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Ohio Staff Say Issues Raised By Retail Supplier In TPV Waiver Petition Should Be Addressed In Current Rulemaking

April 9, 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

Staff of the Public Utilities Commission of Ohio have filed comments on AEP Energy, Inc.'s petition for a waiver of the current rules concerning third-party verification for door-to-door electricity and natural gas sales

As exclusively reported by EnergyChoiceMatters.com, AEP Energy sought partial waivers for its process that would generally rely on the customer using a personal electronic device to receive and consent to various disclosures, including specific product information, and enrollment. AEP Energy would then conduct a shortened telephonic TPV which would not include the more granular information disclosed and affirmed by the customer through the electronic device, but would still record, among other things, the customer's personal information, and confirmation that the individual is the account holder or is authorized to switch the account

See background on AEP Energy's process here

Staff said in its comments the following:

"Staff strongly believes that verifying the enrollment with the consumer in clear, plain language, using a template uniformly followed by all competitive retail electric service providers and competitive retail natural gas service providers, provides valuable safeguards that protect consumers’ interests. The intent of the current TPV rule is to make sure that, to the greatest extent possible, the consumers understand what they are agreeing to and the terms of that agreement.

"Currently, Ohio Adm. Code 4901:1-21-06(D)(1)(h) and 4901:1-29-06(D)(6)(b) are under review by Staff not only in response to the Applicant’s waiver request, but also in the Commission’s five year rule review in Case Nos. 17-1843-EL-ORD and 17-1847- GA-ORD. And while Staff believes that the ideal venue for evaluating these proposed changes is during the rule review process that is currently underway, it recognizes that this process takes time. Therefore, if the Commission grants the Applicant’s request for waiver in these cases, Staff recommends that said waiver(s) should only be effective during the pendency of the rule review for Ohio Adm. Code 4901:1-21-06 and 4901:1- 29-06. Staff believes it is far more beneficial to the Commission and the industry to use the rulemaking process to address the Applicant’s concerns because the rule review process is designed to allow all interested parties to provide their comments and clarifications and, ultimately, the result is that the rules will apply uniformly.

"In conclusion, Staff recommends that the Commission address the Applicant’s issues in the pending rule review. Alternatively, if the Commission does grant the waiver(s) in this application, Staff recommends that the waiver(s) be clearly limited to only the requirement for telephonic TPV verification in the rule and that the waiver(s) expires when the Commission issues its final rules in Case No. 17-1843-EL-ORD and 17- 1847-GA-ORD"

The Office of the Ohio Consumers’ Counsel opposed AEP Energy's petition, stating that, "AEP Energy wants to use a less protective and diluted verification process than the PUCO’s rules require when customers have a personal communication device (e.g., iPhone, Android, personal computer) capable of receiving electronic messaging or an e-mail to access hyperlinks. Instead of the PUCO’s complete independent third-party verification process, for portions of the process AEP Energy proposes to have customers themselves verify that they have changed service via a set of yes-or-no questions. Under AEP Energy’s proposal, the independent third-party verifier would have a minimal role in the transaction."

"The Office of the Ohio Consumers’ Counsel ('OCC') recommends that the PUCO reject AEP Energy’s proposed alternative to the independent third-party verification process in the PUCO’s rules. Ohioans have too many priorities for their time – including children, aging parents, and work – to be experts in whether the pricing and terms of a utility marketer’s offer would be good or bad for them. They need the consumer protections of the PUCO’s rules. AEP Energy’s proposal would significantly degrade those consumer protections. The PUCO should not allow this to happen," OCC said

OCC said that, under AEP Energy's proposal, "The third-party verifier would not even have to obtain the customer’s acknowledgment that he/she has consented to enroll with AEP Energy, as required by the PUCO’s rules. And the third-party verification process proposed by AEP Energy fails to verify through an oral statement that the customer accepts each of the principal terms and conditions for the service, as required by the PUCO’s rules."

In further comments in support of its Petition, AEP Energy (AEPE) noted that a similar waiver request filed by IGS Energy has been granted by PUCO. AEP Energy said that its process provides greater customer protection than the process to which PUCO has already granted a waiver

"Like IGS and as a key business aspect of this waiver request, AEPE hires as employees and trains in-house its residential field sales agents to ensure high quality of performance and compliance with all regulations. AEPE field sales agents are compensated primarily with base pay (including benefits) and sales commission only represents portion [sic] of the total compensation. In these circumstances, the need for TPV is diminished. The tablet enrollment process provides additional safeguards in excess TPV [sic] because of the granular information retained regarding each customer enrollment, solicitation, and prompt delivery of terms and conditions of executed contracts via email delivery. This enrollment process significantly benefits customers by providing them with a better and more customer-friendly enrollment experience," AEP Energy said

"However, unlike the scope of the IGS waiver, AEPE is proposing to retain a portion of the TPV process that verifies the identity of the customer. This added step makes it almost impossible for a fraudulent enrollment to occur because there will be a voice print of the actual customer that is retained to verify the identity of the customer being enrolled. This safeguard is in addition to the GPS locator tracking of the sales presentation, the electronic responses to the commercial transaction details, and the transmittal of terms and conditions to the customer's email address," AEP Energy said

Case No. 18-0371-EL-WVR

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