State Proposes New Rules Governing Assignment of Customers to Another Retail Supplier, Prohibition on Termination Fees

As part of a wide-ranging proceeding to update a host of retail electric market provisions, the Massachusetts DPU has proposed new provisions governing the assignment of a retail suppliers' customers to another retail supplier.

For customers whose contracts include an early termination fee provision, the Department proposes that the competitive supplier to which the contracts are assigned agree to waive that provision, and allow these transferred customers to cancel their contract at any time with no fee during the term of the contract.

For customers whose contracts include an automatic renewal provision, the Department proposes that the competitive supplier to which the contracts are assigned must send a notification letter to the customers no later than 30 days prior to the date of the automatic renewal. The Automatic Renewal Notification letter must (1) inform the customer of the provision of their contract that permits automatic renewal, and (2) describe the prices (and pricing structure) that will be in effect during the renewal term.

The Department also proposes that the competitive supplier file a "Notice of Assignment" with the Department no later than 60 days before the expected effective date of the assignment. The competitive supplier must include the following information in the Notice of Assignment:

1. Documentation that its customer contracts allow for customer assignment;

2. The number of customers that the competitive supplier seeks to transfer, by customer type (i.e., residential or commercial and industrial), and by distribution company service territory;

3. The date(s) of the intended assignment;

4. The name and Massachusetts license number of the competitive supplier to which the contracts would be assigned;

5. A statement that the assignment will maintain all contractual terms and conditions, including pricing, through the term of the contract;

6. The number of customers that have contracts that contain either an early termination fee provision or an automatic renewal provision;

7. A copy of the Notice of Assignment letter and envelope that the competitive supplier intends to send to affected customers; and

8. The reason for the assignment, and whether (and, if so, when) the competitive supplier intends to withdraw its license with the Department.

A competitive supplier that seeks to assign its customer contracts must send its notification letter to customers at least 30 days prior to the intended transfer date, both by United States mail and by e-mail (if the competitive supplier has the customer’s e-mail address).

D.P.U. 14-140

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