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Regulator Orders Retail Suppliers To Call Customers Concerning Contract Expiration, Renewals

Regulator Requires Tweaked "Side by Side" Comparison For Renewal Offers

June 2, 2017

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Copyright 2010-17
Reporting by Paul Ring •

The Illinois ICC has issued a second notice order to adopt a host of new retail electric marketing rules, including new rules requiring the advance posting of residential variable rates, including a requirement for retail suppliers to call customers concerning the expiration of a contract.

The second notice order will be submitted to the Secretary of State to begin the second notice period.

Specifically, under the second notice order, "the RES shall call the customer at least 30 days, but no more than 60 days, prior to the end of the initial contract term."

"The call may be live or automated and it shall provide notice of the impending end of the initial contract term, as well as any material changes to the contract, including, at least: contract rates and/or an explanation of how the rate is calculated and how often it changes, length of contract, renewable attributes, early termination fee, type of contract renewal, and any other charges or fees," the second notice order states

In such call, the supplier shall refer the customer to the required mailed notice of contract expiration/renewal.

A second call shall be required within 14 days after the first call if the first call does not reach a person or an answering service.

Calls shall be recorded and retained for a minimum of two years or for the entire period a customer takes service with the RES, whichever is longer

Discussing the adopted provisions, the ICC said, "the Commission has very real concerns about customers whose contracts are automatically renewed and whose contract terms change dramatically, such as where a rate that was fixed becomes variable."

"The Commission also disagrees with the argument that customers will react negatively to receiving, at most, two telephone calls annually from a company of which it is a customer. It is far more likely that customers will react negatively when they realize their contract was automatically renewed and their rates have increased due to a significant change in contract terms," the ICC said

The Commission disagrees with several parties and Staff that federal law and the Illinois Telephone Solicitations Act prohibit the calls required under the second notice order. The ICC said, "The Telephone Solicitations Act states 'A live operator soliciting the sale of goods or services shall' and then enumerates three requirements of the operator. 815 ILCS 413/15. A RES contacting its own customer to give him or her important information about a significant change in his or her contract is not a 'solicitation' for 'the sale of goods or services.' The Commission finds this concern to be unwarranted. The RES already has a prior business relationship with the customer, and the RES is informing the customer about an important change in his or her contract."

"However, RESs that are concerned with potential litigation under the Telephone Solicitations Act or federal law can certainly add language to their contracts which disclose to customers that telephone calls will be made pursuant to subsection (c) of Part 412.240 at the end of the contract term. Adding such language to a RES’s contract would provide the prior express written consent required by the TCPA," the ICC said

The second notice order also adopts a modified "side by side" comparison for renewal offers

Specifically, renewal notices and offers shall include a, "side-by-side comparison of the material changes between the existing contract and the new contract."

The provisions described above will only apply to residential and small commercial customers (under 15,000 kWh annually)

Docket 15-0512

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