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Retail Supplier Sees Higher Attrition As a Result of Utility Welcome Letters to Inorganic Customer Acquisitions; Asks PSC to Cease Letters Since No 'Enrollment' Occurred
Citing an increase in attrition from utility enrollment notification letters sent to customers being served by a new supplier after the acquisition of a customer book, NRG Residential Solutions has requested that the Maryland PSC direct Baltimore Gas & Electric to cease issuance of such letters in such circumstance, given that no customer enrollment is occurring.
NRG Residential Solutions recently acquired the electricity customers of Dominion Retail.
As NRG Residential has moved these accounts to its supplier certificate and service in certain states, utilities, in some cases due to existing technical processes, have generated the standard utility customer switch letters sent out to customers who make a new choice in their electric supplier.
NRG said that such letters are inappropriate, as the customer's contract is only being assigned, as permitted under the contract. The letters cause confusion, NRG said, as the customer did not request a switch and is not enrolling onto a new contract.
NRG said that based on its experience in Pennsylvania and Ohio where utilities sent out new enrollment letters to customers being switched from Dominion Retail to NRG as a result of the assignment process, NRG saw a, "large uptick in drops."
"[A]fter active outreach to those customers that dropped to question why they had dropped," NRG determined that, "the receipt of the New Enrollment Letters by customers in those jurisdictions was causing a much higher incident of customers switching back to default service than in jurisdictions where no utility New Enrollment letters were sent."
"Based on its customer outreach, NRG Retail has determined that the New Enrollment Letters caused customer confusion, with many customers thinking they had been slammed because, contrary to what the New Enrollment Letters suggest, the customers had not made a selection of a new supplier," NRG said.
"The high attrition rates experienced elsewhere, and in Maryland should the letter not be suppressed, could potentially significantly decrease the value of NRG Retail's investment in the Dominion book of business," NRG said.
"After alerting the Commissions in Pennsylvania and Ohio of the situation, both Commissions informally advised the utilities that the requirement for the New Enrollment Letters did not apply in the case of an assignment of customers and advised those utilities to suppress the letters. Those utilities very quickly devised a solution that would allow them to suppress the letters, and they are working with NRG Retail to coordinate the transition of the Dominion customers and suppress the letters," NRG reported.
NRG has similarly asked Baltimore Gas & Electric to suppress issuance of a new enrollment letter, but said that BGE has declined the request. NRG said that it offered to pay any needed programming changes to facilitate the suppression.
NRG argued that the language of COMAR does not compel BGE to send the new enrollment letter in this instance, because the customers are continuing their existing supplier service and contract, only as assigned to NRG. "There is no new agreement between the customer and the supplier. These circumstances do not amount to enrollments as that term is defined or contemplated under the COMARs, and the COMARs do not require notice from the utility to the customer," NRG said, in asking that the PSC enjoin BGE from sending such enrollment letters to the at-issue customers.
What we also found interesting was that NRG said that, "In other jurisdiction, including those in which the New Enrollment Letters were not sent, the utility agreed to provide its CSRs with 'talking points' for use in responding to inquiries about the Dominion/NRG Retail transaction. NRG Retail recommends that the Commission require BGE to do the same, and NRG Retail is committed to working with BGE to draft language for sharing with BGE's CSRs."
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June 17, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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