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Proposed Rule Would Require Double Verification of Most Contracts: Signed Contract AND TPV for Telesales, Door-to-Door Sales

October 20, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

Proposed rule changes from the District of Columbia PSC would essentially require double verification of most electric and natural gas sales, adding a written contract requirement to telesales, and a third party verification (or other recording) requirement for door-to-door sales.

Currently, for residential telesales in D.C., authorization must be obtained via TPV or a recording of the entire call.

The proposed rule modifications would retain this requirement, but add to it the following, "Once the Customer's Contract choice is verified by an Independent Third-Party Verifier or an electronic recording is made, the Energy Supplier must within five (5) business days from the day the Customer agreed telephonically to Contract with the Energy Supplier, provide to the Customer via U.S. mail or electronic mail a complete written Contract to be signed, with instructions on how to return the signed contract."

At this time the Energy Supplier shall also provide a copy of the required rescission notice with instructions on how the rescission notice can be filed.

For residential door-to-door and other "personal solicitations," (presumably including event marketing) a signed written contract would no longer be sufficient. For such sales, the supplier would now also be required to obtain either an independent Third-Party telephone verification of the customer's intent to contract, or obtain an electronic recording that records the customer's contract choice and maintain, for the duration of the contract, the entire recording.

The only solicitation method not requiring a double verification (signed contract plus TPV) would be internet sales, which only requires the customer to provide an electronic signature.

Direct mail solicitations would require both a TPV (or recording) and written signature, unless the direct mail solicitation directs the customer to execute the contract via the internet.

The rescission period would be modified to be 3 business days for all sales, except telesales, for which the rescission period would be five business days. Currently, the rescission period is a "3-day period."

Additionally, for telesales, the proposed revisions provide that, "If a residential Customer is solicited to enter into a contract by telephone, the Energy Supplier or its authorized representative must accurately tell the Customer the name of the Energy Supplier that is seeking its business and the name of company making the call if different from the Energy Supplier." (emphasis added).

The proposed revisions would also require that the energy supplier shall include on its website a link to the website of the natural gas utility or electric utility. Energy supplier is defined as including brokers, marketers, and aggregators.

The proposed revisions appear to create an accelerated switching period for electricity (not natural gas), providing that, "The Electric Utility shall transfer a Customer to a competitive electricity supplier in no later than 3 business days, when a Customer applies by Internet, Home, or Other Solicitation, or 5 business days, when a Customer applies by telephone, after receiving the notice of an enrollment transaction from the competitive electricity supplier."

However, since the supplier must wait for the rescission period to expire before it sends a customer's enrollment for the utility, it is unclear why there are different switching timelines based on customer solicitation type. Moreover, it is unclear how the utility will be informed of how the customer applied for service with the supplier to implement these distinct timelines.

The proposed revisions require customers to contact their supplier to cancel a contract. However, the supplier, "shall process a cancellation request for natural gas service in sufficient time to meet the Natural Gas Utility's next available cancellation cycle, or shall process a cancellation request for electric service within two (2) Business Days after receipt of the cancellation request."

The proposed revisions would require that, "At least twenty-four (24) hours prior to making changes to its rates, charges and services, an Energy Supplier shall provide the Commission Secretary with information regarding the changes in its rates, charges and services that are being made so that the Commission has current information about the Energy Supplier."

This is slightly altered from the current language of the rule which provides, "At least 24 hours prior to any change, an Energy Supplier shall provide to the Commission current information regarding changes in its rates charges and services provided."

Related Story Today: Proposed Rule Would Require "Informed" Consent to Enter Into Retail Energy Contract

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