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PUC Adopts Rule Requiring Registration Of Third-Party Sales Agents (Distinct From Brokers), Clarifies Registration Process

PUC Addresses Utility Proposal That Would Require Suppliers To Provide Marketing Materials To Utilities

PUC Addresses Proposal For Suppliers To Record All Outbound Telesales

June 2, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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The Maine PUC, in implementing recent legislation, has adopted final retail electric market rule changes that require the registration of third-party sales agents with the PUC

The PUC's final rule defines "third-party sales agent" as, "a person or entity that has a business relationship with a competitive electricity provider in which the person or entity conducts or arranges to conduct residential or small commercial consumer sales of electricity to the public at retail on behalf of the competitive electricity provider through door-to-door sales."

Under the adopted definition, "third-party sales agent" does not include an employee of a competitive electricity provider, and does not include an employee, contractor, or other person working on behalf of a third-party sales agent if the employing entity is registered by the Commission as a third-party sales agent in accordance with Title 35-A and this Chapter

The term "third-party sales agent" is distinct from broker or aggregator, which are already separately defined by rule.

The term competitive electricity provider (CEP) referenced in the definition of third-party sales agent includes brokers and aggregators (in addition to marketers/suppliers).

The rule provides that third-party sales agents must be registered by the Commission. "No entity may contract or offer to contract to provide generation service, enroll customers, provide generation service, or arrange for a contract for the provision of generation service without having obtained a [CEP] license from, or with respect to third-party agents without being registered with, the Commission," the rule states

"A third-party sales agent undertaking the retail sale or marketing of electricity on behalf of a competitive electricity provider may not engage in any sales or marketing activity unless the third-party sales agent is registered with, and has obtained a registration number from, the Commission. If an individual person is an employee, representative, or otherwise working on behalf of an entity registered with the Commission as a third-party sales agent, then that person need not individually register with the Commission. Competitive electricity providers must register all proposed third-party sales agents regardless of whether a third-party sales agent is registered by another competitive electricity provider," the rule states

As noted in the language above, the PUC emphasized that, consistent with legislation, CEPs, not third-party sales agents, are responsible for registering the third-party sales agents.

"CEPs are responsible for registering each of their third-party sales agents, even if an agent is already registered by another CEP. If, however, an individual person is employed by a third-party sales agent that is registered with the Commission, the individual person, for example an employee of the third-party sales agent, need not individually register as a third-party sales agent," the PUC said

The PUC in its order clarified the anticipated registration process, the mechanics of which are delegated to the Director of Electric and Natural Gas Utilities.

"When a CEP applies for a license, it is required to use a form provided by the Commission to request registration of all third-party sales agents that will engage in marketing efforts. When issuing an order granting the CEP license, the Commission will issue a separate 'notice of registration' for each of the third-party sales agents that are registered, including a registration number for each third-party sales agent. The registration number will be the licensing docket number of the CEP followed by the item number in the case management system (CMS). With respect to CEPs that are already licensed and have engaged third-party sales agents that have not been registered, the CEP, using the registration form provided by the Commission, would make a filing in its licensing docket. The Commission will respond by issuing a notice of registration with the registration number (the licensing docket number followed CMS item number). The Commission will post on its website a list of registered agents and corresponding registration numbers," the PUC said

"Thus, the registration is expected to be ministerial and not time-consuming," the PUC said

Accordingly, the PUC denied requests from certain retail suppliers to adopt a deadline by which a third-party sales agent registration shall automatically be deemed approved if the PUC has not acted on it by such deadline.

Given the "ministerial" nature of the process described above, the PUC said, "[T]here is no reason to adopt an automatic registration timeframe in which a registration would be deemed approved."

"In the event that a review of the registration request reveals issues or questions regarding whether it may be inappropriate to register a third-party sales agent, the Commission will initiate an appropriate process that would allow for the CEP, the third-party agent and the OPA to provide information and argument regarding whether the third-party agent should be registered," the PUC said

Several retail suppliers asked that the PUC deem the submission of registration of third-party sales agents by specific suppliers to be confidential.

The PUC denied this request

"The amended rule does not contain a confidentiality provision. The clear purpose of the Legislature having directed the Commission to administer a registration process is for the information to be public. As mentioned above, the Commission will post a list of registered third-party sales agents on its website," the PUC said

"The Commission notes that the registration process will not include any financial information that would typically be protected from public disclosure," the PUC said

Under the rules, a CEP must provide to the PUC a sworn statement by each proposed third-party sales agent attesting to the third-party sales agent's understanding of its compliance obligations with the State's door-to-door sales law, the Maine Unfair Trade Practices Act, and the applicable Commission rules

In registering a third-party sales agent, the CEP must disclose, "All legal actions, including civil court or regulatory enforcement proceedings, criminal prosecutions, as well as customer complaints, filed against each proposed third-party sales agent at a judicial or regulatory body other than the Commission within the last six years prior to the date of the applicable license or registration application or currently pending that relate to or arise out of the sale of electricity, the sale of natural gas, the provision of utility services, business fraud, or unfair or deceptive sales practices[.]"

Retail suppliers had expressed concern that suppliers may not have the ability to determine all pending legal actions and customer complaints against an agent to the extent that agent may operate for other brands and in other industries and jurisdictions. The PUC agreed that the disclosure of pending actions should be limited to information related to the agent’s energy sales business, but otherwise declined to modify the requirement for the disclosure of all actions.

Under the rule, competitive electricity providers are subject to liability to the full extent authorized under Chapter 305 and Title 35-A for the violations of their representatives or agents, including third-party sales agents, acting on their behalf.

Concerning other matters, the PUC adopted a requirement that competitive electricity providers must record and retain all outbound telemarketing calls to residential and small commercial customers for a period of two years from the date of recording.

Vistra had sought clarification that calls that do not result in a sale as well as any telemarketing call that results in a supplier call being placed to voicemail, regardless of whether the call results in a sale or not, be excluded

The PUC denied this recommendation

"The Commission declines to limit the [recording retention] requirement in the rule and finds that maintaining all recordings would not be significantly burdensome. Such recordings may well provide crucial information even if the conversation did not result in a sale. Significant violations of the consumer protection rules may well occur even if no sale or contract resulted. Moreover, it is possible that a CEP could leave a deceptive voice mail," the PUC said

The rule implements a new statutory provision which provides that customers be afforded five days from customer receipt of a first bill to rescind their selection of a CEP. The existing rule sets the recession period as 5 days from the provision of the terms of service

The rule requires that information regarding the consumer's right to rescind service be included in the required door-to-door disclosures.

The rule requires that CEPs and third-party sales agents must conspicuously indicate that they do not serve as an "alternative" to a customer’s transmission and distribution utility.

Specifically the rule states, "A competitive electricity provider or third-party sales agent, may not, in any way, state, suggest or imply any affiliation or association with a transmission and distribution utility, or that it is an alternative to a transmission and distribution utility, and it must clearly and conspicuously indicate on its website and promotional materials that it is not affiliated or associated with any transmission and distribution utility, and that it is not an alternative to any transmission and distribution utility."

The rule provides, "Upon contacting a customer by telephone, a competitive electricity provider or third-party sales agent must state the name of its company and the purpose of the call."

Versant had recommended that the Commission adopt a rule that would require CEPs to provide promotional materials to T&D utilities prior to engaging in marketing activities. Versant indicated that it regularly receives calls from its customers that have questions about CEP marketing materials and said that it would be in a better position to answer these customer questions. Moreover, Versant alleged that requiring CEPs to provide materials to T&D utilities would deter CEPs from using deceptive marketing practices and will allow the utilities to engage the Commission early to identify and correct any violations.

The PUC rejected Versant's recommendation

"A requirement that CEPs provide marketing materials to the utilities was not included in the proposed rule and may raise issues for which CEP comments would be warranted. However, the Commission notes that CEPs may voluntarily provide such materials to utilities along with notice that it will be engaging in door-to-door marketing within their service territory. Such voluntary action may well reduce confusion and avoid the need for Commission investigations and enforcement proceedings," the PUC said

Docket No. 2021-00396

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