Proposed Illinois Rule Would Prohibit Opt-Out Aggregation Suppliers from Receiving Customer Info of Shopping Customers

A proposed first-notice order from an Illinois Commerce Commission ALJ concerning municipal aggregation rules would prohibit the retail suppliers selected by municipal aggregations from receiving the customer information of customers already on competitive supply.

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Before getting to specifics, the draft first-notice order frames the rules as such: the ICC generally lacks jurisdiction over governmental aggregators, but retains jurisdiction over retail electric suppliers supplying such aggregations (and the utilities providing customer information), and therefore, may adopt rules governing suppliers' compliance with various customer protections (though the rules may not reach to the government entities conducting the aggregations in certain areas).

Specifically, with respect to the question of whether the governmental aggregator should receive customer specific information of customers on competitive supply, the draft notes that the IPA Act requires the transfer of information for all retail customers, and does not prohibit the transfer of customer-specific information of customers on competitive supply to the governmental aggregator. The draft, therefore, requires the electric utility to provide governmental aggregators with the name, addresses, and account number of all retail customers, including shopping customers

However, the draft noted that the vast majority, if not all, of the aggregation notifications to customers, and the opt-out process itself, are being performed by aggregation suppliers.

"The IPA Act is clear that Governmental Aggregators get the customer list containing all retail customers - both on utility bundled supply and RES supply. The Commission does not agree, however, that Aggregation Suppliers should receive a list that contains the information of competitors," the draft states (emphasis added).

"A primary concern for the Commission in promulgating these rules is protecting customer-specific information that electric utilities are required to provide to Governmental Aggregators pursuant to Section 1-92 of the IPA Act. There is no specific statutory basis for providing any customer information to Aggregation Suppliers prior to a customer joining the Aggregation Program. The Commission recognizes, however, that Governmental Aggregators have the option to enter into contracts with Aggregation Suppliers for electric power and 'related services' which could arguably encompass the sending of notices and performing the actual Opt-out or Opt-in process. The Commission is very concerned with the protection of customer information and the avoidance of 'slamming' of customers. It is the Aggregator Suppliers' receipt of information that could enable illegal switching that drives the need for regulation," the draft sates.

"The Proposed Rule is written so that Governmental Aggregators will be able to identify customers on RES [competitive] supply," but aggregation suppliers shall not receive customer information for shopping customers (unless, and only after, the customer opts into the aggregation).

"If the Aggregation Supplier receives this information from the Governmental Aggregator, then the Aggregation Supplier should destroy it immediately. In no circumstances, for either Opt-in or Opt-out should the Aggregation Supplier send notices or marketing regarding Aggregation Programs to customers on RES supply," the draft states.

The draft first notice rule would also prohibit governmental aggregators from receiving any customer specific information from the utility prior to the passage of an aggregation ordinance and successful referendum. Moreover, the aggregation supplier would not receive this information prior to adoption of an ordinance and referendum.

Aggregation suppliers would also be required to delete customer information 30 days after their term as the aggregation supplier expires. "Because of the nature of an Aggregation Program, an Aggregation Supplier should not be able to retain customer information. The resident has signed onto (or not opted out of) the community's Aggregation Program - they have not signed up with any RES in particular. When the Aggregation Supplier is no longer the supplier of choice, there is no reason for the Aggregation Supplier to keep the information," the draft states.

The draft first notice rule would establish a mandatory opt-out period of at least 18 days. The draft first notice order stresses that, in addition to this opt-out period, customers would retain their ability to rescind service within 10 business days after the date of the first bill, per Part 412.

If the aggregation supplier sends the required opt-out aggregation notice to the customer (rather than the government aggregator sending this notice), the notice must inform customers that customers may alternatively purchase their electricity supply from a retail electric supplier (without providing a price comparison) or the electric utility (either utility fixed-price or hourly service) and must list the PlugInIllinois.org Internet address. An aggregation supplier may not send an opt-out notice to a customer already shopping

"This reflects the Commission's concern that customers may feel obligated to join the Aggregation Program because it is offered in conjunction with their local government and the Governmental Aggregator's involvement lends weight to the offer. Importantly, customers need to be fully aware of their options and fully educated before joining any Aggregation Program," the draft states.

The draft would require that if the aggregation supplier conducts the opt-out process (rather than the governmental aggregator), then the supplier shall offer customers the following opt-out methods: (1) by returning a postage pre-paid postcard or similar notice supplied by the aggregation supplier, and also (2) by at least one of the following additional methods: (A) telephone; (B) e-mail; or (C) internet notice.

"The Commission is concerned that customers be adequately protected if a Governmental Aggregator does not itself send notice or perform the opt-out process, but rather has the Aggregation Supplier perform these functions. Each customer that fails to opt-out is a new customer for the Aggregation Supplier and thus, there is no benefit to the Aggregation Supplier to make the opt-out process simple. Because Aggregation Suppliers are given the power to switch customers though the opt-out process, customers must be protected," the draft states.

Additionally, opt-out notices sent by an aggregation supplier must include the specific and exact date by which the opt-out must be exercised, and not simply a deadline such as 18 days after receipt, the draft provides.

Any customers acquired by the aggregation supplier after the opt-out period would have to comply with 505/2EE of the Consumer Fraud and Deceptive Business Practices Act (the standard enrollment verification procedures for retail supply), the draft provides.

Among other things, opt-out disclosures sent by aggregation suppliers would be required to include the amount of any termination fee. The draft would not require, however, that opt-out aggregations must provide customers with an opt-out period, without a termination fee, every two years after the start of the aggregation, as had been suggested by Staff.

Docket 12-0456