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PUC Staff Support Another Retail Supplier's Sought Waiver Of Certain TPV Requirements For Electronic TPV

Competitor Says Waivers Should Only Be Granted When Sales Force Is Internal Employees

August 16, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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Subject to an additional condition, Staff of the Public Utilities Commission of Ohio have recommended that the Commission grant the petition of Star Energy Partners LLC for a partial waiver of certain requirements set forth in Ohio Admin. Code 4901:1-21-06 with respect to third-party verifications (TPVs) that are required for door-to-door sales, with Star Energy Partners requesting that the requirement of a telephonic TPV be waived and an electronic TPV, compliant with Ohio Admin. Code 4901:1-21-06(D)(2)(a)(i)-(v) and (vii), be used in its place.

Star Energy Partners's petition for the waiver had been exclusively first reported in, and Star's specific TPV process is described in detail in our prior story (click here).

In brief, PUCO Staff summarized the process as follows: "In its application, the Applicant outlines the proposed electronic verification process. A customer who elects to enroll electronically does so on a device the door-to-door sales agent carries. The Applicant asserts that this electronic enrollment process independently meets the Internet enrollment provision of Ohio Adm.Code 4901:1-21- 06(D)(3). The customer is then given the option to complete the verification process via email, text, or a phone call. For those customers who choose to complete the verification via phone call, the 'traditional' TPV process will be followed. For those who choose to complete the process via text or email, the customer will receive a clickable link to a verification page that can be viewed on the customer’s own device. The link will display the terms and conditions associated with the product as well as all of the questions contained in Ohio Adm.Code 4901:1-21-06(D)(2)(a)(1)-(v) [sic]. Customers will need to check boxes marked as 'Yes' or 'No' next to each question. An affirmative response to each question is required for enrollment to proceed. A 'No' response to any of the questions will result in a failed confirmation and the enrollment is nullified. Customers will be required to view and consent to the terms and conditions. The Applicant will then send an electronic copy of the terms and conditions to the customer’s email address. If the customer does not provide an email address or consent to an electronic version, a print copy will be provided per rule. The Applicant contends that the verification portal retains detailed information of the enrollment including the GPS, IP address, confirmation number, date and time of each customer enrollment until at least one year after the contract with the customer terminates. The sales agent’s location at the time of enrollment is identified and ensures that the agent is not on the property while the customer completes the verification. An enrollment cannot be submitted if the sales agent’s GPS location is turned off."

Staff recommended that the Commission grant the waiver, under the condition that the customer has the ability and the desire to complete a web-based TPV and the Applicant continues to follow all other requirements of Ohio Adm.Code 4901:1-06(D)(1), including the requirement to immediately provide a customer with a signed contract if they do not consent to receiving it in electronic form.

Staff recommended that the waiver be clearly limited to only the requirement for telephonic TPV verification in the rule and that the waiver expires when the Commission issues its final rules in Case No. 17-1843-EL-ORD, a proceeding in which PUCO is currently evaluating the marketing and enrollment rules under Ohio Adm.Code 4901:1-21-06

Interstate Gas Supply filed comments on Star's application, noting that IGS, which was previously granted a waiver of the similar PUCO TPV rules, only uses IGS employees in its door-to-door process (not contractors).

"IGS submits these comments to make clear that it does not support any waiver request that falls short of utilizing an employee-based sales force to facilitate alternatives to the traditional door-to-door enrollment and verification model," IGS said

IGS said that, "Star’s proposal falls short of offering a door-to-door enrollment and verification process that would be performed by Star employees. Also missing from its application is any insight into the compensation that Star’s third-party agents receive for their enrollment services, or whether those agents will solicit in specifically defined geographic sales territories."

"Star’s application should be distinguished from the TPV Waiver Case because the waiver IGS obtained is applicable only to the specific employee HEC [Home Energy Consultant] Enrollment process outlined in IGS’ application. For that reason, the Commission should not rely upon the TPV Waiver Case for purposes of reviewing Star’s application in this proceeding. Rather, the Commission should focus on whether Star’s application enhances the customer experience, discourages the potential for abuses, and is a suitable replacement for the traditional telephonic TPV ... Accordingly, any request for waiver of the traditional TVP [sic] requirements that falls short of utilizing an employee-based sales force to facilitate alternatives to the traditional door-to-door enrollment and verification model should be dismissed," IGS said

In an earlier reply to prior comments made by IGS, Star Energy Partners had said, "IGS’s position completely misses the point. IGS obtained a full waiver of the Rule (i.e., the entire TPV process was waived) because IGS used its employees for the entire sales process. On the other hand, Star Energy requests only a partial waiver of the Rule. Star Energy’s agents would continue to make sales in compliance with the PUCO’s door-to-door rules, and a third party vendor would continue to verify the sales under the PUCO’s rules. The only (partial) waiver Star Energy seeks is that the TPV process be conducted electronically rather that telephonically. IGS’s position that Interstate Gas Supply requires Star Energy to abandon the TPV process and conduct door-to-door sales by hiring in-house employees is utter nonsense, and self-serving to IGS’s competitive interests."

The Ohio Consumers' Counsel said that PUCO should deny Star's sought waiver

"Star’s proposal depends on technology (geolocation tracking) that might not accurately determine whether the salesperson has left the customer’s home. The salesperson’s presence at a customer’s home at the very time the verification is supposed to be occurring undermines the independence of any verification process," the OCC said

OCC said that Star states that it would use a combination of global positioning system ('GPS') and Internet Protocol ('IP') address tracking to determine whether its door-to-door salesperson has left the customer’s home before third-party verification would begin

Concerning the geo-location feature on which the sought waiver is partially premised, OCC said, "Reports indicate that GPS is accurate between three and 15 meters (about ten feet to 50 feet), depending on the equipment used. But even a variance of ten feet could mean that the geolocation function inaccurately shows whether the salesperson has left the customer’s home. Further, it has been reported that GPS doesn’t work well in urban areas and indoors."

"The system Star proposes to use for tracking the customer’s location is less accurate. An IP address location tracking system relies on large computer databases for mapping IP addresses to specific geographic locations based on to a specific postal address or latitude/longitude coordinates. According to the technology information service 'Lifewire,' tracking a location by an IP address has several limitations," OCC said

Case No. 17-2398-EL-WVR

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