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Dominion Retail Seeks Stricter Supplier License Requirements in Pennsylvania
June 9, 2011
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The Pennsylvania PUC, "should make it more difficult to get away with entering the market if not prepared, and should make it harder for any EGS [electric generation supplier] to engage in conduct that is not fair to customers," Dominion Retail said in comments to the Pennsylvania PUC, in the PUC's investigation of default service.
As an initial matter, Dominion Retail said that the PUC must take a harder look at new EGS applicants and existing licensees, "to make sure that their bonding levels are sufficient when compared to the number of customers and the level of risk posed by an EGS."
Dominion Retail said that the requirements may need to be increased to satisfy potential judgments or other defaults, so that customers can be made whole if the supplier becomes insolvent or suddenly exits the market in the future. Dominion Retail said that in the most significant retail supplier defaults in Pennsylvania since the onset of competition, the bonds of both early exit/defaulting companies were not sufficient to even cover the taxes owed to the Commonwealth, let alone to satisfy the customers who did not receive the savings to which they were entitled.
Dominion Retail suggested that the bonding requirements could consider the supplier's number of customers, current market prices, and other market risk factors, to develop supplier-specific bonding levels.
"Companies seeking to become licensed EGSs in Pennsylvania should also be required to more thoroughly demonstrate financial and technical fitness in order to obtain a license," Dominion Retail added.
Additionally, Dominion Retail said that the Commission, "needs to move more quickly and perhaps more aggressively on door-to-door marketers," stating that, "insidious problems come from the coercion and deception that often accompany door-to-door marketing and multi-level marketing."
"[H]igh pressure door-to-door sales significantly damaged the competitive market in Illinois, even though the offenders were few," Dominion Retail said, presumably referencing the retail gas market.
Dominion Retail also cited "questionable conduct" such as, "pricing a service in a way that implies a price or discount that is contrary to what is being offered, often through such means as stating a price 'without gross receipts tax,' or stating that the customer will receive an approximate XX% discount, implying that the product is calculated as a discount off the price to compare when in fact it is a variable-priced product that has nothing to do with the price to compare."
Dominion Retail additionally sought greater disclosure of teaser rates.
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