Ohio Proposes Stricter Marketing, Certification Rules for Retail Gas Suppliers

The Public Utilities Commission of Ohio has opened a review of rules relating to the certification of retail natural gas suppliers, and sales and marketing rules for retail gas suppliers.

Staff has proposed that Rule 4901:1-29-05, O.A.C, specifically include language prohibiting companies from engaging in direct solicitation of customers without complying with all applicable ordinances and laws of the customer's jurisdiction.

As part of the acknowledgement required under door-to-door sales, the acknowledgment form is now proposed to include a statement or question regarding, "Did the representative disclose whether or not an early termination liability fee would apply if you cancel the contract before the expiration of the contract term? If such a fee does apply to your contract, did the representative disclose the amount of the fee?"

Stricter third-party verification requirements are also proposed. The draft rules provide that, "The independent third-party verifier must confirm with the customer that the representative of the retail natural gas supplier or governmental aggregator has left the property of the customer."

"The representative of the retail natural gas supplier or governmental aggregator is not to return before, during, or after the independent third-party verification process," the draft provides.

Additionally, "The independent third-party verifier shall structure the independent third-party verification interview to give the customer adequate time to respond to questions and shall not prompt answers from the customer in their response," the draft provides.

Telephonic enrollments shall now include a, "verbal statement and customer's acknowledgement that the retail natural gas supplier or governmental aggregator is not the customer's natural gas company."

Additionally, knowingly taking advantage of a customer's inability to reasonably protect his/her interests because of physical or mental infirmities, ignorance, illiteracy, or inability to understand the language of an agreement would be added to the definition of prohibited misleading, deceptive, or unconscionable acts or practices.

The drat rules provide that, "In an instance where the customer and retail natural gas supplier or governmental aggregator agree to a material change to an existing contract, the retail natural gas supplier or governmental aggregator shall obtain proof of the customer's consent to the material change as delineated in paragraphs (C), (D), and (E) [relating to rules for an initial enrollment] of this rule and in accordance with the applicable enrollment process for that customer."

Additionally, under the draft, "Customer account numbers obtained from participation in a natural gas company's standard choice offer program shall not be used by retail natural gas suppliers in the marketing materials of competitive retail natural gas service. Account numbers must be provided by the customer prior to enrollment in any alternative offer to the standard choice offer."

The draft rules would provide that a retail natural gas supplier or governmental aggregator shall not transfer its certificate to any person without prior Commission approval.

Staff has recommended an addition to Rule 4901:1-27-04, O.A.C, to specify that an applicant for certification must specify whether there is any pending legal action against the applicant, or a past ruling finding against the applicant.

Additionally, PUCO asked several questions regarding the draft rules, including:

"Are competitive retail natural gas service provides [sic] who conduct sales through agents that are compensated primarily or exclusively on a commission basis, incentivizing these agents to take unfair advantage of potential customers through deceptive sales practices? Would sales agents be less incentivized if they were employees of the seller and/or provided with some level of base salary?"

"Should [municipal] aggregation incentives, such as financial contributions to the community, be disclosed in these opt-out notices or is media coverage of aggregation incentives adequate?"

"Should the Commission's rules regulate the availability of certain lengths and types of contracts for certain customer classes?"

"Rule 4901:l-29-05(A)(2), O.A.C, identifies the information that must be included in variable-rate offers. In addition to or in substitution for this rule requirement, should 'variable rate' be a defined term and include reference to the indices that the supplier is using as the basis for price, such as the NYMEX?"

"Should the rule also require the sales pitch segment of the call to also be recorded? Should the rules be clarified to require greater customer protections?"

"Other state commissions post supplier complaint data on their web cites identifying the numbers and types of consumer complaints received by the commission's call center. If normalized, should complaint data be added to the Apples to Apples Chart?"

Case No. 12-925-GA-ORD

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