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Regulator Drops Proposed Requirement That Retail Suppliers Must File Preliminary Notice of Customer Book Sales Prior To Final Execution

Sets Final Rules Regarding Customer Assignments

September 19, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Massachusetts DPU has adopted final requirements governing the assignment of customers from one retail electric supplier to another.

Most notable in the final requirements is that the DPU will not, as originally proposed, require a proposed notice of assignment to be filed with the Department. The originally proposed preliminary notice of assignment was to have been filed with the Department no later than 24 hours after the assigning supplier and acquiring supplier sign an initial agreement ("term sheet")

This preliminary notice of assignment was eliminated from the adopted final requirements.

Now, the DPU will require only a single notice of assignment to be filed with the Department, which must be filed no later than five business days after the "final contract" between the assigning and acquiring suppliers has been executed, but not less than five business days prior to the sending of notice of assignment letters to customers

In emergency circumstances where the assigning and acquiring suppliers need to expeditiously complete customer assignments and cannot provide the DPU with the notification of assignment five days prior to the notice of assignment letters to customers being sent ("distressed sale"), the DPU notification of assignment must be filed no later than one business day after the final contract has been signed, along with an explanation of the distressed sale and why the five-day notification requirements could not be met

For purposes of the DPU's order, a distressed sale occurs when the assigning and acquiring suppliers must complete the assignment of customers in an expedited time frame and will not be able to provide customers with notification of the assignment 30 days prior to the assignment taking place as required

The notice of assignment filed with the DPU shall be filed by the assigning supplier

Among other things, the notice of assignment that shall be filed with the DPU shall include

• An attestation that all customer contracts that are subject to the assignment allow for customer assignment. If the contracts do not explicitly allow for assignment, the supplier must state why the Department should allow the assignment

• A statement that the assigned contracts will maintain the material contractual terms and conditions, including pricing, through the term of the assigned contracts

• The expected date(s) of the assignments

• The number of customers that the assigning supplier seeks to assign, by customer type (i.e., residential or commercial and industrial), and by distribution company service territory

• The number of customers with contracts that contain either an early termination fee and/or an automatic renewal provision

• A statement as to whether the assigning supplier intends to withdraw its license with the Department, and if so, when the withdrawal will be filed. If the assigning competitive supplier does not intend to withdraw its license, the supplier must provide an explanation describing why it would be necessary to maintain the license.

The DPU will not, as originally proposed, require assigning suppliers to file copies of customer contracts and notices (either as templates or actual documents) with the DPU. Rather, attestations in the notice of assignment filed with the DPU will address DPU concerns that the customer assignments are contractually permissible, and that customer notifications are proper

The assigning supplier must provide a notice of assignment letter to customers at least 30 days prior to the effective date of the assignment. In the case of a distressed sale, the customer notice of assignment letter must be sent within one business day following the execution of the final contract

The customer notice of assignment letters shall include, among other things:

• Expected date of customer assignment

• Statement that the assignment is allowed per the terms and conditions of the customer’s contract

• Statement that there will be no changes in the material terms and conditions, including price and duration, as set forth in the customer’s contract

• Statement that no action is required from the customer for the assignment to occur

• Date by which customer inquiries should be made to the acquiring supplier

• Contact information for the acquiring supplier if the customer has any questions about the assignment

• Statement that a customer may decline to be assigned to the acquiring supplier in accordance with the cancellation provision of his or her contract

• Amount of early termination fee, if applicable

• A statement that if a customer declines to have his or her contract assigned, the customer will be returned to basic service with his or her distribution company unless he or she chooses to sign a new contract with the acquiring supplier or move to another competitive supplier

On the last point, the final requirements make clear that customers who reject the assignment must not necessarily be returned to basic service (provided they choose another supplier or new contract with the acquiring supplier), as the preliminary requirements had suggested.

Noting that the DPU continues to evaluate revised disclosure labels, including those applicable to assigned customers, the DPU will not, at this time, require the customer notice of assignment to include an information disclosure label

For similar reasons, acquiring competitive suppliers will not be required to use an information disclosure label for notifying customers of an impending renewal, at this time, as the DPU continues to evaluate changes to such documents. The Department, however, will work with acquiring suppliers on a case-by-case basis to ensure that all assigned customers are adequately informed of automatic contract renewals.

The customer notice of assignment must be delivered to the customer by the agreed upon method of communication between the customer and the competitive supplier (U.S. Mail or email).

The assigning supplier must also submit a notice of assignment to each distribution company in which assignment customers are located, identifying the nature of customers in the distribution company’s service territory affected by the assignment. The distribution company notification of assignment must contain the following information:

1. The names and Massachusetts license numbers of the Assigning and Acquiring Suppliers;

2. The number of customers that the assigning supplier seeks to assign in the distribution company’s service territory, by customer type (i.e., residential or commercial and industrial); and

3. The expected dates of the assignments.

The distribution company notification of assignment must be submitted to the distribution companies in accordance with the DPU notification of assignment timing requirements noted above

Customer assignments shall occur on regularly scheduled meter reads. Noting comments from the utilities concerning logistical challenges, the Department will not require competitive suppliers and distribution companies to utilize manual batch and off-cycle customer enrollments at this time.

"The Department, however, seeks to avoid situations in which customers that would otherwise be assigned to a new competitive supplier are returned to basic service because the distribution companies cannot accommodate off-cycle enrollments. As such, the Department urges the Acquiring Supplier and the applicable distribution companies to work together to avoid this outcome," the DPU said

Docket D.P.U. 14-140-D

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