Download 8738--Final Report--Consumer Protection

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).
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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.
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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.
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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
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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
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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.
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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.
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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.
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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
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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.
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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
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(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
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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-
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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
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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.
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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)).
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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.
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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.
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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
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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
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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
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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").
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(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