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Latest Retail Energy Proposed Rules Include New Requirement For TPVs

Nebulous "Future" Pricing Information Obligation Created

October 22, 2018

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

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The District Of Columbia PSC issued a further Notice of Proposed Rulemaking concerning its Consumer Bill of Rights, which apply to retail electric and natural gas service to residential customers

While largely similar to its March 2018 NOPR (exclusively analyzed by EnergyChoiceMatters.com here), the new NOPR includes a new definition for, "Third Party Verification (TPV)"

Notably, the definition for TPV provides that, "To be valid, the TPV must occur without the presence of the sales agent[.]"

The NOPR does not further define the meaning of, "the presence of the sales agent," and whether the sales agent must physically leave the premises in order to comply with this provision.

Also notable is that under the definition of TPV, the customer must acknowledge, "that the Customer may access future pricing information[.]"

However, nowhere else in the proposed or existing Consumer Bill of Rights rules is there an obligation for the retail supplier to provide future pricing information under the current contract (e.g. excluding info required under renewal notices, such as a change in terms, etc.)

The new NOPR maintains, without change, language concerning the start of the rescission period that was contained in the March NOPR.

The new NOPR maintains that an Energy Supplier shall advise a Customer that he/she has the right to rescind the Contract agreement within the Rescission Period (three business days) that begins on one of the following dates:

(a) When the Customer signs the Contract;

(b) When a positive Third-Party Verification or electronic recording has been made;

(c) When the Customer transmits the electronic acceptance of the Contract electronically; or

(d) When the Completed Written Contract is deposited in the U.S. Mail.

RESA in comments on the March NOPR had expressed concerns about such language, noting, among other things, that subsections (b) and (d) would both apply in the cases of telephonic enrollments, and therefore the provisions were ambiguous. However, no changes to the proposed language were made

The new NOPR removes from the March NOPR, and removes a similar provision from the current rules, a requirement for a supplier to notify the Commission of changes to its rates and services within 24 hours.

Specifically, the current rule provides that, "At least 24 hours prior to any change, an Energy Supplier shall provide to the Commission current information regarding changes in its rates charges and services provided."

The March NOPR would have tweaked this requirement to provide that, "Within twenty-four (24) hours after making changes to its publicly available current offers (as posted on the Commission's website), an Energy Supplier shall provide the Commission Secretary with information regarding the changes in its rates, charges and services that are being made so that the Commission has current information about the Energy Supplier."

The new NOPR omits these provisions.

The latest NOPR maintains the proposal from the March NOPR that would require that Energy Suppliers shall, "prominently display on their websites' homepages links to the Commission's website pages for Customer Retail Choice and Consumer Suppliers' Offers."

The new NOPR also maintains the earlier proposal that, "An Energy Supplier shall post on its website current and understandable information about its rates, charges and services."

Also maintained from the March NOPR is a proposal that a supplier must, as part of disclosing a variable rate, include an explanation of a variable rate that should indicate that: (1) A variable rate may be based on market conditions; and (2) A variable rate may result in higher or lower costs over an initial introductory rate

The latest NOPR maintains from the March 2018 NOPR that there are three principal ways in which a Customer may enter into a Contract with an Energy Supplier:

(a) Through a recorded verbal consent via telephone solicitation;

(b) Electronic contract; or

(c) Written contract.

The latest NOPR does delete the term "residential" from the language concerning the three principal means of contracting, but as the term Customer in the NOPR is defined as only including residential service, the term residential had been superfluous, and its deletion does not change the proposed rule.

The new NOPR maintains from the March 2019 NOPR that, to verify a residential customer's intent to contract with an energy supplier by telephone, an energy supplier must utilize either:

1. An Independent Third-Party telephone verification; or

2. An automated, computerized system; or

3. An electronic recording of the entire conversation between the customer and the energy supplier which the energy supplier shall maintain for three (3) years.

The latest NOPR also maintains without change the definition of the new term "Completed Written Contract" which is defined as, "An agreement between a Customer and an Energy Supplier that specifies the terms, conditions and charges for the provision of electric or natural gas services to the Customer and the agreement is signed or acknowledged through Third Party Verification, an electronic signature, or an electronic recording."

However, the term "Completed Written Contract" is still used in the new NOPR in proposed rules governing telephonic contracting, which state, "Once the Customer's choice of Energy Supplier is verified by an Independent Third-Party Verifier or an electronic recording is made, the Energy Supplier shall, within five (5) business days from the day the Customer agreed telephonically to Contract with the Energy Supplier, provide to the Customer via U.S. Mail or electronic mail a copy of the Completed Written Contract."

Also, as noted above, one of the start dates for the rescission period is when "the" Completed Written Contract (as opposed to a "copy" as used in the telephonic rule language) is mailed.

In prior written comments, RESA has expressed concern that the concept of a Completed Written Contract, as opposed to language referring to simply "Contract" (which is also defined in the rules), adds unnecessary confusion, especially since the term Completed Written Contract is only used twice in the rules, whereas all other obligations simply refer to the Contract. However, the latest NOPR does not include any changes to the earlier proposals referencing the Completed Written Contract

The new NOPR maintains the broad definition adopted in other recently revised rules for the term "Electricity Supplier", with the term including, "A person, including an Aggregator, Broker, or Marketer, who generates electricity; sells electricity; or purchases, brokers, arranges or markets electricity for sale to Customers," with certain exclusions adopted in the prior rules (e.g. self-supply, apartment building owners not taking title to the power, distributed generators, etc.). As adopted in recent rule changes, the term supplier does not exclude nontraditional marketers (see more details on the same definition of supplier adopted in another rulemaking here).

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