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FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 INTRODUCTION The Customer Protection Working Group ("CPWG") was created as part of the Electric Restructuring Roundtable to consider and make recommendations concerning customer protection in Maryland retail electric markets. The Commission stated in its Order in Case No. 8738 establishing the Roundtable that numerous existing customer protections should continue, that some programs may need to be expanded and some created to meet the needs of consumers in a deregulated environment, and that customer protection in Maryland should not be lessened by the implementation of retail competition. The CPWG is made up of representatives of utilities, alternative suppliers, consumer and community groups and others capable of examining the issues from many viewpoints. The CPWG first identified and outlined the specific areas in which it determined customer protections should be examined, then researched and identified the existing laws and regulations addressing those issues. Building on these efforts, the CPWG then began to produce and refine detailed proposals for the protection of electric customers in a deregulated environment. The CPWG's Interim Report, issued on November 2, 1998, describes the Working Group's progress to that point. A Second Interim Report CP-1 was delivered in response to a request by the Environmental Matters Committee of the Maryland House of Delegates, while that body was deliberating various proposals for restructuring the electric utility industry. This final report will detail activities of the CPWG overall. Since November 2, 1998, the group has met 15 times. The CPWG's discussions were limited by uncertainties surrounding the legislation being considered by the Maryland legislature at the same time the working group was meeting. It was not clear what kind of authority the Public Service Commission would be granted over "unregulated" suppliers and over the various aspects of a "deregulated" industry. The effect of these uncertainties and the effect of the bill finally passed by the General Assembly (HB 703/SB 300, The Electric Customer Choice and Competition Act, hereinafter called the "Customer Choice Act") will be described in more detail in the sections that follow. The CPWG's deliberations since the Interim Report have proceeded along two lines: (1) at the request of the Generic Technical Implementation Working Group ("TIWG"), the CPWG has debated and recommended procedures for the enrollment of customers during the phase-in of retail competition over three years as ordered by the Commission in Case No. 8738 (and enacted in The Customer Choice Act), and for the allocation of payments between the utility distributor of electricity (the Local Distribution Company or "LDC") and the unregulated supplier when a customer makes only partial payment of a bill 1; and (2) specific 1 There is no consensus on the procedure for allocating partial payments. The process recommended by the CPWG was supported by most of the CPWG members, but was and continues to be vigorously opposed by the MidAtlantic Power Supply Association (MAPSA). CP-2 protections addressing more wide-ranging issues have been proposed and discussed. Consensus was difficult and, in most instances, not possible, but the group was able to keenly define and narrow the issues. This report will describe the proposals discussed and the concerns from the viewpoints of the various group members, as well as the impact of provisions of The Customer Choice Act, following an outline of general areas of issues which the group itself followed in its deliberations. The discussion in each area will note whether consensus was reached or a recommendation to the TIWG made, and why. If consensus was not possible, the report will describe the prevailing views of the members on the issues, which generally fell into two distinct views but occasionally numbered three or more. The requests of the TIWG and the recommendations the CPWG made in response will be discussed within this same outline. For reference, the CPWG attaches Exhibit 1, which is an abbreviated version of the matrix which was the CPWG's working document during its discussions over the past year. The sections which follow in this report address customer protection proposals in the following general areas: Jurisdiction over Suppliers and Related Third Parties Marketing and Advertising Customer Enrollment Practices Consumer-Supplier Agreement Billing Requirements Dispute Resolution Collection Practices and Requirements Service Terminations These general areas, in the order they are presented, reflect the general stages of the interaction between a supplier/marketer and a customer. CP-3 It should be noted that although certain specific proposals made were for the protection of residential customers only, their application to small commercial customers, and to larger commercial and industrial customers was also discussed.2 The results of these discussions will also be described in this report. The members of the CPWG want to stress to the Commission that the issues we have grappled with over the past year are not easy ones. Our discussions have been extensive and thorough and, at times, quite spirited. We have appreciated the opportunity to serve and hope that this report will serve as a valuable tool toward the implementation of meaningful customer protections in the new electric industry. 2 There is no definition for "small commercial customer" or any other class of customer in The Customer Choice Act. The CPWG was not able to agree on a definition or whether such a definition should be uniform or vary according to electric company. CP-4 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART ONE JURISDICTION OVER SUPPLIERS AND RELATED THIRD PARTIES A major issue for the CPWG was the question of what jurisdiction the Commission would or should have over activities of suppliers and related third parties, a question that would clearly have to be resolved by the General Assembly. The Customer Choice Act directs: - that the Commission require appropriate complaint and enforcement procedures (The Customer Choice Act, § 7-505(B)(10)(ii)3); - that the Commission require any other safeguards deemed necessary by the Commission to ensure the creation and maintenance of a competitive electricity supply and electricity supply services market (The Customer Choice Act, § 7-505(B)(10)(ii)(4)); - that nothing in The Customer Choice Act may be construed as preventing the application of State and Federal consumer protection and antitrust laws to electric companies and their affiliates and to electricity suppliers (The Customer Choice Act, § 7-505(B)(11)); - that the Commission license suppliers (The Customer Choice Act, §§ 7507(A)-(D)); - that the Commission adopt regulations or issue orders to protect consumers from anticompetitive and abusive practices; establish reasonable CP-5 restrictions on telemarketing; establish procedures for contracting with customers, establish requirements and limitations relating to deposits, billing, collections and contract cancellations; establish provisions for referral of delinquent accounts to standard offer service; and establish procedures for dispute resolution (The Customer Choice Act, § 7-507(E)); - that the Commission adopt regulations or issue orders establishing procedures to prevent slamming (The Customer Choice Act, § 7-507(G)(2)); - that the Commission consult with the Consumer Protection Division of the Office of the Attorney General ("AGCPD") before issuing regulations designed to protect consumers (The Customer Choice Act, § 7-507(O)); and - that nothing in The Customer Choice Act may be construed to affect the authority of the AGCPD to enforce violations of Titles 13 and 14 of the Commercial Law Article or other applicable State law or regulation in connection with the activities of electricity suppliers (The Customer Choice Act, § 7-507(Q)). The CPWG did not have an opportunity to debate thoroughly the jurisdictional questions after the enactment of The Customer Choice Act in April, 1999, but discussions prior to that time centered around whether the Commission should issue regulations and oversee customer protections in a restructured electric environment, or whether the AGCPD should carry out those activities in accord with Titles 13 and 14 of the Commercial Law Article and other applicable law, just as it does now with other industries. Also debated was how a process for resolving consumers' complaints with suppliers would be structured, i.e. what roles the Commission or the AGCPD would fulfill in a dispute resolution CP-6 procedure. The CPWG's assessment of the impact of The Customer Choice Act on these issues will be discussed in later sections of this report. CP-7 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART TWO MARKETING AND ADVERTISING Discussions on proposals concerning marketing and advertising fell under four general categories: mandatory disclosures, truth in advertising (material representations and omissions), marketing practices, and customer privacy. I. Mandatory Disclosures No consensus was reached on the issues involved in mandatory disclosures in advertising and marketing. The Customer Choice Act addresses the general issue in §7-507 (J) which requires electricity suppliers to post on the Internet information that is readily understandable about its services and rates for small commercial and residential electric customers. Section 7-505 (F)(4) requires the AGCPD to develop and maintain information regarding rates and services for small commercial and residential electric customers of licensed electricity suppliers, readily understandable and formatted to provide a comparison of rates and services among electricity suppliers of similar services. Section 7-507 (E)(2) requires each electricity supplier to provide adequate and accurate customer information to enable customers to make informed choices regarding the purchase of any electricity services offered by the electricity supplier. CP-8 The CPWG's discussions began with the issue of whether any disclosures should be mandated at all. Two general positions - that certain disclosures either should or should not be required - emerged. Consumer Advocates3 urged mandating specific disclosures and would require consistent, uniform disclosures of pricing, terms and conditions of all supplier offerings, citing a need for customers to be provided with clear and understandable information about the terms and conditions, so that they may make meaningful comparisons between competing offers. All parties agree that advertising must not be false or misleading, but MAPSA, the utilities4, and the Commission Technical Staff believed that mandating disclosures was inconsistent with the concept of an open market, which would by its own operation develop ways to give customers the information they need, or the supplier simply would not be able to sell. They also believed that there may be offers that are not capable of comparison on a uniform or standard basis, and that requiring offers to be comparable would stifle innovation. Practical concerns included the difficulty in mandating disclosures on advertisements that originate outside of Maryland (for instance, many Marylanders receive their television, radio and/or newspapers from Washington D.C., Philadelphia and Pittsburgh), and whether every instance of 3 Unless otherwise noted, the "Consumer Advocates" refers to the Office of People's Counsel ("OPC"), the AGCPD, the Maryland Energy Administration ("MEA") and the Division of Consumer Affairs of the Department of Housing and Community Affairs of Montgomery County ("Montgomery"). 4 Unless otherwise noted, the "Utilities" refers to BGE, Delmarva Power and Light Company d.b.a. Conectiv Power Delivery, Potomac Electric Power Company, The Potomac Edison Company d.b.a. Allegheny Power, Choptank Electric Cooperative and Southern Maryland Electric Cooperative. CP-9 advertising or what types of advertising would be required to carry the mandatory terms (e.g., would the terms mandated be required in "image" advertising?). The first practical problem seems insurmountable; the second concern was addressed with the proponents' position that only communications making an offer for electric service would be required to carry the mandatory disclosures. Disagreements about specific proposals also occurred. Consumer Advocates recommended that mandatory disclosures be required to be made clearly and conspicuously, and that uniform formats be developed to present price information, information about the terms and conditions of service, and power sources and environmental disclosures. Specific proposals included the following: 1. Consumer Advocates recommended that the price of electric generation should be expressed uniformly (e.g., cents/kwh) throughout the industry, with uniform definition of the term "average cost" and a uniform standard to compare prices that vary according to amount used or time of usage. Consumer Advocates believed this information was vital to the goal of providing customers with sufficient information to make comparisons among suppliers, but MAPSA, the utilities and the Commission Technical Staff were concerned that having to develop uniform pricing information might not be possible in some cases and would stifle creativity in the industry. For instance, new ways of pricing electricity, such as a flat fee per month or bundling electric service with other services, would go unexplored, depriving customers of pricing and service CP-10 mechanisms that may be of value to them. 2. Consumer Advocates believed the terms and conditions of any offer should be disclosed in price advertising (that is, when an advertisement contains any representation regarding the price a consumer would pay). In such advertisements the terms and conditions of the offer (such as the duration of any contract, whether the offer is for a fixed or variable price that is some percentage or amount above or below the "market price" with disclosure on how the "market price" is calculated, description of any notice required for termination, disclosure of any costs for early termination, and disclosure that the offer is for generation only and does not include the cost of transmission and distribution) become material. MAPSA, the utilities, and the Commission Technical Staff reiterated that such specific detail in advertising is unduly burdensome, expensive and difficult as a practical matter. 3. Consumer Advocates5 recommended that disclosure of power sources and emissions information in a standard format should be considered if such disclosures would provide accurate and meaningful information to consumers in comparing offers. They believe that if uniform disclosures are not mandated, any power source or environmental claims voluntarily made in the marketing or advertising of electricity must be capable of substantiation. MAPSA, the utilities and the Commission Technical Staff noted that the Commission had rejected requiring environmental disclosures in its Orders in Case No. 8738. This was one issue in which the uncertainty surrounding the legislation being debated by 5 Montgomery's position is that disclosure of suppliers' fuel mixes and air emission rates should be mandated; therefore, Montgomery did not join in this Consumer Advocate position. CP-11 the Maryland General Assembly created difficulty for the working group; the group decided it could not reach consensus and would table discussion, agreeing to let the legislation passed by the General Assembly resolve the issue. The General Assembly's decisions in The Customer Choice Act are set out in §7-505 (B)(4), requiring the Commission to require each electric company and electricity supplier to provide information including disclosure, every six months, of a uniform common set of information about (1) fuel mix (including categories of electricity from coal, natural gas, nuclear, oil, hydroelectric, solar, biomass, wind and other resources, or disclosure of a regional fuel mix average; and (2) emissions, on a pound per megawatt-hour basis, of pollutants identified by the Commission, or disclosure of a regional fuel mix average. Other provisions of The Customer Choice Act through which the General Assembly has chosen to protect the environment are (1) §7-505 (B)(12), requiring the Commission, in consultation with the Department of the Environment, to adopt appropriate measures to maintain environmental standards, adapt existing programs, and develop new programs as appropriate to ensure compliance with Federal and State environmental protection standards; (2) §7-516 (B), requiring investor-owned electric companies to continue to provide at least the same percentage of electricity from available renewable energy resources, at a reasonably comparable cost, as the electric company provided in 1998; (3) §7516 (C), requiring the Commission in consultation with the Maryland Energy Administration to report on or before February 1, 2000 to the General Assembly on the feasibility, costs and benefits of requiring a renewables portfolio standard CP-12 (including a two-tiered standard); and (4) §7-516 (D), expressing the General Assembly's intent to minimize the effects of electric restructuring on the environment and requiring Maryland electric companies to conduct and submit a study to the Commission and the Department of the Environment that tracks shifts in generation and emissions as a result of restructuring the electric industry, one year after the initial date of implementation of customer choice. If review of the study shows a higher "emission burden" in Maryland, a surcharge or other mechanism may be considered. II. Truth in Advertising (Material Representations and Omissions) With the passage of The Customer Choice Act, the General Assembly gave the Commission the authority to require safeguards deemed necessary by the Commission to ensure the creation and maintenance of a competitive electricity supply and electricity supply services market (The Customer Choice Act, § 7-505(B)(10)(ii)(4)); and to adopt regulations or issue orders to protect consumers from anticompetitive and abusive practices and establish reasonable restrictions on telemarketing (The Customer Choice Act, § 7-507(E)). Section 7505 (B)(7) of the Act prohibits an electricity supplier from engaging in marketing, advertising, or trade practices that are unfair, false, misleading, or deceptive. On the other hand, the General Assembly also provided that nothing in The Customer Choice Act may be construed to affect the authority of the AGCPD to enforce violations of Titles 13 and 14 of the Commercial Law Article or other applicable State law or regulation in connection with the activities of electricity CP-13 suppliers (The Customer Choice Act, § 7-507(Q)) or construed as preventing the application of State and Federal consumer protection laws (The Customer Choice Act, § 7-505 (B)(11)). The Commission must also consult with AGCPD before issuing consumer protection regulations (The Customer Choice Act, § 7507(O)). The CPWG believes that The Customer Choice Act has granted the Commission the necessary authority to adopt the provisions of the Consumer Protection Act as Commission regulations, applicable to suppliers, if it so desires, and to enforce any regulations through its licensing authority (The Customer Choice Act, § 7-507(A)-(D)) and its dispute resolution authority (The Customer Choice Act, § 7-507 (E)). The CPWG agrees that truth in advertising enforcement, and other similar matters, should be handled in a manner similar to the AGCPD's interaction with other State agencies, such as the Home Improvement Commission, in performance of those agencies' enforcement duties. This concern will be discussed more thoroughly in the section of this report on Dispute Resolution. III. Marketing Practices Consumer Advocates argued that suppliers and marketers of electricity should be subject to requirements of certain existing laws (made enforceable by the Commission, as described in Section II above) and new requirements the Commission would oversee. Consumer Advocates would have existing laws concerning telemarketing (Md. Ann. Code, Com Law §§13-301, et. seq.), door-to- CP-14 door sales (Md. Ann. Code, Com Law §§14-301, et. seq.), prizes and incentives (Md. Ann. Code, Com Law §§13-301, et. seq.), referral sales (Md. Ann. Code, Com Law §13-304), and pyramid schemes and other securities violations (Md. Ann. Code, Com Law §§14-101, et. seq. and §§14-301, et. seq.; Md. Ann. Code, Art. 27 §233D) come under Commission oversight as well as being subject to AGCPD enforcement action. To these Consumer Advocates would add limitations on marketing, such as time constraints and prohibitions against discrimination. As with truth in advertising issues, MAPSA, the utilities and the Commission Technical Staff preferred the electric industry be treated as any other, with the AGCPD exercising its existing jurisdiction as it does now with other industries. Again, the jurisdiction of the Commission under the new legislation was pertinent to the discussion. The Commission has clearly been granted authority to establish reasonable restrictions on telemarketing (The Customer Choice Act, § 7-507 (E)(3); authority to adopt consumer protection regulations applicable to suppliers, if it so desires, and to enforce any regulations through its licensing authority (The Customer Choice Act, § 7-507(A)-(E) and (K)) and its dispute resolution authority (The Customer Choice Act, § 7-507 (E)). The Customer Choice Act also prohibits slamming (The Customer Choice Act, § 7-507 (G)). The new proposals concerning limitations on marketing also generated the following specific debates: 1. Consumer Advocates urged that no marketing of specific electricity services or prices be allowed during the period before the Commission's CP-15 consumer education program is operational (the "pre-enrollment period"). Once restructuring has begun, no marketing, solicitation, acceptance of deposits or contract execution would be permitted until the supplier is licensed by the Commission. They also argued that under The Customer Choice Act, § 7-507 (A) an electricity supplier may not advertise without a license. MAPSA, the utilities and the Commission Technical Staff of these restrictions noted that marketing is already occurring in the sense of "image" advertising, and that as noted before, Maryland could not control the marketing that originates in Washington D.C., Pennsylvania or other states. They also cited First Amendment rights to market without the restrictions proposed and disagreed with Consumer Advocates' position that under The Customer Choice Act, § 7-507 (A) an electricity supplier may not advertise without a license. MAPSA, the utilities and the Commission Technical Staff also objected to any application to nonresidential customers of the ban on marketing by unlicensed suppliers and marketers once restructuring has begun. They noted that some suppliers may want to serve only commercial or industrial customers and may not be interested in being licensed until they know they have a customer. Suppliers and marketers should be able to market to commercial and industrial customers before being licensed. Consumer Advocates did not object to the opponents' position in general, if such marketing efforts do not spill over to residential customers. In addition, Consumer Advocates were uncertain about whether small commercial customers should be treated as residential or commercial customers. CP-16 2. Consumer Advocates suggested the group recommend legislation on discrimination, such as the following: It shall be unlawful for any electric service provider to discriminate against any person with respect to any aspect of a consumer transaction on the basis of race, color, creed, national origin, age, gender, religion, source of income, receipt of public benefits, family status, credit status, sexual orientation, disability or geographic location. Opponents believed the restrictions were too broad, particularly in their prohibition of discrimination on the basis of credit status. A customer's credit status is a time-honored basis on which a merchant may decide with whom he does business. Also, suppliers should not be required to serve the entire state. The Customer Choice Act, § 7-505 (B)(3) requires the Commission to order an electric company to adopt policies and practices reasonably designed to prevent (1) discrimination against a person, locality, or particular class of service or give undue or unreasonable preference in favor of the electric company's own electricity supplier, other services, divisions, or affiliates, if any; and (2) any other forms of self-dealing or practices that could result in noncompetitive electricity prices to customers. Electricity suppliers may not discriminate against any customer based wholly or partly on race, color, creed, national origin, or sex of an applicant for service or for any arbitrary, capricious, or unfairly discriminatory reason; and may not refuse to provide service to a customer except by the application of standards that are reasonably related to the electricity supplier's economic and business purposes (The Customer Choice Act, § 7-507 (H)). CP-17 IV. Customer Privacy Consumer Advocates noted that customer privacy issues first arise at the marketing stage of transactions between suppliers and customers. Consumer Advocates are especially concerned that information they believed to be private might be disclosed to assist supplier marketing efforts, and that customers who did not want to be directly contacted by marketers (e.g., deluged by telephone calls during dinner) would be contacted against their wishes. The group decided that privacy issues arose in several transaction stages and that it would deal with these issues as a part of discussions on enrollment of customers. CP-18 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART THREE CUSTOMER ENROLLMENT PRACTICES The Customer Choice Act , § 7-507(E)(4) requires the Commission to adopt regulations or issue orders to establish procedures for contracting with customers. Section 7-510 (A) requires customer choice to be phased-in for residential customers, with one-third of customers having the opportunity for choice on July 1, 2000, a second third on July 1, 2001, and all customers on July 1, 2002. On January 1, 2001, the entire industrial class and the entire commercial class of each electric company shall have the opportunity for customer choice. The Commission may accelerate or delay the initial implementation date of July 1, 2000 by up to 3 months and accelerate any of the other implementation dates and phase-in percentages, for good cause shown and if the Commission finds the action to be in the public interest (§7-510 (B)). Under §7-510 (A)(2), the Commission may adopt a separate schedule for municipal electric utilities, and under §7-510(A)(1)(V), must adopt a separate schedule giving all customers of each electric cooperative choice by July 1, 2003. The Customer Choice Act, §7-510(E) requires the Commission to adopt procedures to allocate any unused opportunity for customer choice among customer classes. CP-19 I. Phase-In of Enrollment The CPWG, in response to a request from the TIWG, discussed and made recommendations to the TIWG for phase-in of customer enrollment in February, 1999. Those recommendations are set out in Exhibit 2 to the CPWG's Second Interim Report. For electric utilities who by settlement permit choice for all their customers at once, such as PEPCO in Case No. 8796, phase-in recommendations are not applicable. The enactment of The Customer Choice Act has also rendered some of those recommendations moot. For instance, the availability of choice to the entire commercial and industrial classes on January 1, 2001 eliminates any concern of allocating unused residential allotment to other classes of customer (although there is still an issue of reallocating unused allotment from other classes to the residential class). The CPWG was asked by the TIWG to discuss phase-in of enrollment and to recommend either a one-step or a two-step enrollment process. In a "onestep" enrollment process, the phase-in allotment (one-third each year of a threeyear phase-in of competition) would be filled on a first-come, first-served basis, by the first one-third whose names are forwarded to the LDC by an alternative electric service supplier as contracting with that supplier. Under a "two-step" enrollment process, customers first indicate via a post-card or other indication to the utility that they want to participate in choice of supplier; the first one-third would be accepted, their names made available to interested alternative suppliers or other marketers, and whoever chose to go to another supplier would CP-20 do so. The CPWG recommends the "one-step" process because there are fewer administrative costs with a "one-step" than a "two-step" procedure, since a list of participating customers does not have to be developed and maintained. The alternate suppliers and marketers are not provided a list of customers to direct their attention to and must advertise to all customers (the CPWG explicitly recommends that LDCs not be required to develop such a list). In a "two-step" procedure, it is possible that fewer than all of the customers admitted to the program in the first step will actually choose alternate suppliers in the second step; therefore, the potential for more customers to choose alternate suppliers is greater with the "one-step" procedure. Further, reallocating unused allotment is not as significant an issue with a "one-step" process, because the period within which to choose is open until the allotted number of customers actually chooses an alternate supplier. Another phase-in issue is how to handle the situation if a phase-in allotment is oversubscribed. The CPWG considered this issue before the passage of The Customer Choice Act and so considered it when the possibility that the commercial and industrial classes might be oversubscribed was a problem. With the enactment of The Customer Choice Act, this is only an issue for the residential class, and the likelihood of oversubscription during the phasein of the residential class is admittedly small. Nevertheless, the CPWG's recommendation that there should be no prorationing of load if a class is oversubscribed is still pertinent. Prorationing of load refers to the load of an CP-21 individual customer being served by both a regulated utility and an alternate supplier during the phase-in of customer choice and is a potential response to the possibility of competitiveness between commercial and industrial customers if one is permitted to choose an alternate supplier and his competitor is not. Objections raised to prorationing include its complexity, the cost to build systems to handle it given that it would not last beyond the phase-in period (two years), and the potential for customer confusion. These objections are perhaps even more valid when referring to the residential class. Therefore, phase-in enrollment should be strictly first come, first served, until the allotment is full, and then phase-in should be closed until the next period. The CPWG also considered other enrollment issues, for which recommendations either were not requested or not yet made. The CPWG decided that there should be no eligibility requirements or exclusionary conditions for customers participating in choice (for instance, choice will not be restricted to those who are not in arrears on their bills when enrollment begins). Restrictions on switching suppliers were considered, with no recommendations made. The TIWG requested the CPWG address the issue of "seasonal gaming." LDCs requested that any customer returning to standard offer service from competitive service be required to remain for at least one year, to prevent "seasonal gaming" (where attainable under the LDC's rates), wherein a customer could leave a supplier or a supplier could stop serving customer(s) during periods in which costs are high, leaving the customer(s) to standard offer service when the LDC has not planned its system to handle them and must go out into a high cost CP-22 market to accommodate them. LDCs believe this is a particular problem since rates for standard offer service will be capped at reduced rates following reductions that may be required by The Customer Choice Act, § 7-505(D). Commercial and Industrial customer representatives believed that at least when a customer is returned to standard offer service because his competitive supplier did not deliver, he should be permitted to choose another competitive supplier and not be required to remain on standard offer service for any period of time. Consumer Advocates believed there should be no restrictions on the customer's ability to switch suppliers. MAPSA strongly believed that the provision recommended by the LDCs is anticompetitive and contrary to the notion of customer choice. CPWG members were not able to agree on this issue. II. Customer Information The CPWG debated what customer-specific information should be disclosable without consent, with Consumer Advocates proposing no information (including name, address and telephone) be disclosable without prior written consent, MAPSA seeing any written authority requirement as a barrier to market entry, and utilities believing that at least marketing lists with names and addresses should be marketable to third parties, as in other industries. Commercial and Industrial customers6 believe their customer-specific consumption data are proprietary and may be competitively sensitive and should not be released without their prior consent. 6 The Customer Choice Act , §7-505 Commercial and Industrial customers were represented by the Maryland Industrial Group ("MIG") and Maryland Retailers Association ("MRA"). CP-23 (B)(6) requires the Commission to issue orders or regulations to prevent an electric company and an electricity supplier from disclosing a retail electric customer's billing, payment, and credit information without the retail electric customer's consent, except as allowed by the Commission for bill collection or credit rating reporting purposes. The legislation does not address whether other information may be disclosed without consent, but Consumer Advocates are still concerned that disclosure of name, address and telephone numbers will lead to customers being deluged with unwanted marketing efforts7. MAPSA is equally concerned that lack of information will create market barriers and that customer information should be available on a no more restrictive basis than it currently is. The CPWG has not been able to reconcile these two concerns. III. Selection of Supplier and LDC Processing Consumer Advocates proposed that a written contract with a supplier should be required in all cases to initiate LDC processing of the choice of an alternate supplier. They argued that "wet" signatures are already required for some kinds of transactions under the CPA,8 and that a supplier should not initiate a switching transaction until a signed contract is received. MAPSA and the Commission Technical Staff objected to the requirement for a "wet" signature, believing telephone and Internet enrollment or enrollment through an agent 7 Whether the FCC "do not call" list regulations were applicable was discussed briefly, but the CPWG was not able to develop enough information to make a recommendation on the use of this list. 8 For instance, the Door-to-Door Sales Act (Com Law §14-301 et seq.) and the Telephone Solicitation Act (Com Law §14-2201 et seq.). CP-24 should be permitted without "wet" signatures. It was also noted that actual processing would be accomplished through electronic data transfers rather than the transfer of written documents. Utilities did not take a position, but do not want to be responsible for keeping or verifying written contracts. The Customer Choice Act at § 7-507 (Q) provides that nothing in the Customer Choice Act may be construed to affect the authority of the AGCPD to enforce violations of Titles 13 and 14 of the Commercial Law Article or any other applicable State law or regulation in connection with the activities of electricity suppliers. The CPWG could not reach consensus on whether a "wet" signature should be required. The CPWG was able to agree on other procedures involved in processing choice, however, and suggests that the following method would accomplish switching and would also assist in preventing slamming and cramming. Under this procedure, a customer will enroll directly with a supplier, who will retain all customer enrollment records and transmit notice of the selection to the LDC electronically at least 17 business days prior to the customer's meter reading date, which will be the effective date of the choice. Without unnecessary delay the LDC will send a notice to the customer of receipt of the selection from the supplier, giving the customer 10 days to rescind the contract.9 The CPWG could not agree on what priority should be established if a customer chooses (and does not rescind) more than one supplier. Some members believed the last received by the LDC should take priority, but others believed the first submitted before the submission deadline should take priority. If a customer rescinds all choices or 9 The time periods recommended here are based on recommendations of the TIWG. CP-25 the selection of a new supplier does not go forth for other reasons, the CPWG recognizes that there is an issue of whether the customer should be placed on standard offer service or be returned to his former supplier. The CPWG did not have an opportunity to fully discuss this issue. CP-26 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART FOUR CONSUMER-SUPPLIER AGREEMENT The Customer Choice Act, §7-507 (E)(4) requires the Commission to establish procedures for contracting with customers. The CPWG discussed requirements and restrictions in supplier contracts with customers, but was not able to reach consensus on most issues. Consumer Advocates, as noted earlier, wanted the requirement of a written contract, signed by the customer, but MAPSA and the Commission Technical Staff objected to the "wet" signature in view of the desirability of telephone and Internet enrollment (see the discussion in Part Three above). Consumer Advocates wanted certain mandatory terms to be included in contracts10, but MAPSA, the utilities and the Commission Technical Staff believed not all the information requested was necessary for every customer, and that no particular format or terms should be mandated, allowing the market to set practices and terms. 10 Proposed mandatory terms included itemization or description of the service offer; uniform unit pricing; notice that generation as opposed to transmission or distribution was being offered; description of billing options; duration of the agreement (including initial time period, rollover provisions with a mandatory 90 day notice, early cancellation penalties); deposit requirements (amount, return procedures, use and protection), payment due date and mailing address, late fees, notice concerning early termination by the supplier, notice concerning early termination by the customer, customer service information (including a toll-free telephone number, mailing address, and dispute process information); notice of the impact of billing option choices on existing arrangements with the LDC (including budget billing, extended due date, and other billing plans); and notice concerning the impact of choice on MEAP grants. CP-27 Of the mandatory terms discussed, uniform unit pricing generated the most discussion. See the discussion in Part Two, Section 1 above. Consumer Advocates wanted a restriction on early termination fees in customer contracts with suppliers. They believed no early termination fee should be charged if the customer ceased to be a customer of the LDC (i.e., the customer moved), or if a billing dispute resulted in a disposition favorable to the customer. There was no consensus reached. CP-28 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART FIVE BILLING REQUIREMENTS The Customer Choice Act, §7-505 B (5) requires that the Commission, by regulation or order, require bills for electricity service indicate charges for distribution and transmission, transition charge or credit, universal service program charges, customer chargers, taxes, and other charges identified by the Commission. The Customer Choice Act , §7-507 E (5) requires the Commission to establish requirements and limitations relating to billing. The Customer Choice Act , §7-507 F provides that in accordance with regulations or orders of the Commission, and in addition to the requirements of §§ 7-505 B (5) and 7-507 E (2), electricity bills for competitive and regulated electric services provided to customers may provide the identity and phone number of the electricity supplier of the service, sufficient information to evaluate prices and services, and information identifying whether the price is regulated or competitive. Section 7507 E(2) requires the Commission to adopt regulations or issue orders to require each electricity supplier to provide adequate and accurate customer information to enable customers to make informed choices regarding the purchase of any electricity services offered by the electricity supplier. The CPWG identified issues concerning billing matters such as minimum CP-29 bill content requirements and bill format, but considered these issues to be within the purview of the Competitive Billing Working Group. Therefore, the CPWG defers to that group for resolution of these issues and the implementation of the directives in The Customer Choice Act. The CPWG also discussed whether there should be restrictions against negative option billing, but was unable to reach consensus on whether The Customer Choice Act bans this practice11 or whether it should be allowed if The Customer Choice Act does not ban it. The Customer Choice Act , §7-507 (G)) provides that an electricity supplier or any person or governmental unit may not, without first obtaining the customer's permission, make any change in the electricity supplier for a customer or add a new charge for a new or existing service or option. 11 CP-30 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART SIX DISPUTE RESOLUTION . The Customer Choice Act directs that the Commission require appropriate complaint and enforcement procedures (§ 7-505(B)(10)(ii)3) and establish procedures for dispute resolution (The Customer Choice Act , § 7-507(E)). As noted in Part One of this Report, the CPWG debated how a process for resolving consumers' complaints with suppliers would be structured, i.e. what roles the Commission or the AGCPD would fulfill in a dispute resolution procedure, given the jurisdiction The Customer Choice Act grants those two agencies. The CPWG members basically agreed that there should be a simple, expeditious complaint resolution process. The OPC wanted to ensure that residential customers had access to dispute resolution through the Commission, as currently exists with a regulated industry. All CPWG members agreed that "pattern and practice" violations involving unfair and deceptive trade practices should continue to be handled by the AGCPD. Some suggested that the Commission should be a "triage" office, taking in customer complaints, referring those involving Titles 13 and 14 of the Commercial Law Article (CPA violation complaints) to the AGCPD and handling internally those within the Commission's particular expertise and/or the jurisdictional grant of The Customer Choice Act CP-31 (telemarketing, for instance). Any complaint by the customer should begin with the customer's attempt to resolve a dispute directly with the supplier, who should have an internal dispute resolution process. If the customer is not satisfied, he should then proceed to the Commission. The CPWG members were divided on whether current COMAR procedures should be applied as is or should be streamlined into a separate process, but all agreed they are an appropriate basis for Commission handling of a dispute. The Commission Staff should attempt to obtain an informal resolution, but if this is not possible, the complaint should proceed as described above, with the Commission either referring those involving Titles 13 and 14 of the Commercial Law Article to the AGCPD, or handling internally those within the Commission's particular expertise and/or the jurisdictional grant of The Customer Choice Act. The CPWG debated how a customer complaint should impact a supplier's license. This issue is addressed in The Customer Choice Act, §7-507 (K). CP-32 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 PART SEVEN COLLECTION PRACTICES AND REQUIREMENTS SERVICE TERMINATIONS The Customer Choice Act, § 7-507 (E) requires the Commission to establish requirements and limitations relating to deposits, billing, collections and contract cancellations; and to establish provisions for referral of delinquent accounts to standard offer service. As a general principle, the CPWG decided that only the LDC should have the ability and responsibility for terminating a customer's service for failure to pay LDC regulated charges, as is currently permitted under the Commission's regulations. Per The Customer Choice Act, § 7-507 (E), a supplier should be able to cancel a contract with a customer if the customer fails to fulfill his obligations, but the customer should then be transferred to standard offer service. The CPWG did not have the opportunity to discuss several of the issues related to standard offer service (e.g., whether a minimum term should be required for standard offer service, should the LDC be able to charge a deposit before accepting a customer to standard offer service), but the group did decide that termination provisions of the Public Service Commission Law and COMAR should apply to termination of standard offer service. CP-33 One of the issues the TIWG requested the CPWG to address was the application of payments when a customer makes only a partial payment on a consolidated bill issued either by the supplier or the LDC. The CPWG recommended to the TIWG that partial payments be first applied to LDC arrearages, then LDC current charges, then supplier arrearages, then supplier current charges, then value-added charges. The supplier members of the CPWG disagreed, and still disagree, with the recommendation. The CPWG's recommendation was based on the fact that a customer would only face disconnection for LDC charges. Customers need protection to ensure that they are not denied service due to payment posting issues. In addition, the recommended approach reduces customer confusion and facilities dispute resolution arising from payment application issues. This approach has also been used successfully in BGE's customer gas pilot. The supplier members of the CPWG, on the other hand, believe that LDC arrearages should be paid first, then supplier arrearages, then LDC current charges, then supplier current charges, then value-added charges. Suppliers argued that since distribution utilities will no longer have a service monopoly, they should not retain a payment monopoly. Further, LDCs are ensured recovery of at least some percentage of uncollectible accounts from ratepayers and should not receive all payments ahead of suppliers, who must absorb or collect delinquent accounts directly out of their own funds. Suppliers also argued that the availability of grants or offsets for lowincome customers mitigates LDC losses from non-paying customers, and therefore suppliers should be afforded an equal opportunity to obtain portions of CP-34 partial payments that may be offset by such grants. Notwithstanding the suppliers' position, the CPWG continues to recommend that LDCs be paid in full before suppliers are paid. The CPWG has agreed on certain procedures when the supplier discontinues a contract with a customer. The supplier should give written notice to the customer; the CPWG understands that the TIWG is recommending a minimum time period requirement of 47 days and will discuss this in their report. The notice should specify reasons for the contract termination and explain the consequences (e.g., the customer must either select a new supplier or be returned to standard offer service). The effective date of the contract termination must coincide with a meter reading date (although this standard would not apply if the customer is on a program that does not require meter readings). If a supplier withdraws from service to all customers without giving notice, the LDC will provide that information to the customers (although LDCs expressed concern about being accused of making disparaging remarks about a supplier, a potential violation of a Code of Conduct). If the customer terminates his contract with a supplier (presumably within the terms of the agreement between the two), he should be required to notify both the supplier and the LDC. The LDC will confirm the contract termination with the customer and explain to him the consequences, and the customer will either choose a new supplier or return to standard offer service. The CPWG did not have an opportunity to discuss the terms under which standard offer service should be conducted. CP-35 FINAL REPORT CASE NO. 8738 INITIAL ROUNDTABLE CUSTOMER PROTECTION WORKING GROUP MAY 3, 1999 CONCLUSION In light of the CPWG's absence of consensus on many issues, the CPWG respectfully requests that the Commission institute a process to decide outstanding issues. The CPWG will reconvene to develop an issues list, if the Commission so desires. The members of the CPWG are prepared to file position papers expeditiously, as the Commission may require. Once contested issues have been resolved by a Commission ruling, the CPWG will be available to assist the Commission by drafting regulations appropriate to carrying out the Commission's intent. CP-36 EXHIBIT 1 FOR INFORMATIONAL PURPOSES – ABSENCE OF A COUNTERARGUMENT DOES NOT IMPLY CONSENSUS – SEE REPORT FOR FURTHER DISCUSSION. JURISDICTION OVER SUPPLIERS AND RELATED THIRD PARTIES ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE Electric service providers (ESPs) include suppliers, brokers, marketers, aggregators, marketing agents and third party billers CC ACT-1-101 J PSC will have authority over ESPs and related third parties CC ACT - 7-505 B (10)(ii) 7-507 E PSC will license ESPs CC ACT - 7-507 A - D Both PSC and AG to have jurisdiction over customer protection CC ACT - 7-505 O and Q 7-505 B (11) Customer Protection provisions apply to all in supplying, marketing, billing CC ACT - 1-101 J PSC will have a dispute resolution process CC ACT - 7-505 B (10)(ii)(3) 7-507 E (7) Amendment of local laws may be required in localities with Consumer Protection Acts ( CPA) that exempt public service companies Consumer means residential customer. Applicability to small commercial still a question Some believe customer protections Should apply to small commercial Class; some think not since CPA does not apply to small commercial Both PSC and Local Distribution Company (LDC) should keep list of name and license # of ESP, Some believe only PSC should Keep a list to prevent the LDC Being seen as endorsing any ESP LDC territory operating in, types of customers served, and service restrictions CP-37 MARKETING/ADVERTISING ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE A. Mandatory disclosures 1. Must be clear & conspicuous CC ACT - 7-507 E (2) 7-507 J 2. Uniform format for: CC ACT – 7-507 F(4) a. price information i. Uniform (cents/kwh) ii. If price varies according to amount or time of use, must have uniform format iii. Uniform def. "average cost" Some believe specific uniform pricing and disclosure requirements are unduly burdensome, overly constrictive, and inconsistent with market approach b. terms and conditions i. Duration of contract ii. Fixed or variable price and reference to market price iii. Termination notice reqs & early term. Costs iv. Generation only offer c. power source and environmental disclosures CC ACT - 7-505 B (4), B (12) 7-516 B-D B. Truth/material representations and omissions CC ACT - 7-505 B(7) 7-505 B(10)(ii)(4), 7-507 E No unfair or deceptive trade practices as defined in CPA MD Ann Code Com L 13-301 CC ACT – 7-507 O & Q 7-505 B(11) C. Marketing Practices 1. Telemarketing CC ACT - 7-507 E(3) MD Ann Code Pub Util 8-204 a. prohibitions as in CPA MD Ann Code Com L 14-2203 CP-38 MARKETING/ADVERTISING (cont.) ARGUMENT b. telephone solicitations to be done as follows i. Agreements reduced to writing, signed by customer ii. Contract terms match offer; no exclusion of material representations iii. Notice that "You are not obligated to pay" until you sign a contract iv. No charge until contract is signed COUNTERARGUMENT RELEVANT STATUTE OR RULE Some objected to the necessity of a "wet" signature and also want agent to be able to sign for a customer; suggested following the PA enrollment confirmation procedure as antislamming protection CC ACT – 7-507 G (antislamming) c. Comply w/auto dial law MD Ann Code Com L 14-1313 MD Ann Code Pub Util 8-204 d. Comply w/fax prohibition rule 47 CFR 64.1200 e. comply w/FCC Telephone Solicitation Rule and FTC Telephone Sales Rule i. No calls before 8am, or after 9 pm ii. "do not call" list 16 CFR 310.1, et seq. 2. Door to door sales must comply w/door to door sales act MD Ann Code Com L 14-301 3. Limitations on marketing a. time constraints i. No marketing during pre-enrollment period ii. Once restructuring begun, no marketing, solicitation, taking deposit, making contract until ESP is licensed Some oppose for First Amendment reasons, impracticality CP-39 MARKETING/ADVERTISING (cont.) ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE b. Recommend legislation Some believe ESPs should be against discrimination based able to choose to whom they on race, color, creed, nat origin, sell to based on credit status age, gender, religion, source of income, receipt of public benefits, family status, credit status, sex orientation, disability or geographic location CC ACT - 7-505 B(3), 7-505 B(10)(ii)(2) 7-507 H (no discrimination based on race, color, creed, national origin, sex or any arbitrary, capricious or unfairly discriminatory reason; no discrimination except by standards reasonably related to ESP's economic and business purposes) 4. Prizes/incentives offers must comply w/CPA MD Ann Code Com L 13-305 5. Referral sales must comply w/CPA MD Ann Code Com L 13-304 6. ESP must comply with laws on pyramid schemes and multilevel marketing MD Ann Code Com L 14-101 MD Ann Code Com L 14-301 MD Ann Code Art 27 Sec 233D CP-40 CUSTOMER ENROLLMENT PRACTICES ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE (proposals in phase-in section (A) reflect recommendations the workgroup made to the Technical Implementation Workgroup) A. Phase-in issues 1. No eligibility requirements any customer may participate 2. One-step enrollment, with first-come, first served and enrollment to remain open until allotment filled a. Undersubscription is not an issue because enrollment is not closed until allotment is filled CC ACT - 7-510 E (requires PSC to adopt procedures to allocate any unused opportunity for customer choice among customer classes) b. no proration when class is oversubscribed - strictly first come, first served c. LDCs will not provide a list of interested customers to ESPs B. Customer Privacy 1. No disclosure of customer Specific info w/o written Authorization; includes name, address, phone number, Usage and credit history C. Selection of supplier-LDC processing 1. customer authorization must be in writing Some objected to requirement for written authority Some wanted ability to sell mailing lists CC ACT - 7-505 B(6) (prohibits disclosure of billing, payment and credit history w/o customer consent) Some objected to the necessity of a "wet" signature and want agent to be able to sign for a customer – suggested enrollment confirmation proc. as antislamming protection CC ACT – 7-507 Q CP-41 CUSTOMER ENROLLMENT PRACTICES (cont.) ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE 2. change effective on next meter read date after time for verification 3. LDC provides notice to customer of receipt of selection by ESP Acceptable, but some think LDC should be able to charge suppliers a fee for the confirmation process (not within any rate cap) or recover in rate base a. ESP must forward customer selection at least 17 days prior to effect meter read date (submission deadline) b. customer to be given a period of 10 days to rescind c. if customer selects and Some believe first in before does not rescind more than submission deadline should one supplier, last contract take priority before submission deadline takes priority 4. If customer rescinds or ESP selection does not go forward for other reasons, customer returns to standard offer service Some want 1year requirement if CC ACT - 7-510 C customer returns to standard Offer service to avoid seasonal gaming; others oppose or want shorter period Some want customer returned To immediate past supplier rather than standard offer service 5. ESP will retain customer records CP-42 CONSUMER-SUPPLIER AGREEMENT ARGUMENT COUNTERARGUMENT A. Written agreement, signed by customer, required Some object to "wet" signature B. Mandatory contract terms Some think not all information is relevant to every customer may not need to be in contract, Don't need formal format in contract or bill, but market should be allowed to address 1. Itemized description of service offer a. electric supply, distinct distinct from T&D, etc. b. billing options c. other serv/prods offered 2. Price a. uniform unit pricing Some opposed to required uniform pricing b. separate itemization for other products and services 3. Duration of agreement a. initial time period Some want 1year requirement if b. rollover provisions w/mand- customer returns to standard atory notification by ESP 90 Offer service to avoid seasonal days prior to rollover date gaming; others oppose or want shorter period c. no early cancellation fee or Some have no objection to fee penalty if customer no longer if it is set out in contract in LDC territory or wins billing dispute 4. Deposit requirements a. amount of deposit b. use, protection and return procedures CP-43 RELEVANT STATUTE OR RULE CC ACT - 7-507 E (4) CONSUMER-SUPPLIER AGREEMENT (cont.) ARGUMENT COUNTERARGUMENT 5. Payment terms & procedure a. payment due date b. mailing address 6. Late fees - amount or percentage calculation 7. Notice if early termination by ESP a. notice period b. reasons c. consequences of termination & description of switching policy 8. Notice-early term by cust a. notice period b. reasons c. consequences of termination & description of switching policy 9. Customer Service Information a. toll-free number b. mailing address c. state agency dispute process information 10. Notice re: impact of billling option choices on existing arrangements with LDC a. alternative payment plans budget billing extended due date other Some do not believe this is needed 11. Notice re: impact of choosing an ESP on MEAP grants, USPP, etc. Some do not believe this is needed CP-44 RELEVANT STATUTE OR RULE BILLING REQUIREMENTS ARGUMENT COUNTERARGUMENT Competitive Billing Workgroup is addressing RELEVANT STATUTE OR RULE CC ACT - 7-507 E(2) and E(5) Requirements apply to bill issued by ESP (ESP only or consolidated) or to ESP component of bill issued by LDC LDC bill for regulated services should remain subject to existing COMAR, with possible modifications to include some requirements applicable to ESPs A. Bill Content COMAR 20.25.01, 20.26.01, 20.50.04, 20.50.05 Competitive Billing Workgroup Is addresssing 1. General requirements a. plain language i. Using terms generally understood by customer ii. No acronyms, technical words 2. Minimum requirements CC ACT - 7-505 B(5) (requires bills show charges for T&D, transition charge or credit, universal service program charges, customer charges, taxes and other charges identified by PSC) CC ACT - 7-507 F (requires identity and phone number of ESP, sufficient information to evaluate prices and services, and information identifying whether price is competitive or regulated) a. customer name b. mailing address c. service address d. account number(s) e. meter reading, if app f. date of meter reading, if app g. number and kind of units measured, if app h. next meter read date, if app i. applicable LDC rate sched j. notation of estimated bill k. iden/item of serv & charges l. price for itemized services i. Unit charge ii. Flat rate or charge iii. Variable charges iv. % savings/calc method CP-45 BILLING REQUIREMENTS (cont) ARGUMENT COUNTERARGUMENT m. any state/local surcharge n. total amount due o. payment due date p. late pay charge q. payment plan options r. supplier information i. Toll free number ii. Billing address iii. Customer service address s. LDC information i. Customer service number ii. Emergency number t. collection notices i. Past due amount ii. Other u. legal notices v. payment activity w. billing period x. PSC info and phone number y. "payment to" information B. Bill Format RELEVANT STATUTE OR RULE CC ACT - 7-507 F(1) CC ACT - 7-507 F(1) Competitive Billing Workgroup Is addressing 1. In consolidated bill, ESP & LDC components must be separate 2. Standard bill format C. Restrictions 1. No billing for nonenergy merchandise or services 2. No billing for third party 3. Single due date for consolidated bills 4. No negative option bill or negative enrollment for ESP or LDC services CC ACT - 7-507 G CP-46 BILLING REQUIREMENTS (cont) ARGUMENT COUNTERARGUMENT D. Required notices 1. New "supp bill" on first consolidated bill 2. PSC/state agency dispute process 3. Low income assistance CP-47 RELEVANT STATUTE OR RULE DISPUTE RESOLUTION ARGUMENT COUNTERARGUMENT A. PSC will have a dispute resolution procedure All agree with simple, expediCC ACT - 7-505 B(10)(ii)(3) tious dispute resolution process 7-507 E (7) requiring that customer begin by trying to resolve with ESP B. Individual Consumer Complaint RELEVANT STATUTE OR RULE Suppliers concerned about 1. Dispute defined as in confidential data COMAR as "a disagreement…regarding provision of…service, disputed bills, billing practices, or terminations of service." 2. Use existing PSC complaint process set out in COMAR for disputes with ESP COMAR should be streamlined into a separate process 3. ESP required to have internal dispute resolution process 4. Law change required to let PSC to order restitution Some believe there should be no change in law - courts alone order restitution CC ACT - 7-507 K C. Pattern & Practice Violations 1. PSC should have authority to Some see PSC as a triage investigate and hear violations of office for complaints which consumer protection laws or may be sent to AGCPD to refer to AG under a cooperative arrangement CC ACT - 7-507 O and Q (CC ACT does not affect authority of AG Consumer Protection Division) 2. If PSC or AGCPD found significant problems, after notice and hearing, various actions include: a. fines b. susp/revoc of license c. cease & desist orders d. restitution Private right of action not precluded CC ACT - 7-507 K Some think issues that could result in license suspension or revocation must be clearly defined & ESP given chance to cure violation Some think courts alone should have authority to order restitution CP-48 VIII. COLLECTION PRACTICES AND REQUIREMENTS ARGUMENT COUNTERARGUMENT RELEVANT STATUTE OR RULE CC ACT - 7-507 E(5) CC ACT - 7-512.1 G A. General Principles - Disconn at premises 1. LDC is responsible for disconnections 2. Disconnection only per PSC law and existing COMAR regulations 3. LDC can't disconnect for Some believe disconnection for nonpayment of ESP bill or any energy charges should be unregulated charges allowed 4. LDC buying ESP accounts receivable doesn't change disconnection restrictions CP-49 VIII. COLLECTION PRACTICES AND REQUIREMENTS (cont.) ARGUMENT COUNTERARGUMENT B. Priority of Payments (proposals in priority of payment section B reflect recommendation workgroup made to the Technical Implementation Workgroup, but some members disagreed with the recommendation) 1. When a customer makes only a partial payment on a consolidated bill (with both ESP and LDC charges), payment should be applied in the following order: 1. LDC arrearages 2. LDC current charges 3. ESP arrearages 4. ESP current charges 5. Other charges ESPs prefer to have ESP arrearages and current charges paid first 2. On a consolidated billing procedure, whether the biller should be required to purchase the nonbillers receivables should be left to each LDC/ESP contractual arrangement CP-50 RELEVANT STATUTE OR RULE SERVICE TERMINATIONS ARGUMENT COUNTERARGUMENT A. ESP terminates service 1. ESP must give written notice to customer a. minimum time period for TIWG recommends min. 47 days providing notice b. effect date of term must be next meter read date c. notice must specify reasons for termination d. notice must give consequences i. Selection of new ESP ii. Return to standard offer service B. Customer terminates service 1. Customer must give notice to ESP and LDC a. minimum time period for providing notice b. effect date of term must be next meter read date 2. Reasons for termination 3. Procedures for handling termination a. LDC confirms w/customer & informs customer of consequences i. Selection of new ESP ii. Return to standard offer service b. Customer selects new ESP or standard offer service C. If ESP withdraws w/o notice LDC must provide notice to customer Some concerned about LDC making disparaging statements about ESP Some think should be a time period for customer to find new ESP without having to stay with Standard offer service for minimum time CP-51 RELEVANT STATUTE OR RULE