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Here's How All ESCO Mass Market Sales Pitches Must Start in New York, and What TPVs Must Cover

February 26, 2014

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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The New York PSC's written retail markets order details the specific sales introduction that ESCOs must now use in mass market sales, and specifies what the newly required independent third party verifications must include

"To help address continuing complaints of customer confusion regarding who ESCO marketers represent," the PSC will require that marketers begin in-person and telephonic interactions with a potential customer, at locations other than the ESCO's place of business, with the following specific disclosure statement: "My name is ____. I represent [ESCO name]. [ESCO name] can provide you with your electricity and/or natural gas. I do not work for or represent your utility.”

"This disclosure statement must be delivered immediately after any introductory greeting. This statement shall be used by all ESCOs, ESCO representatives, and ESCO agents, in all in-person interactions with potential customers at locations other than the ESCO's place of business, where the interaction is for the purpose of describing, marketing or selling any product or service offered by the ESCO," the PSC said.

"The disclosure statement must also be used in all telephonic interactions with potential customers," the PSC ordered.

Story Continues Below...

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Despite calls from certain consumer interests, the PSC did not ban door-to-door sales. However, "[w]e reiterate our continuing concern with door-to-door marketing of energy services. We affirm that we have ample statutory authority to impose additional requirements upon entities conducting such marketing. We shall not hesitate in imposing additional requirements on ESCOs conducting door-to-door marketing, where warranted," the PSC said.

Regarding the independent third party verification now required of mass market door-to-door and telephonic sales, the PSC requires that the TPV be conducted by an entity that: (1) is not owned or controlled by the ESCO, its parent, affiliates or agents; (2) whose compensation is not related to whether or not the ESCO enrollment is confirmed; and (3) is in a location that is physically separate from the ESCO, its parent, affiliates or agents.

In addition, the TPV must be between the independent verifying entity and the potential ESCO customer, without participation by the ESCO or its marketing representative.

"Ideally, the TPV would be made several hours after the marketing agent has left the residence," though the PSC did not set an explicit cooling-off period prior to conducting the TPV

"The call must also be recorded and the recording kept for the longer of two years or the duration of the sales agreement," the PSC said.

The PSC stressed that while only door-to-door and telesales must be TPV'd, if a customer's agreement is via electronic means, but the customer was marketed to at least in part through door-to-door marketing, then that customer's agreement must be confirmed through independent TPV before the ESCO may enroll the customer. In other words, ESCOs cannot market door-to-door, but enroll the customer online through a tablet, rather than written contract, to avoid the TPV requirement

The verification itself shall require that TPV entities ask and receive an affirmative response from the customer, at a minimum, to the questions contained in the revised UBP Section 5, Attachment 1, which are listed below [Note: Certain TPV items appear duplicative in light of new additions, but the items below represent the list as contained in the revised UBPs in the PSC's order]:

1. A statement that the conversation is recorded and that oral acceptance of the ESCO's offer is an agreement to initiate service and begin enrollment;

2. A question to the customer asking if he or she understands that the specific ESCO is not the distribution utility.

3. A statement from the customer verifying the customer's name, postal and any email address (if the customer chooses to provide it), distribution utility customer account number, and any additional information needed to verify the customer's identity.

4. A statement from the customer that he or she has authority to make changes to this account.

5. A question to the customer inquiring if the ESCO marketing representative began his or her interaction by stating his or her name and that he or she represents the ESCO, not the customer's utility, and an affirmative response from the customer.

6. A question to the customer inquiring if the ESCO marketing representative provided the customer with the ESCO's contact information in written form, and an affirmative response from the customer.

7. A question to the customer inquiring if the ESCO marketing representative provided copies of, or access to, the ESCO Consumer Bill [of] Rights, and an affirmative response from the customer.

8. A question to the customer asking if the ESCO marketing representative explained that the price of ___ (electricity and/or natural gas) is ___ under the contract, and an affirmative response from the customer.

9. A question to the customer asking if the ESCO marketing representative explained that the contract term is for __ months and that the early termination fee (if any) is __, and an affirmative response from the customer.

10. A question to the customer asking if the ESCO marketing representative stated whether savings were guaranteed, and a response from the customer. If the customer states that the ESCO marketing representative guaranteed savings, a question to the customer of what savings were guaranteed, and a response from the customer.

11. A description in plain language of the prices, terms and conditions of the ESCO's offer, including a statement of the circumstances, if any, under which the ESCO may assess an early termination fee and the amount of any such assessment or how the assessment is calculated;

12. If savings are guaranteed, or guaranteed under only certain circumstances, the ESCO must provide a plain language description of the conditions that must be present in order for the savings to occur;

13. A statement from the ESCO that energy supply will be provided by the ESCO, and that energy delivery shall continue to be provided by the customer's utility; and that said utility will also be available to respond to leaks or other emergencies should they occur;

14. A statement from the customer, in response to a question from the verification agent, accepting such terms and conditions

15. A description of the types of information that the ESCO needs to obtain from a distribution utility or MDSP and the purposes of its use, a request that the customer provide authorization for release of this information, and the effective duration of the authorization;

16. A statement from the customer providing such authorization;

17. A statement from the customer, in response to a question from the verification agent, that the customer has or has not already received a written copy of the sales agreement.

18. If the customer affirms that he or she has already received a written copy of the sales agreement, a statement that a residential customer may rescind the agreement within three business days after the date of the verification call.

19. If the third party verification is one required for a written or electronic agreement, a statement of the customer, in response to a question from the verification agent, that the customer has signed and/or submitted the sales agreement.

20. If the customer does not affirm that he or she has already received written copy of the sales agreement, then, a statement in plain language that a customer will receive a written copy of the sales agreement by mail, e-mail or fax; that a residential customer may rescind the agreement within three business days after the latter of the date of its receipt, or the date of the verification call; how such rescission can be accomplished, and that in the absence of such rescission, an enforceable agreement will be created; a statement that a customer may rescind the authorization for release of information at any time; provision of a local or toll-free telephone number or e-mail address to the customer for these purposes; upon cancellation of the agreement, the ESCO shall provide a cancellation number to the customer during the telephone call or in response to an e-mail message; and

[sic] A statement from the customer verifying the date and time of the verification telephone call

Case 12-M-0476

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