Holiday "Treat": PSC Staff Proposes Prohibiting Use of Verbal Authorization for Contracts, Would Require Written/Electronic Consent

Staff of the Maryland PSC have proposed eliminating the ability for retail electric and natural gas suppliers to obtain customer consent for a switch via a verbal authorization, such as a TPV, and would instead require that all authorizations be in the form of written or electronic consent.

Staff's proposal was contained in recommended revisions to COMAR in response to the current customer protection working group proceeding (PC 35).

"Staff recommends that consent be affirmative (as now required) but be demonstrated only by a written or, in certain cases, an electronic document," Staff said.

In specific proposed revisions to the COMAR, Staff would define "consent" to mean, "an action communicated by a written document or electronic document," with the term "voice recording" specifically removed from the definition of consent.

"Consent must be affirmative and, except for purposes of pre-enrollment information, must assure that the customer has seen and agrees to all prices, terms and conditions of electric supply prior to providing consent," per Staff's proposed modifications to COMAR.

Furthermore, under the COMAR provisions regarding telephone contracts in the electricity market, Staff would remove language providing that suppliers shall,
"[c]onfirm that an independent third party verifies the contract or records the entire telephone conversation and maintains the recording for the duration of the contract," instead requiring that suppliers shall, "[o]btain customer consent as [newly] defined in this Subtitle."

Furthermore, under Staff's recommendations, supplier solicitations performed through door-to-door sales require the presentation of documents and a signed contract.

A contract must be sent to the customer if the contracting was done electronically.

Staff's proposal would also include new language specifying information which must be disclosed to the customer, including a requirement that the supplier must inform the customer that, "The supplier's price is not regulated by the Commission."

Staff would also require suppliers to post on the Internet, "readily understandable information about its services, prices, and emissions disclosures."

Staff also proposes new notice requirements for renewals.

Staff's proposal defines a "term" contract as any contract lasting longer than one month, or one which includes an early termination fee regardless of duration. For such term contracts, a supplier shall provide a customer with notice of the pending renewal of an evergreen contract 45 days before the automatic renewal is scheduled to occur and an additional notice to be received by the customer no later than 9 days and no more than 14 days before the automatic renewal is scheduled to occur.

Regarding contracts not defined as term contracts, a supplier shall provide a customer with notice of the continuing renewal of the contract to be received by the customer no later than 9 days and no more than 14 days before the automatic renewal is scheduled to occur. Most notably, this notice, "shall clearly state the price for both the current service period and the renewal service period," Staff said, effectively requiring the supplier to provide advance notice of monthly rate changes for variable contracts.

Staff also proposed shortening the switching period for both gas and electricity from the current 12 days to five business days. Gas switches would remain tied to the first day of the month. Multiple switches per month would be made possible for electricity with the supplier drop becoming effective on the day after the electric company receives the electronic drop transaction.