Pennsylvania PUC: Dan Mumford

Deck: 

A Day at Pennsylvania Public Utility Commission

Fortnightly Magazine - February 2018

PUF’s Steve Mitnick: Dan, what do you do here?

Dan Mumford: Since 2016, I have served as the director of the Office of Competitive Market Oversight – usually referred to as OCMO. OCMO was created in 2009 and is housed within the commission’s Office of the Executive Director.

I have the honor to lead a dedicated and talented group of legal, technical and policy staff members from various commission bureaus and offices to informally address obstacles faced by energy suppliers participating in the retail market.

OCMO is responsible for responding to questions from stakeholders regarding the competitive energy market, monitoring issues hindering the development of a competitive retail market and facilitating informal dispute resolution between utilities and energy suppliers. We’re here as a resource for all the entities in our market place, to consider things informally, and see what we can do.

As an example, there can be occasional problems with the data exchange that goes on between the utilities and suppliers. There’s an awful lot of data involved. Metering data, billing data. Things can occasionally go wrong in that process. When those things go wrong, it can impact customers directly. It’s in everyone’s best interest to get those kinds of issues resolved as quickly as possible.

Doing it informally through our office allows for that, instead of going through the conventional complaints and dispute process. We’re often able to get a much quicker resolution.

PUF: Maybe it’s something as simple as a technology upgrade?

Dan Mumford: Yes. For example, either a supplier or utility may change their information systems. Everyone must upgrade their systems every now and then. When that happens, sometimes something gets overlooked and leads to a problem.

We then look into it and get the parties talking to each other. Every now and then we may have to do some prompting and prodding. And I am glad to report that this informal approach usually works. However, if something is going wrong and is not being resolved, we do have other, more formal, resources available to us, such as our enforcement staff and prosecutors. 

Fortunately, it rarely comes to that. Our utilities and suppliers seem to understand, especially when it’s something involving the customers, that it’s in everyone’s best interest to get things resolved as quickly and informally as possible. Also, our commissioners and commission management have always been very supportive of our efforts and are there for us if needed.

PUF: Do you also do a lot of work in terms of looking at regulations and disclosures?

Dan Mumford: Yes. Disclosure and consumer protection regulations are of paramount importance. 

Our market was one of the first to open up back in the ’90s. The market kind of went away there for a while after the turn of the century. Then our rate caps came off around 2010. We looked back at what we did back in the ’90s. What worked? What didn’t work?

We realized that one of the things we needed to do a better job with was communication. First, we created this office, OCMO, specifically intended to handle competitive matters, and to maintain routine contacts with the utilities and suppliers.

Another thing we had to do was create a working group. We call it “CHARGE” (Committee Handling Activities for Retail Growth in Electricity), and it consists of suppliers, utilities and advocates. We have a distribution list that we use to keep everyone regularly updated as to what’s going on. If something comes up of an urgent nature, we have conference calls.

Right now, we’re planning an in-person workshop for all the residential suppliers. We’re bringing everyone in, including the utilities, to sit down for an entire day. A lot of it’s just the basics and orienting them to the PUC: what we do here, explaining our procedures concerning licensing and bonding and complaints.

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We also plan on discussing our marketing and disclosure rules, and reminding everyone of how we expect them to interact out there with customers. It’s going to be a two-way discussion. They’ll have an opportunity to question us and provide comment on some of our current proceedings. This includes looking at our disclosure rules again. That’s another lesson we learned from the ’90s – that we needed to do more on disclosure.

PUF: Why is that important?

Dan Mumford: We needed to do more with marketing and disclosure. We had very few rules governing residential marketing. We remedied that in 2012 by promulgating rules – especially concerning door-to-door and telemarketing.

We used a collaborative process, giving all stakeholders a voice to first develop guidelines in 2010, followed by permanent regulations in 2012. This included a requirement that when a supplier enrolls a customer, they must have a verification procedure to make sure that it is indeed a good sale. That’s been a success.

We also updated our disclosure rules in 2014. The more we can do with disclosure, providing customers with the information they need in an understandable format that allows them to compare various supplier offers, the better.

The challenge we’re now facing, as we move into the smart metering era, is how do we tailor rules that will allow smart-metering products to be explained to customers? While at the same time, not inhibiting the new products by structuring such rigid rules that we basically make some products impossible to sell?

PUF: Such as, what’s the price of a time of use rate?

Dan Mumford: Right. You have a time of use product. How do you present that in an apples-to-apples way to allow consumers to make comparisons? That’s going to be our big challenge, going forward.

PUF: Many other states have smart meters. Are they being deployed now in Pennsylvania?

Dan Mumford: We’re in the middle of deployment. They’re not going to be fully deployed until around 2019, or 2020.

PUF: Last week I hosted a roundtable of people in Houston discussing the Texas markets. How’s that working, what are the real strengths. How is the Pennsylvania market? Are people generally happy with it?

Dan Mumford: Big picture, we have a very successful market, but we realize there are pockets, such as the residential markets, where we have some softness.

Our residential shopping numbers have plateaued. We had modest increases back in 2016. In 2017 it was a modest decrease. In the residential segment, we’re in the thirty to forty percent range.

Another lesson we learned was that we needed a shopping website and we created www.PAPowerSwitch.com. We didn’t have that back in the ’90s. We think that’s been a big help in providing consumers with consumer education and a neutral marketplace where consumers can compare supplier offers and shop.

Another innovation was the creation of our standard offer programs. Consumers can now contact their electric utility and simply enroll with a supplier at a fixed price for twelve months with no cancellation fees involved. 

PUF: What’s an average day like?

Dan Mumford: It’s a steady rain of phone calls and emails with questions, little problems and some not-so-little problems. Also, meeting and coordinating with the OCMO team to get their input and making sure we are getting accomplished what needs to be done.

I could not do any of this without working with OCMO Deputy Director Kriss Brown and my talented OCMO colleagues.

There is of course the common frustration of finding the time and the balance between handling the day-to-day concerns and the big-picture strategic items.

PUF: What would be a top strategic item?

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Dan Mumford: A good example is our natural gas market, where our competitive market is admittedly less robust than on the electric side. We’re looking at what we can do about that, like speeding up the switching time frames, which we did in the electric market back in 2014.

Pennsylvania was a leader when we brought three-day switching to the electric market. In natural gas, that’s a process that can still take weeks. Also, there are a lot of behind the scenes things with natural gas, such as the capacity assignment, balancing, penalties and tolerance bands. We’re looking at what we can do about that.

A lot of the suppliers are pushing for greater uniformity and greater equity. We are going to be convening a technical conference soon to explore those issues further, because we recognize we have a lot of work to do in the natural gas market.
 

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