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Calling OPC's Interpretation "Misplaced", PSC Confirms Written Signature Not Needed For Telephonic Enrollments

People's Counsel Has Been Enforcing Own Interpretation Requiring Written Signature For Telephonic Sales, In Addressing Complaints

June 9, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The District of Columbia PSC issued an order concerning retail electric contract authorizations which, "clarifies that only in written contracts between customers and suppliers are written signatures required from customers."

"Contracts agreed to telephonically are valid upon transmittal of a positive verification of enrollment from an Independent Third Party Verification ('TPV') or an entire electronic recording. Contracts entered into through the Internet or other electronic means are valid upon the submission of the electronic application and electronic signature. In neither of the two latter instances are written signatures required," the PSC affirmed, in addressing a petition filed by Clearview Electric

As exclusively reported by EnergyChoiceMatters.com, in addressing customer complaints, the District of Columbia Office of People's Counsel has been interpreting the District's regulations as requiring a signature for telephonic retail electric sales, prompting Clearview Electric to file a petition with the D.C. PSC to clarify whether a written signature is required for telephonic sales to be valid.

In an email communication to Clearview, an OPC Staffer, while acknowledging that an enrollment may be "verified" telephonically, cited the requirement under the Consumer Bill of Rights (CBOR) (15 D.C.M.R. § 327.1 et seq.) for the supplier to send a "written contract" to the customers. OPC then hangs its argument on Section 327.25 which states, "A written Contract requires a written signature of the Customer."

Clearview had called OPC's interpretation inconsistent with a "plain reading" of CBOR Section 327.1 et seq., noting that the telephonic enrollment rules at CBOR Section 327.21 do not condition transmitting an enrollment to the utility upon a customer signing a written contract (see further discussion in our original story here)

The PSC clarified that Clearview’s interpretation of the relevant CBOR rules as discussed in Clearview’s petition is accurate.

The PSC noted that Section 327.14 provides three distinct ways in which a consumer may enter into an agreement with an energy supplier: (1) Over the telephone; (2) Internet and other technological means; and (3) A written Contract.

"First, with regard to telephone contracts, § 327.21 provides that a supplier may not transmit an enrollment transaction to a natural gas or electric utility 'unless and until' the supplier obtains a positive TPV of the customer’s intent or an electronic record of the entire conversation with the customer. Once the supplier obtains that information and is subsequently sent to the utility (§ 327.22), the customer becomes effectively enrolled for service. There is no language in § 327.21 that conditions the transmittal of a customer enrollment to the utility upon a customer’s signature on a written contract. As Clearview points out, the Commission has confirmed this interpretation in its Workshop Presentation of what constitutes proper enrollment, in which the Commission states that enrollment transactions are valid upon the Supplier obtaining a 'written signature, an electronic signature or a positive verification from an Independent TPV/electronic recording,'" the PSC confirmed

"Secondly, with regard to contracting over the Internet, § 327.26 requires the availability of an 'electronic application' and an 'electronic version or the actual contract' on the supplier’s web site. The presence of the electronic application on a supplier’s website is how potential customers avail themselves into entering into a contract with the supplier. Once having filled out the application, the language of § 327.28, governing the existence of an electronic contract, is plain on its face: 'The electronic submission of the application to Contract with the Energy Supplier constitutes a valid and binding ‘electronic signature.’' Contrary to OPC’s assertion, there is no language in this section or in subsequent sections that require a written contract be provided to the customer, nor that a written signature be obtained from the customer. Section 327.29 simply requires only that the supplier acknowledge receipt of the executed electronic contract within twenty-four hours of its receipt," the PSC confirmed

"The third way in which a supplier may enter into a contract with a customer is through a written contract. Here, as well, the rule is plain on its face and uncontested by the parties: 'A written Contract requires a written signature of the Customer,'" the PSC confirmed

"In summary, OPC’s interpretation of our rules as requiring written signatures in all methods of enrollment is misplaced. This is particularly apparent in how OPC narrowly focuses on a clause in § 327.23 that requires that 'the Energy Supplier must within five (5) Business Days from the Day the Customer agreed telephonically to Contract with the Energy Supplier, provide to the Customer a complete written Contract via U.S. mail or electronic mail,'" the PSC said

"At the outset, § 327.23 refers only to contracts agreed to 'telephonically' that must be either mailed to the customer or sent electronically. Thus, this provision is inapplicable to customers who have entered into contracts with suppliers electronically (§ 327.26) or by written means (§ 327.25). Secondly, there is no language in this section that requires that a written contract sent to the customer following telephonic enrollment as also requiring a subsequent return signature from the customer on that contract. In fact, as pointed out by Clearview, OPC has tacitly recognized the absence of a written signature requirement in this section by proposing in its petition to amend the CBOR rules a 'wet signature' requirement for telephonic contracts at proposed § 327.41(f)(1). Unmistakably, if a written signature requirement were already present under the current rules for all methods of enrollment, there would be no need to amend the rules to explicitly include it," the PSC said

"Although we establish that only written contracts require written signatures and that contracts entered into telephonically or through the Internet do not, we emphasize that the customer maintains the right to challenge the existence of any purported contract between the customer and the supplier. Under this circumstance, the burden of proving the existence and legitimacy of a contract rests with the supplier. (§ 327.24)," the PSC said

"Accordingly, for the reasons stated above, the Commission clarifies that only written contracts require written signatures. Contracts agreed to telephonically are valid upon transmittal of a positive verification of enrollment from an Independent TPV or an entire electronic recording. Contracts entered into through the Internet or other electronic means are valid upon the submission of the electronic application and electronic signature," the PSC said

"The Commission clarifies that only written contracts between customers and suppliers require written signatures from customers. Contracts agreed to telephonically are valid upon transmittal of a positive verification of enrollment from an Independent TPV or an entire electronic recording. Contracts entered into through the Internet or other electronic means are valid upon the submission of the electronic application and electronic signature. In neither of the two latter instances are written signatures required," the PSC ruled

Formal Case No. 712

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