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

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

POLR Service Design Left To Legislature

June 27, 2018

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Copyright 2010-17
Reporting by Paul Ring •

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The Nevada Governor's Committee on Energy Choice has approved a final report on findings and recommendations related to 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.

In the final report, the Committee formally memorialized recommendations that had been agreed to at prior meetings and which had been reported by in May (see story here)

The final report includes the following recommendations:

• "Third-party retail marketers should be prohibited, as in other states that have had problems with such entities inadequately 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 an 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.

• "Nevada should consider prohibiting door-to-door sales and/or telephonic solicitation, as these are often used by third-party marketers, creating problems related to misleading or misinforming customers, high-pressure sales tactics, 'slamming/cramming,' and the like."

• "Variable rate contracts should be prohibited as they create enormous confusion for customers and can easily lead to problematic contracts for customers who then end up paying more."

• "The Legislature, in collaboration with the PUCN and stakeholders, should consider capping fees, especially related to enrollment, and prohibit disenrollment fees, as 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 Legislature and/or PUCN should consider adopting a model Terms of Service Disclosure Form which all retail energy providers must use in order to participate in the restructured market. The model Terms of Service Disclosure Form should require standardized methods of disclosure of essential terms such as price, contract length, additional fees, dispute, complaint, and collections practices, and the like."

• "The Nevada Legislature, in collaboration with the PUCN and stakeholders, should amend the Consumer Bill of Rights to address issues related to Energy Choice, ensuring adequate protections exist to safeguard against the complaints and issues that have arisen in other restructured markets. In amending Nevada’s Consumer Bill of Rights, other similar statutes in restructured markets should serve as model legislation."

• "Successful implementation of a restructured energy market for Nevada should include, but not be limited to, ensuring the PUCN has the necessary power to establish POLRs for back-up electricity service in each area of Nevada open to competition. The policy of POLR service shall serve as a necessary safety net for customers whose chosen retail energy provider is unable to offer or continue electricity service. The POLR service should be intended as temporary service, and used only under rare circumstances." These circumstances should be defined by state law no later than the conclusion of the 2021 Legislative Session.

• "The Governor and the Legislature should 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 PUCN staff to assist the committee with legislative recommendations no later than July 31, 2020

• "The Committee encourages the Governor, Legislature, and regulatory agencies and organizations to implement the Energy Choice Initiative in a manner that conditions market participation on retail offerings that align with Nevada’s existing goals for renewable energy, energy efficiency and technology, and that do not harm Nevada’s current programs, statutes, and regulations, including but not limited to, renewable energy requirements, energy efficiency, subsidized services for low-income customers, net metering as set out in A.B. 405 (2017), and storage."

• "The PUCN should continue to address resource adequacy and planning reserve requirements through the existing Integrated Resource Planning process until an organized, open, competitive market is established by the Legislature."

• "Successful implementation of a restructured energy market for Nevada should include, but not be limited to, joining or contracting with an existing Independent Systems Operator (ISO), with a deep, liquid, and robust market, located in close geographic proximity to the State of Nevada, and already integrated with Nevada and neighboring western states."

• "Nevada’s interstate contract with the neighboring ISO shall retain Nevada’s ability to control Nevada’s own fuel mix, retain popular demand-side programs – like energy efficiency and net metering – and provide future governors and legislators with the legislative flexibility and power to make further changes to ensure consumer protection."

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