Proposed Illinois Rules Prevent Use of Gas Utility Name by Electric Supplier, Allow Customers to Avoid Termination Fees

The Illinois Commerce Commission approved the start of a second notice period for proposed electric customer protection rules, which, among other things, would newly prevent retail suppliers from using the name of an Illinois natural gas utility (09-0592).

Specifically, the ICC approved an order to submit to the Joint Committee on Administrative Rules, to begin the second notice period, proposed rules under 83 Ill. Adm. Code 412, and proposed amendments to 83 Ill. Adm. Code 453.

The Commission dismissed many of the changes to the first notice order sought by retail suppliers, including alternation of the $50 termination fee cap and termination fee waiver period (discussed further below).

Notable changes to the proposed rules under the second notice order include new language that, "A RES [retail electric supplier] shall not be permitted to market power and energy service to residential customers using a similar name (where any part of the RES name contains any part of the utility name) or logo to that of an existing electric utility or natural gas utility in Illinois."

The prior language only prevented a retail supplier from using a name similar to an affiliated electric utility. The new proposal extending the prohibition to names similar to Illinois gas utilities clearly implicates Dominion Retail's marketing agreement to sell electricity as Nicor Electric, absent a tortured legal interpretation of the proposed language or other maneuver (such as renaming the Nicor gas utility).

Additionally, the above prohibition shall not apply to an electric utility serving retail customers, including residential customers, pursuant to Section 16-116 of the Public Utilities Act, which allows the utilities themselves to serve customers competitively outside of their franchised service area.

The second notice proposal also expands the permissible hours for door-to-door marketing, in cases where a municipal ordinance does not govern such activity. Specifically, where no local ordinance prevails, permissible hours for the door-to-door sale of power and energy service shall be between the hours of 9 a.m. and 7 p.m. during the months beginning October 1 and ending March 31, and between 9 a.m. and 8 p.m. during the months beginning April 1 and ending September 30. The first notice order had restricted door-to-door marketing to the hours of 10 a.m. to 6 p.m.

A retail supplier agent conducting door-to-door sales was, under the originally proposed rules, required to affirmatively state that they did not represent the electric utility. Under the newly drafted rules, a similar affirmative statement must now be made by retail supplier agents engaged in outbound or inbound telesales, as the agent must state that they are an independent seller of power and energy service, certified by the Illinois Commerce Commission, and that they are not an employee of, representing, endorsed by, or acting on behalf of the electric utility, governmental body, or consumer group.

The second notice order does not otherwise contain any major changes. Notably, there have been no revisions to the language regarding early termination fees or rescission.

The second notice order still provides that the early termination fee or penalty, for small volume customers, shall not exceed $50 total regardless of whether or not the contract is a multiyear contract.

Furthermore, any small volume customer contract containing an early termination fee shall provide the customer with the opportunity to contact the retail supplier to terminate the contract without any termination fee or penalty within 10 business days after the date of the first bill issued to the customer for products or services provided by the supplier. A customer relying on this provision to avoid an early termination fee shall be precluded from relying upon this provision for 12 months following the date the customer terminated his or her sales contract; however, the ICC did not address logistical concerns of suppliers on how to enforce this provision.

The proposed rules provide that a residential customer wishing to rescind a pending enrollment with the retail supplier will not incur any early termination fees if the customer contacts either the electric utility or the supplier within ten calendar days after, "the electric utility processes the enrollment request." A small commercial retail customer wishing to rescind the pending enrollment with the supplier will not incur any early termination fees if the customer contacts the supplier within ten calendar days after the electric utility processes the enrollment request.