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Published Rules Allow Retail Suppliers To Estimate Rate Under Proposed Requirement To Disclose Rate Changes in Advance (Proposed Rules Also Require Notice of Marketing To Be Filed With Utility)

December 29, 2015

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

Proposed new rules for Maryland electric suppliers have been published in the state register, and would allow an electric supplier to estimate the customer's next month rate for purposes of complying with a new advanced disclosure requirement for any change in a residential customer's rate

The Maryland PSC had announced the proposed rules in October (click here for story), and had stated that the proposed rules would require suppliers to make available to customers any rate change at least 12 days prior to the proposed change. However, specific text of the proposal, including whether estimates would be allowed, as previously proposed by the Team Leader draft, was not available until the proposed rules' recent publication in the state register.

Specifically, the published proposal provides that, when a residential customer's rate changes, a supplier shall make available to a customer his or her rate for the next billing period as follows:

(1) The rate shall be made available at least 12 days prior to close of the customer’s billing period;

(2) The rate shall be made available in a clear, easy to access format prescribed by the supplier;

(3) The supplier shall promptly provide the customer written directions on how to access the rate:

          (a) At the time of contracting;

          (b) In the Contract Summary;

          (c) When sending any notice as required by the rules;

          (d) Upon request; or

          (e) If the supplier changes the directions for accessing the rate.

Furthermore, the published proposal provides that, "A supplier may provide an estimated rate for the customer’s next billing period, provided the estimated rate is made available at least 12 days prior to the close of the customer’s billing period. If the supplier provides an estimated rate for the customer, the supplier shall not use a rate for billing purposes that is higher than the estimate."

The published proposal also provides that written notice of the specific change in rate shall be required for residential rollovers from a fixed to variable rate when such rate change exceeds 30%:

(1) If a contract with a fixed rate for three or more billing cycles changes to a variable month-to-month price and a change in the contract rate will be equal to or exceed 30 percent of the supplier’s current supply rate, the supplier shall provide written notice of the new rate to the customer at least 12 days prior to the close of the customer’s billing period.

(2) The written notice shall be provided by mail, or with the mutual consent of the supplier and customer, by email, text, automated phone message or other manner.

(3) The supplier shall maintain records that such notice was provided to the customer.

In other matters, the published proposal provides that at the time of completion of the residential contracting process, a supplier shall provide the customer a copy of the executed contract and completed Contract Summary on the form provided by the Commission. If the contract is completed through telephone solicitation, the supplier shall send the Contract Summary to the customer along with the contract that must be signed by the customer and returned as required by the Maryland Telephone Solicitations Act. If the contract is exempt from the Maryland Telephone Solicitations Act, the supplier shall send the Contract Summary with the contract to the customer, the proposal provides.

The published proposal provides that residential electric contracts must, at a minimum, include a clear and concise price description of each service, including, but not limited to, any condition of variability or limits on price variability. If there is a limit on price variability, such as a specific price cap, a maximum percentage increase in price between billing cycles or minimum/maximum charges per kilowatt-hour for electricity during the term of the contract, the supplier shall clearly explain applicable limits. If there is not a limit on price variability, the supplier shall clearly and conspicuously state that there is not a limit on how much the price may change from one billing cycle to the next.

Additionally, the published proposal provides that when an electric supplier engages in door-to-door activity, the supplier shall notify the PSC's Office of External Relations no later than the morning of the day that the activity begins. The notification shall include general, nonproprietary information about the activity, the period involved and a general description of the geographical area.

Furthermore, the published proposal provides that, "A supplier shall provide the utility with general, nonproprietary information about the door-to-door activity that caused the supplier to provide [the above] notice to the Commission."

"The supplier shall provide this general information to the utility no later than the morning of the day that the sales and marketing activities begin. The utility shall use this information only for acquainting its customer service representatives with sales and marketing activity occurring in its service territory so that they may address customer inquiries knowledgably. A utility may not use the information for other purposes," the proposal provides

The published proposal would provide that, at least 30 days prior to the effective date of any assignment or transfer of a residential electric supplier contract from one supplier to another, the suppliers shall jointly provide written notice to the customers of the supplier, the Commission, the utility, and the Office of People’s Counsel of the assignment or transfer.

The published proposal provides that a supplier may not permit a person to conduct door-to-door activities until it has obtained and reviewed a criminal history record from the Maryland Criminal Justice Information System and the Federal Bureau of Investigation, through the Department of Public Safety and Correctional Services, and from all other states in which the person resided within at least the last 12 months. The criminal history record check shall be updated no less than every 36 months. A supplier shall subscribe to automatic updates from the Maryland Criminal Justice Information System.

When a supplier contracts with an independent contractor or vendor to perform door-to-door activities, the supplier shall document that the contractor or vendor has performed criminal background investigations on an agent and with the standards set by the supplier, the published proposal provides

The published proposal would also codify several existing practices required by the PSC. For example, the proposal would require electric suppliers to submit open residential offers to the PSC's website according to instructions provided by the Commission. Supplier would also be required to post on the internet readily understandable information about its residential services, prices, and emissions.

The published proposal would also codify that an early termination fee is not considered a commodity and is not subject to purchase as a receivable by the utility.

As previously reported, the proposed rules would require that a utility shall process an electronic enrollment or drop from an electric supplier to be effective within 3 business days after receipt of the electronic transaction. A utility shall not be required to process more than two enrollments and two drops per customer per bill cycle.

A supplier may not require that a customer provide it with advance notice, written or otherwise, before the customer switches to another supplier or to SOS, the proposal provides

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