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Regulator Opens Proceeding To Promote, Protect Consumer Interests In Retail Electric Market

Regulator Proposes To Take More "Proactive" Approach In Retail Supplier Investigations, Marketing Activities

Seeks To Expand Marketing Standards Beyond Door-to-Door, Proposes Various Other Consumer Protections

Asks Whether Consumer Protections Should Be Expanded To Small C&I Customers, Gas Market

Considers Requiring More Retail Supplier Info On Utility Bills

Considers Certain Retail Market Enhancements


January 21, 2019

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Copyright 2010-19 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of EnergyChoiceMatters.com

Note: This story was exclusively first published by EnergyChoiceMatters.com the morning of Jan. 21

The Massachusetts DPU Department of Public Utilities has opened a Notice of Investigation to seek input from stakeholders on initiatives, "to further improve the retail electric competitive supply market in the Commonwealth of Massachusetts."

The DPU noted a recent report from the Massachusetts Attorney General which had concluded that residential customers, "suffered large financial losses in the competitive supply market," and which had recommended that the legislators in Massachusetts eliminate the electric supply market for individual residential consumers

The Attorney General's report had been first reported by EnergyChoiceMatters.com

The DPU stated, "the Department seeks to build on our initiatives and further improve the protections provided to residential customers related to the marketing and delivery of competitive suppliers’ product offerings. Our inquiry will include the issues raised by the Attorney General Report and investigate solutions that are within our statutory authority. Accordingly, the Department proposes the following: (1) increase customer awareness of the electric competitive supply market and the value these markets can provide, thus allowing customers to make well-informed decisions; (2) improve the Department’s ability to oversee and investigate competitive suppliers’ marketing practices; and (3) investigate initiatives that would improve the operational efficiency of the electric competitive supply market to optimize the value that the market provides to customers."

The DPU said that, "the Department seeks to take a more proactive approach, including initiating investigations. Below, the Department proposes four steps towards a more proactive approach, related to (1) expanded marketing standards of conduct, (2) expanded role for third-party verification ('TPV'), (3) supplier marketing reporting requirements, and (4) customer complaint data. The Department seeks stakeholder input on the reasonableness and appropriateness of these proposals, and we solicit input on additional initiatives that may improve our ability to investigate the practices of competitive suppliers."

Expansion Of Standards of Conduct

The Department seeks to expand the current door-to-door standards of conduct to include requirements related to the disclosure of product information such as contract term, early cancellation fees, and automatic renewal.

In addition, the Department seeks to apply the door-to-door standards of conduct (revised as necessary) to marketing activities such as telemarketing and direct mail.

"The Department expects that specifying the types of information that marketers must disclose, rather than leaving disclosure to the discretion of marketers, would (1) best ensure that customers are sufficiently aware of the supply products they are being offered and (2) facilitate the Department’s oversight of, and investigation into, competitive suppliers’ marketing practices," the DPU said

Among other things, the DPU sought comment on:

• What supply product information should door-to-door marketers be required to disclose to customers?

• Should the Department establish uniform language (and a uniform format) that suppliers would be required to use to disclose this information?

• Identify the marketing channels for which the Department should establish standards of conduct and, for each marketing channel, discuss how the standards of conduct should differ from the standards of conduct for door-to-door marketing.

Third-Party Verification

The Department seeks to expand the role of TPV to include confirmation that competitive suppliers have complied with the marketing standards of conduct discussed above – absent such confirmation, a competitive supplier would not be permitted to enroll the customer.

"The Department expects that expanding the TPV in this way would (1) protect customers from purchasing supply products about which they were insufficiently informed and (2) facilitate the Department’s ability to identify competitive suppliers that should be reviewed or investigated for non-compliance with the marketing standards of conduct," the DPU said

The DPU asked whether it should establish uniform language that TPV service providers would be required to use to confirm that suppliers have complied with the marketing standards of conduct

Competitive Supplier Marketing Reporting

Currently, the Department does not require competitive suppliers to provide information on the types of marketing activities they use to enroll residential customers. The Department seeks to establish such a requirement. "Having information on suppliers’ marketing activities, including the types of customers enrolled through each type of activity, would allow the Department to prioritize our review of TPVs and adopt a more proactive approach to our review and investigation of competitive suppliers’ marketing activities," the DPU said

"For example, the Department could prioritize our review of TPVs to ensure competitive suppliers that (1) enroll customers primarily through door-to-door marketing or (2) enroll a significant number of low-income customers comply with our marketing standards of conduct," the DPU said

Automatic Renewal

The Department is concerned that many competitive supply customers are not sufficiently aware of when the automatic renewal provision will become effective, the new price to which the contract will automatically renew, or the duration of the new contract term. "Accordingly, the Department sees this lack of awareness as a significant customer protection issue," the DPU said

"To ensure customers are aware of the automatic renewal provisions that may apply to them, the Department seeks to establish uniform requirements regarding the automatic renewal information competitive suppliers must provide their customers, including the timing and manner by which they must provide this information. The Department seeks input from stakeholders on these requirements," the DPU said

In addition, the Department seeks input from stakeholders regarding the reasonableness and appropriateness of using the electric distribution companies’ bills to provide competitive supply customers with information on the automatic renewal of their supply contracts.

Finally, the Department solicited input from stakeholders on additional initiatives that may increase customer awareness of contract automatic renewal provisions. Among other things, the DPU asked

• Would it be reasonable and appropriate for the Department to establish uniform requirements by which competitive suppliers would notify customers of the automatic renewal provision in their supply contracts

• How long before the automatic renewal takes effect should competitive suppliers be required to provide such notification to customers?

• What method(s) should competitive suppliers be allowed to use to provide the notification (e.g., direct mail, e-mail)?

• If the contract would renew to a monthly-priced product, should competitive suppliers be required to notify customers on an ongoing basis regarding the price that will be in effect during the upcoming month? If no, explain why not.

Billing through the Electric Distribution Company Bill

The DPU noted that, currently, the product-related information provided through the bill to these customers is limited to the product price.

The Department seeks input from stakeholders regarding the reasonableness and appropriateness of using the distribution companies’ bills to provide competitive supply customers with additional product-related information. In addition, the Department seeks input from stakeholders on other ways in which the distribution companies’ bills could be used to provide these customers with greater awareness of their competitive supplier and their competitive supply product.

Among other things, the DPU asked

• What information should be provided through the bills (e.g., the date on which the automatic renewal will take effect, the price and pricing structure to which the contract will automatically renew)?

• How often should the electric distribution companies be required to provide this information (e.g., on all bills to competitive supply customers for whom the supply contract includes an automatic renewal provision, only on the bill preceding the month in which the renewal takes effect)?

• What other supply product-related information should the electric distribution companies be required to provide to competitive supply customers through the bills (e.g., early termination fees)?

• How could the presentation of competitive supply information on electric distribution companies’ bills be revised to provide competitive supply customers with improved awareness of their competitive supplier and their competitive supply product (e.g., a separate page dedicated to the competitive supply component of customers’ electric service, the insertion of competitive supplier logos on the bill)?

Complaint Data

The DPU said that, "The Department sees value in making complaint data or a transparent type of competitive supplier performance rating available to the general public online if the information can be presented in a manner that is easily understood. The Department seeks input from stakeholders on the reasonableness and appropriateness of making complaint data or a supplier performance rating available to customers online."

Do Not Switch List, Account Number Block List

The DPU asked in what ways could the electric distribution companies better inform customers of their ability to prevent distribution companies from providing their account information to competitive suppliers and electricity brokers

Furthermore, the DPU asked whether it would be reasonable and appropriate for the Department to require the electric distribution companies to establish a "do not switch" list, which would preclude a company from switching a customer to a competitive supplier. The DPU directed responses to:

• Discuss the manner in which the "do not switch" list should be implemented.

• Identify other states that have established such a list, and, for each state, describe the manner in which the state has implemented the list.

Application to Small C&I Customers

The issues raised in the NOI, and the questions presented above, relate solely to the electric competitive supply market for residential customers.

The DPU asked whether it would be reasonable and appropriate for the Department to investigate any (or all) of these issues as they relate to the electric competitive supply market for small C&I customers?

"If yes, identify the issues that the Department should investigate, and for each issue, discuss whether the Department’s resolution of the issue should differ between residential and small C&I customers," the DPU asked

Application to the Gas Competitive Market

The issues raised in this NOI, and the questions presented above, relate solely to the electric competitive supply market for residential customers.

"Would it be reasonable and appropriate for the Department to investigate any (or all) of these issues as they relate to the competitive gas market for residential customers? If no, explain why not. If yes, identify the issues that the Department should investigate, and for each issue, discuss whether the Department’s resolution of the issue should differ between the electric and gas markets, and why," the DPU asked

DPU Competitive Supply Website (Rate Board)

Concerning the DPU's retail electric supply website and rate board, the DPU said, "Since increasing awareness and improving customer understanding will help improve the competitive market and protect customers, the Department identifies the following potential education initiatives to promote Website use: (1) conducting a general education campaign; (2) requiring competitive suppliers to provide customers with information regarding the Website through their marketing materials; and (3) presenting information regarding the Website on the electric distribution companies’ monthly bills."

Among other things, the DPU asked:

• Would it be reasonable and appropriate for the Department to require competitive suppliers to provide customers with information regarding the Competitive Supply Website through their marketing materials/scripts? If no, explain why not. If yes, identify the information (e.g., Website URL, number of participating suppliers, number of products listed) that would be most effective to increase customer awareness of the value that the Competitive Supply Website can provide.

• Would it be reasonable and appropriate for the Department to require the electric distribution companies to put information regarding the Competitive Supply Website on their bills? If no, explain why not. If yes, identify the information (e.g., Website URL, number of participating suppliers, number of products listed) that would be most effective in increasing customer awareness of the value that the Competitive Supply Website can provide.

Accelerated Switching, Enroll By Wallet

The DPU seeks stakeholder input on the reasonableness and appropriateness of initiating service on an intra-billing cycle basis (e.g., two days after the submittal of a complete and accurate enrollment transaction), thus allowing the initiation of service with a competitive supplier to occur in a more timely manner.

Furthermore, the DPU noted that in order for an enrollment transaction of a customer to be considered complete and accurate, a competitive supplier must include the customer’s electric distribution company account number, information that a customer may not have readily available. "This requirement represents a second potential barrier to the initiation of supply service because customers must have access to their account number (in effect, to their electric bill) to successfully enroll," the DPU said

The Department seeks stakeholder input on the reasonableness and appropriateness of, "replacing the customer account number with alternate information, to allow suppliers to enroll customers when customers may not have ready access to their account number."

Docket D.P.U. 19-07

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