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Connecticut Adopts New Customer Notice Requirements, Forms for Suppliers, Says Generic T&Cs Not Compliant

November 6, 2014

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

The Connecticut PURA has adopted forms and associated requirements to be used for several statutorily required notices to be sent by retail electric suppliers, adopted new product definitions, and clarified several rules, including a finding that sending generic terms and conditions do not meet certain statutory mandates.

PURA adopted new product definitions as follows:

A Fixed plan requires the rate to be fixed for at least four complete billing cycles.

Each Variable plan must specify whether the rate can change daily, weekly (i.e., during the customer's billing cycle) or monthly (i.e., on the customer's meter read date) and will be identified as Variable-Daily, Variable-Weekly or Variable-Monthly, respectively.

The Authority said that it will require suppliers to adjust rates with the On-Cycle meter read date for all rate plans except Variable-Daily or Variable-Weekly, which allow prices to change during the billing cycle. However, PURA removed language from an earlier draft about the specific deadline for submission of on-cycle rate changes.

PURA also adopted templates that suppliers must use for new notices required by statute, specifically: (1) quarterly rate notices; (2) notice at the end of a fixed rate term; (3) notice when a customer is to be billed a variable rate; and (4) notice when a customer's rate will increase by 25% or more.

Notably, quarterly rate notices may only be sent by United States mail.

Additionally, for all other notices, the supplier must offer the customer a choice from all of the following methods to receive the notice: United States mail, electronic mail, text message, an application on a cellular telephone or a third-party notification service approved by the Authority.

Due to the volume of information to be conveyed, these notices are not conducive to text messaging, PURA said. Therefore, if a customer opts for text messaging, the notification must state, at minimum: (1) "Your electric generation rate is [increasing/decreasing] to [the new rate];" (2) the effective date of the increase/decrease; and (3) a link the customer can click and go directly to the full notification. Electronic mail must provide the required information and cannot direct consumers to another location (i.e., supplier's website) to access the information, PURA said.

The notices are required to be sent as follows:

                            When Required

Quarterly Notice             December 2014   
                             March 2015   
                             June 2015   
                             September 2015

End of Fixed Rate Plan       No later than 30-60 days
                               before end of fixed 
                               contract

Variable Rate                45 Days before assessing
                               Variable Rate

25% Rate Increase            15 days prior to new rate

See PURA's final decision (click here) for each notice template (starting on page 40) and the required information on each type of notice

Notably, the quarterly rate notice requires the supplier to disclose, "The dollar amount that would have been billed for the electric generation services component had the customer been receiving standard service."

"This provision is specific to the customer and therefore, the customer's specific usage and bill amounts must be calculated and provided," PURA said.

PURA clarified that the requirement that the customer be provided a written copy of the contract cannot be fulfilled by sending a generic terms and conditions (such as after telephonic verification); the contract must be customer-specific and include all material terms and conditions, including rate, start date, and expiration date.

"A generic Terms and Conditions, standing alone, would not qualify as a written contract as contemplated by Conn. Gen. Stat. §16-245o(f)(2)," PURA said.

"[T]he Authority hereby clarifies that, pursuant to Conn. Gen. Stat. §16-245o, prior to the initiation of electric generation services, each customer must be provided a written copy of the contract, and each contract must contain a beginning and a renewal or expiration date of the contract," PURA said.

Generic T&Cs also cannot be used for record retention compliance. The Authority clarified that, as used in the statute, "records of such signed service contract or consent to service" means, "the actual copy of the contract signed by or provided to the customer in accordance with this provision, and that a generic form will not be sufficient."

PURA emphasized contracts must have specific expiration dates, and that a contract cannot be for an "indefinite" period of time.

"The record of this proceeding shows that many customers have not been provided proper contracts with expiration dates, as required by law. Instead, the practice for many suppliers has been to 'enroll' customers for an indefinite period of time. Suppliers cannot be allowed to avoid this notification requirement simply because they have failed to provide their customers contracts with expiration dates. This consumer protection must be provided to customers, and therefore this notice must be sent to all customers," PURA said.

Additionally, PURA said that, with regard to any notice or contract requiring the disclosure of rates, such notice or contract must clearly provide the following information:

Fixed plans: must clearly state "The plan will have a fixed rate of [$0.0000/kWh] will be fixed from [date] through [date]. Thereafter, plan will convert to [Fixed or Variable-Daily, Variable-Weekly, Variable Monthly].

Variable plans: must clearly (1) specify Variable-Daily, Variable-Weekly or Variable-Monthly, and explain when the rate can change for each plan; (2) state that past variable rates are available on the Supplier's website at [direct link] and also on the EnergizeCT website [direct link]; and (3) state that "pursuant to Connecticut law, variable rates may be increased 25% at any one time without notice to the customer."

PURA also established requirements for supplier websites as follows:

"To provide adequate information, each Supplier's website is required to clearly display: (1) the supplier's official name and trade name(s), if any; (2) all PURA docket numbers and titles pertaining specifically to the supplier to show its regulatory history in Connecticut, including all licensing and relicensing dockets and history of dockets of companies acquired through mergers or license transfers, and all PURA investigation dockets that have been concluded; (3) customer service contact information, including a phone number at which a live company representative(s) (not an answering service) must be available during normal business hours; and (4) PURA contact information. The website must also list and provide information concerning all generally available offers, renewable products and information about the source of renewable energy (e.g., RECs), standard contracts, and enrollment forms. As discussed herein, the Rate Board must align with all generally available offers."

PURA also clarified the rescission period as follows:

The right to cancel must be provided to any customers with a maximum demand of 500 kilowatts or less, and not just residential customers

The cancellation period is "until midnight of the third business day," not calendar days

Each Supplier must allow the customers to cancel service agreements by email, text, telephone and United States mail, and each method must be clearly communicated to each customer

If a customer signs a contract, such contract must include the following statement in bolded, minimum 12-point font and which must clearly and conspicuously appear immediately above the signature line: "You have the right to cancel this service agreement until midnight of the third business day after the date of this agreement. To cancel this service agreement, you can [provide email address, text number, telephone number and address by which the customer may cancel the contract]."

If a customer's consent is obtained through electronic means including a computer transaction or third-party verification, the Supplier must subsequently provide to the customer a written contract which must include the following statement in bolded, minimum 12-point font and which must clearly and conspicuously appear on the front page of the contract, in the same vicinity as the customer's name, account number, rates, dates of service and expiration date of the contract: "You have the right to cancel this service agreement until midnight of the third business day after the date that you receive this written agreement. To cancel this service agreement, you can [provide the email address, text number, telephone number and address by which the customer may cancel the contract]."

PURA also directed the utilities to offer customers the ability to place a "switch block" on their account, similar to New York

"Providing a 'do not switch' option to customers who wish to remain on Standard Service will provide a cost-effective and convenient way for customers who do not wish to participate in the Supplier market to do so," PURA said.

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