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Door-to-Door Marketing Restrictions, and New Pricing Disclosures Among State's Newly Proposed Supplier Rules (Language Bans Telemarketing Sales?) The Delaware PSC has issued proposed revisions to its electric supplier rules which include new door-to-door marketing restrictions, new pricing disclosure rules, and procedures related to verifications, among other new provisions.
Notably, the proposed rules provide that any door-to-door solicitation at a residential dwelling shall be conducted between the hours of 9 a.m. to 8 p.m. prevailing Delaware time.
Under the proposal, electric suppliers may not permit a person or agent to conduct door-to-door sales and marketing activities until it has conducted a criminal background investigation. The criminal background investigation shall include:
• The Electric Supplier obtaining and reviewing a criminal history record from the Delaware State Police and from every other state in which the person resided for the last twelve (12) months. For a current employee or agent who conducts sales and marketing activities, an Electric Supplier must obtain a criminal history record not later than ninety (90) days after the effective date of the regulation; and
• The Electric Supplier checking the sex offender registry commonly referred to as the “Megan’s Law” registry maintained by the Delaware State Police.
"The Electric Supplier may not hire a Person or Agent for Door-to-Door Sales or marketing who was convicted of a felony or misdemeanor when the conviction reflects adversely on the persons suitability for such employment," the draft rules provide.
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ADVERTISEMENT The proposed rules also include new verification requirements. For verbal verifications, the proposal still does not require use of third-party verification, and alternatively allows the use of a supplier's own audio recording system, provided that the recording includes the entire conversation with the customer.
All verbal contract verifications must include (per the proposal):
• "The Price per kWh, whether the Price is fixed for a period of time or variable, and the length of the contract;" (emphasis added)
• The amount of any cancellation fees and/or any other charges included in Section 2.1.1.9.1.3 of the rules, which also includes monthly base fees or minimum usage fees
• Confirmation that the customer has been given a copy of the Disclosure Statement (emphasis added)
The Disclosure Statement, "means a written disclosure of the terms and conditions of service between an Electric Supplier and a Customer," per the proposed rule (emphasis added).
Accordingly, when read literally, verbal verification of a telemarketing sale, apparently, cannot occur until the customer "has been given a copy of the Disclosure Statement," which as noted above, is a "written" disclosure. This, apparently, would effectively prohibit enrollments via the initial telemarketing call (as the customer would have to first receive the written statement before verification). Though unclear, given that the rules do not emphasize any ban on traditional telephonic enrollments, we believe this is the result of imprecise language, rather than the intent of the PSC's proposal (with compliance permitted by sending a copy of the statement immediately after the call and/or by allowing a verbal recitation of all material in the written statement to be sufficient for enrollment, provided a written copy follows).
For variable rate contracts, the proposed disclosure statement shall identify the initial "price per kWh" and include, "a statement that explains the conditions of variability (stating on what basis and how often Prices may vary) and the limits on Price variability, if any."
Additionally, the proposed rules provide that suppliers offering a variable price product, "shall provide a toll-free number or link on the Applicant’s [supplier's] website where customers may obtain the Price per kWh at least 5 calendar days prior to the Price effective date."
As intimated above, the disclosure statement must include the terminate fee and a, "complete list of any other charges, including, fixed monthly charges and minimum monthly charges."
Elsewhere, the proposed rules provide that, "The Electric Supplier must provide ten (10) calendar days written notice to its Residential or Small Commercial Customer(s) of any price and/or terms of service changes." It was unclear how this provision (which exists under the current rules, only with a 30-day notice rather than 10), interacts with variable price products, and whether a variable price change which conforms to the changes as described in the disclosure statement is not considered a price change requiring such 10-day notice.
In another place, the rules specifically provide that the supplier shall provide the residential or small commercial customer with at least ten (10) calendar days written or e-mail notice of any price changes, "for a fixed Price contract" (emphasis added). E-mail notice may only be used if the customer has provided a valid e-mail address and consent to receive price information via e-mail.
"The Residential or Small Commercial Customer shall have the right to terminate a contract based on a change in Price for a fixed Price contract. Customers choosing a variable Price product with month-to-month changes in Price shall have the right to terminate service with not more than thirty (30) calendar days notice to the Electric Supplier in the manner set forth in the contract," the draft provides.
The draft rules provide that residential and small commercial customers must be notified not less than 30 calendar days in advance of the expiration of the initial contract for a fixed price product if the contract is for a duration of longer than 90 days. The notification should include whether the contract will automatically renew, any change in price, the duration of the contract, or if service will continue on a month-to-month or other basis. Notification shall be provided by written notice or by e-mail provided the customer has chosen to receive communications regarding changes in price from the electric supplier in this manner.
A proposed rule provides that the "bill" shall include, "Price to compare for Electric Supply Service of the Standard Offer Service Supplier." Nothing we see in the rule limits this to a utility consolidated bill, or to small volume customers (in other words, suppliers' dual bills would be required to list the SOS price).
A proposed rule provides that any marketing materials that make statements concerning prices, terms and conditions of service, "shall contain information that accurately discloses the Prices, terms and conditions of the products or services that the Electric Supplier is offering or selling to the Customer."
The PSC proposes that the Commission will consider a supplier license abandoned if the electric supplier does not: (a) begin serving customers within 24 months of the license being granted; and/or (b) file with the PSC the newly proposed yearly compliance filing for two consecutive years.
The proposed rules are being addressed in PSC Regulation Docket No. 49
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August 1, 2013
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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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