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Draft Would Conclude Suppliers Face Difficulty in Complying With Auto-Renewal Cancellation Period, Would Open Proceeding to Set Clear Standard

July 29, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Due to the various cancellation and enrollment standards that are currently in use in the Connecticut market, "it is difficult for all licensed electric suppliers to uniformly apply Conn. Gen. Stat. §16-245o(h)(8)," regarding automatic renewal of residential customers, a draft Connecticut PURA decision concerning a supplier's compliance with the provisions would find

Due to such difficulty, the draft finds that, "there is a need to establish industry-wide standards for the application of this statute," and the draft states an intent for the Authority to address a consistent standard for determining the cancellation period outlined in Conn. Gen. Stat. §16-245o(h)(8) in Docket No. 14-07-20RE01, PURA Development and Implementation of Marketing Standards and Sales Practices by Electric Suppliers - Revised Standards.

"The Authority also finds that it is necessary to adopt clear standards for all licensed electric suppliers to uniformly administer the time period set forth in Conn. Gen. Stat. §16-245o(h)(8)," the draft states

Conn. Gen. Stat. §16-245o(h)(8) provides that under an auto-renewed contract, an early termination fee shall not be charged, "to a customer who terminates or cancels such renewal not later than seven business days after receiving their first billing statement for the renewed contract."

PURA's draft notes that the cancellation period as defined in Conn. Gen. Stat. §16-245o(h)(8) could be applied in a variety of ways to individual customers, depending on their specific enrollment circumstances, the calendar month in which their contract was due to auto-renew and actual meter reading date.

"For example ... a customer’s meter could be read on Monday, February 2, 2015. It is reasonable to conclude that the EDC requires at least two business days to process, print and mail the customer’s bill and that it takes an additional day for the customer to receive the bill in the mail; a total of three business days. Under this scenario, the customer would receive his bill on Friday, February 6, 2015; the date the statutory seven business day period would begin. In this case, seven business days 'after receiving their first billing statement for the renewed contract' allows the customer until Wednesday, February 18, 2015, to cancel the contract and avoid an ETF. This scenario does not take any customer switching options or additional supplier processing time into account," the draft states

Furthermore, the draft notes that where the supplier is not contacted directly by the customer regarding termination, but rather learns of termination through an EDI transaction for a switch or drop to default service, there is no assurance that the EDI notification will identify the date on which the customer contacted the supplier or utility to switch or that the enrollment with the new supplier will be processed within the statutorily prescribed cancellation period

"Suppliers may also require additional time to process an enrollment if the customer provides inaccurate information and in some cases suppliers may hold enrollments for a few additional days in order to submit batches of enrollments for processing. Based on the current process and statutory requirements, it is difficult to determine the exact date on which a customer took action to cancel the contract," the draft notes

Docket 09-04-15RE03

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