Hearing Officers Direct That Several Provisions Of Newly Adopted Marketing Rules Will Apply Only To Residential Customers During Initial Stage Of Implementation

Two Massachusetts DPU hearing officers have issued a memo concerning various implementation issues regarding the DPU's May 22 order on retail energy marketing and related provisions (Docket 19-07)

See details and provisions of the DPU's new retail market order here

As previously reported, the rules adopted in the order apply to electric and gas competitive suppliers, electricity brokers, and gas retail agents, for activity related to residential and small commercial and industrial ("C&I") consumers, unless otherwise noted. The original order specified that the following initiatives apply only to residential consumers: (1) notification of door-to-door marketing; (2) automatic renewal reports; and (3) enrollment reports.

As previously reported, stakeholders have sought clarification on the definition of small C&I customer, and discussed the issue during a recent stakeholder meeting

In the newly released memo, the hearing officers stated that, "the Department recognizes that further discussion with stakeholders regarding the definition of a small C&I consumer is required before the following initiatives can be applied to these customers in a useful manner: (1) identification of third-party marketing vendors; (2) disclosure of product information; (3) marketing scripts; (4) recording of telemarketing calls; (5) review of direct mail marketing materials; and (6) automatic renewal notification."

"Therefore, during the initial stage of implementation, these initiatives will also apply only to residential consumers," the hearing officers stated

Applicability To Brokers

In the original Order, the Department stated that, unless otherwise noted, the initiatives set forth in the Order apply both to entities licensed as electric and gas competitive suppliers ("competitive suppliers") and to entities licensed as electricity brokers and gas retail agents ("brokers/agents"). In the original order, the Department specified that the following initiatives applied only to competitive suppliers: (1) automatic renewal notifications; (2) automatic renewal reports; (3) enrollment reports; and (4) the Energy Switch Website.

Stakeholders asked about the responsibility for various requirements, including the required notification to the DPU of door-to-door marketing, in situations where a broker is selling on behalf of multiple suppliers

The hearing officers said in the memo that, based on stakeholder discussion, the Department further specifies that competitive suppliers must comply with the following initiatives, "where the product(s) being marketed is limited to the product(s) offered by the competitive supplier":

(1) notification of door-to-door marketing;

(2) identification of third-party marketing vendors;

(3) disclosure of product information;

(4) marketing scripts;

(5) recording of telemarketing calls;

(6) review of direct mail marketing materials.

"The Department expects that this scenario will represent most residential marketing activities that take place in the Commonwealth," the hearing officers said

"Brokers/agents must comply with these initiatives in the limited instances in which they are marketing products on behalf of multiple competitive suppliers, during a single marketing 'campaign,' with whom the broker/agent has contracted to provide such services," the hearing officers said

Automatic Renewals

In the original Order, the Department set forth an initiative that requires competitive suppliers to provide customers with automatic renewal notifications 30 to 60 days prior to the expiration of contracts that have automatic renewal provisions

Based on the discussion during the June 18, 2020 stakeholder meeting, the hearing examiners noted that the Department specifies that this initiative applies to customer contracts that call for customers to receive a fixed-price product over a specified term, at the end of which a competitive supplier can automatically renew the customers to either a new fixed-price or monthly-price product. The Department further specifies that, in instances in which customers are automatically renewed to a monthly-price product, competitive suppliers are required to send the customers a single notification prior to the date of the renewal. In these instances, competitive suppliers must identify how prices for future months will be available to customers through the competitive suppliers’ websites.

Issues For Further Discussion, New Meeting Scheduled

As previously reported, in D.P.U. 19-07-A, the Department stated that it will work with stakeholders, through the D.P.U. 19-07 stakeholder process, to explore the following issues related to the Tier One initiatives set forth in the Order:

• Application of the door-to-door marketing notification five-municipality limit on a regional or vendor basis. D.P.U. 19-07-A at 23.

• Application of the door-to-door marketing notification neighborhood requirement to municipalities other than Boston. D.P.U. 19-07-A at 24.

• Notification of municipal officials of upcoming door-to-door marketing activities in their municipalities. D.P.U. 19-07-A at 25.

• Presentation of basic/default service prices on the Contract Summary Form. D.P.U. 19-07-A at 49.

• Presentation of products’ renewable energy content on the Contract Summary Form, in direct mail marketing materials, and on the Website. D.P.U. 19-07-A at 44, 62, 89.

• Department access to recordings of telemarketing calls. D.P.U. 19-07-A at 57.

• Attorney General access to direct mail marketing. D.P.U. 19-07-A at 63.

• Public access to information on licensed entities. D.P.U. 19-07-A at 13.

On August 6, 2020, from 1:30 to 4:00 pm the Department will convene a virtual meeting with stakeholders to discuss these issues.

In addition, the Department will discuss (1) the definition of small C&I consumers as it applies to the initiatives set forth in D.P.U. 19-07-A, and (2) the display of municipal aggregation products on the Website.

Docket 19-07