent of solar technology now offers consumers not only energy savings potential but also substantial environmental benefits for society. Through our education and outreach to community organizations and places of worship, OPC works to expand access to renewable energy options citywide.

EXPANDING SOLAR ACCESS TO DC RATEPAYERS The Office of the People’s Counsel is committed to exploring new technologies, methods, and tools to promote clean, affordable, and reliable energy in the District of Columbia. OPC has taken numerous steps to empower DC ratepayers and ease their energy burdens through our advocacy. OPC’s advocacy includes innovative and comprehensive consumer education and outreach initiatives. In response to increasing consumer demand for renewable energy resources, OPC developed “A DC Consumers’ Guide to Going Solar” in conjunction with the Clean Energy States Alliance (CESA). The new publication covers topics such as the environmental benefits of solar-generated electricity, owning versus leasing solar panels, tips for finding a contractor, and opportunities

for participating in a community solar project. The Office’s goal is to inform and empower consumers, particularly residents of underserved communities, who are considering whether to go solar. Expanding access to solar extends beyond OPC publications. As an extension of the Value of Solar Study commissioned by OPC and released in April 2017, the Office won a grant in partnership with CESA, a national nonprofit coalition of public agencies working together to advance clean energy. The partnership is designed to develop a tool or methodology that will permit the identification of locations that are prime targets for solar expansion. OPC plans to use the research and tools developed in the CESA project to inform ratepayers, policymakers, and other stakeholders on integrating solar and other renewable energy technologies into the grid.

2017 Annual Report

20


METHODOLOGY FOR IDENTIFYING LOCATIONS FOR SOLAR EXPANSION OPC and CESA are working together to develop a tool or methodology to help identify areas within the District where the deployment of solar and battery storage can result in:

1

The maximum value of reduction in electricity costs for consumers by cutting the demand for energy from the grid and associated consumption;

2

The maximum cost savings through distribution system upgrades; and

3

A reduction in power outages and improvements in reliability.

21

Office of the People’s Counsel

OPC is working daily on Promoting a Safe and Sustainable Environment, with the goal of Easing the Energy Burden for all consumers across the District of Columbia.

ADVANCING ENERGY EFFICIENCY, SAVING YOU MONEY Faith-based institutions have opened their doors to OPC in an effort to obtain information about energy efficiency and renewable energy programs to reduce their energy bills and those of their members. “Energy Efficiency Days in the Community” was among the outreach initiatives OPC launched to share information about a variety of District-sponsored rebates and programs that groups can use to save energy and money on utility bills. In 2017, several faith-based institutions held community days, including Good Success Christian Church and St. Luke Baptist Church, both in Northwest. DC government agencies and community organizations presented hands-on demonstrations and workshops on energy assistance programs, weatherization projects, the consumer complaint process, and community health initiatives, among other useful programs. OPC is working with several District churches to educate community members about no-

cost solar installation opportunities under the DC Department of Energy & Environment’s Solar for All Program. The faith-based initiative is in its initial phase of gathering applications and assessing whether their roofs are suitable for solar installations. Possible groundbreakings are targeted for Spring 2019. OPC continues to explore affordable energy efficiency and renewable energy options to help faith-based groups, particularly those with limited funds, realize energy savings. In early 2018, OPC stepped up its outreach to solar energy providers by inviting them to a “Fireside Chat” with People’s Counsel Sandra Mattavous-Frye and staff in OPC’s Energy Efficiency and Sustainability Division. The gathering was an opportunity for the providers to share initiatives they are undertaking to benefit solar consumers. Getting provider perspectives on solar energy services and trends can help OPC efforts to educate underserved communities about solar energy options. Promoting a Safe and Sustainable Environment, OPC believes such dialogue can have a positive impact on the quality of life of present and future generations.

PUSHING DC PLUG FORWARD Construction on the District of Columbia Power Line Undergrounding Initiative (DC PLUG) is currently scheduled to begin in


November 2018 after various roadblocks, including a court challenge, which have delayed its original June 2015 start. Along the way, OPC has worked to facilitate progress toward getting shovels in the ground. Following passage of the Electric Company Infrastructure Improvement Financing Act of 2014, DC PLUG called for Pepco and the District Department of Transportation (DDOT) to place several dozen of the electric company’s most-vulnerable overhead power lines underground in Wards 3, 4, 5, 7, and 8 to prevent storm-related outages. OPC worked to facilitate the creation of a safe, reliable, and sustainable environment. To move the project forward, in 2017, OPC worked steadfastly with other stakeholders to draft an amendment to the authorizing law. The amendment was necessary to overcome the last remaining impediment to construction, a stakeholder’s claim that one of the original surcharges planned to finance the project was an impermissible tax. The amendment became law on May 19, 2017, and substantially changed several aspects of DC PLUG. Approximately

30, rather than the original 60, overhead power lines will be undergrounded. Because of the amendment, the project will now last for approximately six years, with the possibility of an extension, instead of the originally forecasted 10 years, costing $500 million instead of the original projection of $1 billion. DDOT’s construction costs will no longer be paid through a bond issuance. Instead, the District will assess monthly construction costs on Pepco, which Pepco will remit to the District and subsequently recover from ratepayers. Because of OPC’s efforts, residential consumers will be shielded from covering costs related to revenue not recovered from other types of Pepco customers (e.g., commercial customers). In addition, Pepco and DDOT are now required to file twoyear construction plans with the PSC for approval, rather than the three-year plans previously required. The American University Park and Friendship Heights neighborhoods in Ward 3 are expected to see the first DC PLUG construction, currently estimated for completion in January 2020.

Partner Testimonial/DC Council Testimony Victoria Leonard, Laborers’ International Union of North America (LIUNA)

“OPC is a tremendous resource and does a great job representing the District’s residential ratepayers. OPC staff, under the leadership of Sandra Frye, is accessible, skilled, and insightful—they are really good at what they do and are a fantastic asset.”

2017 Annual Report

22


AGENCY FUNDING SOURCE OF FUNDS Funding for the Office of the People’s Counsel is provided through two sources: I. Appropriated Budget II. Assessment Funds. All funds are paid by DC utility ratepayers.

APPROPRIATED BUDGET (OPERATING FUNDS) The appropriated budget provides for administrative and general operating expenses for OPC (rent, salaries, equipment) and is authorized by the District of Columbia in the government budget review process. OPC’s fiscal year 2017 appropriated budget was $7,497,285. Appropriated funds are also used to support additional activities such as: I. Representing the interests of District consumers before the DC Council, Congress, and federal courts and agencies;

23

Office of the People’s Counsel

II. Conducting independent investigations or audits of utility companies; III. Monitoring the implementation of utility rates; and IV. Providing technical assistance to community groups. By law, these funds must be reimbursed to the District by the three regulated utility companies and the alternative energy and telecommunications providers according to an established formula, outlined in the Public Utility Reimbursement Fee Act, DC Code §34-912(b)(1).

FORMAL CASE ASSESSMENTS Assessment funds are used to pay the costs of litigation and investigations. OPC assesses the affected utility and the utility can recover those costs directly from consumers through rate increase cases. To fully participate in complex litigation before the Public Service Commission and the courts, the People’s Counsel is authorized to retain the professional services of attorneys and expert technical consultants such as economists, accountants, and engineers, as needed, to effectively represent

DC utility consumers. By law, the affected utility company is required to pay a special franchise tax to cover the costs of regulatory litigation by OPC. In turn, the law recognizes that the utility may include these costs, as well as its own litigation-related expenses, as operating expenses that can be recovered from consumers through rate increase requests. OPC must adhere to monetary limits in imposing assessments on the utilities. In a rate case, the Office is permitted to assess the utilities no more than a total of one-quarter of one percent of a company’s net investments in plant operations, which is referred to as “rate base.” With respect to all other cases or investigations (those involving the setting of rates), OPC is permitted to assess onetwentieth of one percent (five cents on $100) on a company’s rate base during a calendar year. By law, unused money is returned to the utility.


AGENCY STAFF DIRECTORATE

Sandra Mattavous-Frye, Esq. People’s Counsel Eric W. Coard Chief of Staff Karen R. Sistrunk, Esq. Deputy People’s Counsel Doxie A. McCoy Public Information Officer Dionne Johnson Calhoun Executive Assistant Phillip G. Harmon Policy Analyst Pamela Nelson Energy Efficiency Outreach Specialist Alya Solomon Consumer Affairs Liaison

OPERATIONS DIVISION Eric B. Scott, Esq. Chief Business Operations Officer Cherry Belle Administrative Officer Erica C. Bright Administrative Specialist, Training Coordinator Anthony T. Lee Information Technology Computer Specialist

Aniccia Miller Human Resources Specialist

Jean Gross-Bethel Consumer Outreach Specialist

Gurmeet K. Scoggins Agency Fiscal Officer

Erica Jones Consumer Outreach Specialist

Alicia Smith Financial Specialist

Stephen E. Marencic Jr. Consumer Outreach Specialist

TECHNICAL DIVISION

Cheryl Morse Consumer Outreach Specialist

Naunihal Singh Gumer Regulatory Finance Director

Yohannes K.G. Mariam, Ph.D. Senior Economist, Market Monitoring Specialist Jason Cumberbatch Electrical Engineer Christopher K. Sellers Contract Specialist

CONSUMER SERVICES DIVISION Aaron Ward Consumer Services Director Laurence F. Jones Senior Policy Analyst Linda H. Jefferson Senior Consumer Outreach Education Specialist Keishaa Austin, Esq. Program Analyst CharQuia M. Barringtine Administrative Assistant Denise Blackson Community Outreach Specialist Silvia Garrick Consumer Outreach Specialist, Hispanic Coordinator

LITIGATION SERVICES DIVISION Laurence C. Daniels, Esq. Director of Litigation Travis Smith, Esq. Supervisory Attorney Barbara Burton, Esq. Assistant People’s Counsel, Senior Attorney Anjali G. Patel, Esq. Assistant People’s Counsel, Senior Attorney Frederick J. Heinle, III, Esq. Assistant People’s Counsel Thaddeus Johnson, Esq. Assistant People’s Counsel Kenneth Mallory, Esq. Assistant People’s Counsel Adrienne Mouton-Henderson, Esq. Assistant People’s Counsel Arick Sears, Esq. Assistant People’s Counsel Tamika Dodson Paralegal Dwayne C. Houston Litigation Assistant

*This list includes employees on staff in 2017 to date.

2017 Annual Report

24


STAFF WELLNESS In keeping with the DC Department of Human Resources’ employee wellness initiative, OPC launched a workplace wellness program. Led by Deputy People’s Counsel Karen Sistrunk, the OPC Wellness Committee introduced employees to various activities with the goal of building a healthier, more productive workforce. Activities and initiatives included hiking, nutritional eating, Zumba and dance fitness classes.

25

Office of the People’s Counsel


OPC STAFF PARTICIPATING IN TEAM BUILDING ACTIVITIES

Participating in “ACT to End Racism” program on the National Mall.

Joining the city’s “Wear Orange Day” to raise awareness about gun violence.

Selfie Time!

2017 Annual Report

26


“Rocking the Red,” for the Stanley Cup Champion Washington Caps.

Gathering after wellness activity.

Observing “National Wear Red Day” in support of women’s heart health.

27

Office of the People’s Counsel

Discussing Dr. Martin Luther King, Jr.’s legacy on the 50th anniversary of his death.


OPC partners with DC Public Schools, the Department of Parks and Recreation, and community groups to provide energy efficiency workshops for youth.

2017 Annual Report

28


Office of the People’s Counsel 1133 15th Street NW Suite 500 Washington, DC 20005

info@opc-dc.gov

@DCPeoplesCounsel

www.opc-dc.gov

@opcdc

202.727.3071

@DCOPC

202.727.2876

Profile for Office of the People's Counsel

The 2017 Annual Report  

The 2017 Annual Report of the Office of the People’s Counsel: “Protecting Consumers, Easing the Energy Burden, and Promoting a Safe and Sust...

The 2017 Annual Report  

The 2017 Annual Report of the Office of the People’s Counsel: “Protecting Consumers, Easing the Energy Burden, and Promoting a Safe and Sust...

Profile for opcdc7