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Nevada Energy Choice Committee Adopts Recommendation To Ban Variable Rates, Prohibit "Third-Party Retail Marketers"

Urges Consideration Of Prohibiting Door-to-Door, Telephonic Sales, Capping Termination Fees

Committee Punts On Specific Default Service/POLR Structure, Would Task Legislature/PUCN With Development, Though Endorses POLR As "Temporary" Service

May 10, 2018

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

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The Nevada Governor's Committee on Energy Choice has adopted several working group recommendations concerning the energy choice initiative

The energy choice initiative would, if approved in the November 2018 election, extend to all customers the right to choose their electricity supplier.

At a meeting yesterday, the Governor's Committee adopted the policy recommendations of the Technical Working Group on Consumer Protection.

Among these adopted recommendations is that, "Variable rate contracts should be prohibited as they create enormous confusion for customers and can easily lead to problematic contracts for customers who end up paying more."

Additionally, the Committee adopted the recommendation that, "Third-party retail marketers should be prohibited, as in other states that have had problems with such entities adequately informing or misleading customers, which contributed to the 'slamming/cramming' problem, particularly where compensation for third-party marketers is based on 'sign-ups.' Third-party marketers can also make it difficult to deal with complaints/problems as they are not the actual provider, meaning that liability and remedies issues can become more complicated. Third-party marketers may also 'disappear', rendering regulatory oversight of unfair behavior difficult."

The Committee also adopted recommendations urging "consideration" of other consumer protections.

Among these adopted recommendations is that, "Nevada should consider prohibiting door-to-door sales and/or telephone solicitation as these are often used by third-party marketers, leading to problems related to misleading or misinforming customers as well as high-pressure sales tactics, 'slamming/cramming' and the like."

Furthermore, the Committee also adopted the recommendation that the Nevada Legislature, in collaboration with the PUCN and stakeholders, should, "consider capping fees, especially related to enrollment, and prohibit disenrollment fees."

"Residential ratepayers may end up paying excessive fees for lower rate contracts in the hopes such contracts may save them money. Disenrollment fees have been used in other states as a means of preventing customers from switching to lower-cost providers or their preferred choice," the Technical Working Group on Consumer Protection said

The Governor's Committee also adopted recommendations from the Technical Working Group on Open Energy Market Design & Policy, which addressed issues concerning retail market structure and default service (POLR).

The Governor's Committee also adopted the recommendation that, "The Governor and the Legislature shall create a joint committee to address specific legislative and/or regulatory actions needed for a competitive retail electricity market inclusive of providers of last resort and net metering. The newly-created committee should be administratively housed in the PUCN, and have dedicated PUC staff to assist the committee with legislative recommendations no later than July 31, 2020."

The Governor's Committee also adopted the recommendation that, "successful implementation of a restructured energy market for Nevada should include, but not be limited to, ensuring the Public Utility Commission has the necessary power to establish Providers Of Last Resort (POLR) for back-up electric service in each area of Nevada open to competition. The policy of POLR service shall serve a necessary safety net for customers whose chosen retail energy provider is unable to offer or continue electric service. The POLR service should be intended as temporary service, and used only under rare circumstances. These circumstances shall be defined by state law no later than the conclusion of the legislative session of 2021."

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