Download IV. Conclusion and orders - National Energy Marketers Association

STATE OF CONNECTICUT
DEPARTMENT OF PUBLIC UTILITY CONTROL
TEN FRANKLIN SQUARE
NEW BRITAIN, CT 06051
DOCKET NO. 10-06-24
DPUC REVIEW OF THE CURRENT STATUS OF THE
COMPETITIVE SUPPLIER AND AGGREGATOR MARKET
IN CONNECTICUT AND MARKETING PRACTICES AND
CONDUCT OF PARTICIPANTS IN THAT MARKET
March 16, 2011
By the following Commissioners:
Anna M. Ficeto
Kevin M. DelGobbo
John W. Betkoski, III
DECISION
DECISION
I.
INTRODUCTION ...................................................................................................... 1
A. SUMMARY ............................................................................................................ 1
B. ABBREVIATIONS ................................................................................................... 2
C. CONDUCT OF PROCEEDING.................................................................................... 3
D. PARTICIPANTS TO THE PROCEEDING ...................................................................... 3
II. DEPARTMENT ANALYSIS ...................................................................................... 5
A. SUPPLIER-AGGREGATOR RELATIONSHIP ................................................................ 5
B. MARKETING/SALES PRACTICES FOR SUPPLIERS/AGGREGATORS ............................. 8
C. REFERRAL PROGRAM ........................................................................................... 9
1. History of the Referral Program................................................................ 9
2. Other Information Regarding Choosing an Electric Supplier .............. 10
3. CTEnergyInfo.com – Rate Board ............................................................ 11
4. Position of CL&P ...................................................................................... 12
5. Position of UI ............................................................................................ 13
6. Position of OCC ....................................................................................... 13
7. Position of RESA ..................................................................................... 13
8. Position of Dominion ............................................................................... 13
9. Position of NEM ....................................................................................... 13
10. Department Analysis ............................................................................... 14
D. MODIFYING THE RATE BOARD ............................................................................. 16
1. Position of OCC ....................................................................................... 16
2. Position of CL&P ...................................................................................... 16
3. Position of UI ............................................................................................ 16
4. Position of Dominion ............................................................................... 17
5. Position of MXenergy .............................................................................. 18
6. Position of RESA ..................................................................................... 18
7. Position of NEM ....................................................................................... 19
8. Department Analysis ............................................................................... 19
a. Rate Board – Current Appearance and Filing Standards ............... 19
b. Rate Board – Defining Supplier Offers ............................................ 20
c. Sorting Supplier Offers ..................................................................... 21
d. Duration of Offers .............................................................................. 21
e. Requiring Participation on the Rate Board ..................................... 22
f. Revised Standards ............................................................................ 23
E. DISCLOSURE LABEL REQUIREMENTS ................................................................... 23
F. THREE-WAY CALL CENTER INQUIRIES ................................................................. 24
G. DIRECT BILLING BY ELECTRIC SUPPLIERS............................................................ 26
1. Legal Standards ....................................................................................... 26
2. Position of CL&P ...................................................................................... 27
3. Position of UI ............................................................................................ 27
4. Position of RESA ..................................................................................... 27
5. Position of Dominion ............................................................................... 28
6. Position of MXenergy .............................................................................. 29
7. Department Analysis ............................................................................... 29
H. WORKING GROUP ............................................................................................... 30
1. Position of MXenergy .............................................................................. 30
Docket No. 10-06-24
I.
Page 2
2. Position of UI ............................................................................................ 30
3. Department Analysis ............................................................................... 30
MID-CYCLE PRICE CHANGE AND ENROLLMENT ..................................................... 31
1. Position of RESA ..................................................................................... 31
2. Position of UI ............................................................................................ 31
3. Position of CL&P ...................................................................................... 32
4. Department Analysis ............................................................................... 32
a. Mid-Cycle Price Change .................................................................... 32
b. Mid-Cycle Enrollment ........................................................................ 33
c. Conclusion ......................................................................................... 34
III. FINDINGS OF FACT .............................................................................................. 35
IV. CONCLUSION AND ORDERS ............................................................................... 36
A. CONCLUSION ...................................................................................................... 36
B. ORDERS............................................................................................................. 37
I.
INTRODUCTION
A.
SUMMARY
In this Decision, the Department addresses various issues pertaining to Suppliers
and Aggregators, with the goal of continuing to promote and foster a vigorous and
competitive energy market in Connecticut. Specifically, the Department institutes
“Guidelines for Marketing and Sales Practices for Electric Suppliers and Aggregators” to
provide additional guidance to market participants, and improved safeguards for
consumers.
The Guidelines clarify rules on prohibited conduct such as the
unauthorized transfer of customer accounts, deceptive sales and marketing practices,
as well as detailing requirements for customer sales transactions such as a written
contract or receipt.
The Department also affirms its rulings in previous decisions prohibiting agency
relationships or arrangements between a Supplier and an Aggregator. Additionally, the
Department holds that Aggregators are not authorized to enter into Power of Attorney
agreements with customers, and Suppliers shall not recognize such agreements when
enrolling customers. Although the Department will lift the temporary suspension of the
Aggregator application process, and will resume accepting and reviewing applications
for Aggregator registrations, the Department will set a high standard for such
applications, and will register only entities that commit to adhere to, and operate in
accordance with, the language and intent of the law as Aggregators in Connecticut.
The Department also examines the Supplier Referral Program and finds that the
Program has achieved the Legislature’s goal of educating customers about the Supplier
market, and that the continued operation of the Program may confuse customers. As a
result, the Department concludes that it will, during this current legislative session, ask
the Legislature for guidance relative to the future of the Program.
Additionally, the Department discusses the CTEnergyInfo.com Rate Board and
the requirement that all Suppliers offering generally available rates to residential and
business customers must submit their prices for posting on the Rate Board, and
addresses the EDCs’ concerns regarding possible disclosure of customer personal
account information during three-way call center inquiries.
The Department allows Suppliers, at their discretion, to direct bill any of their
customers, but prohibits the EDCs from requiring Suppliers to offer direct billing. Rather
than implementing a fee for having the EDCs bill on behalf of Suppliers, the Department
establishes a Working Group to examine this issue and other issues.
Finally, in finding that the EDCs are able to accommodate Mid-Cycle generation
price adjustments through the issuance of prorated bills, the Department will work to
implement Mid-Cycle price changes. In addition, the Department will more fully explore
the steps necessary to accelerate the enrollment process. The Department will address
these issues through the Working Group that is being established through this
proceeding.
Docket No. 10-06-24
B.
Page 2
ABBREVIATIONS
(Aggregator) Registered Electric Aggregator;
(CL&P) The Connecticut Light and Power Company;
(Department) The Department of Public Utility Control;
(Dominion) Dominion Retail, Inc.;
(EBT) Electronic Business Transaction;
(EDC) Electric Distribution Company;
(ESID) Electric Supplier Information Database;
(GIS) Generation Information System;
(Guidelines) Guidelines for Marketing and Sales Practices;
(IT) Information Technology;
(IVR) Interactive Voice Response;
(Label) Disclosure Label;
(MX) MXenergy;
(NEM) National Energy Marketers Association;
(OCC) The Office of Consumer Counsel;
(RESA) The Retail Energy Supply Association;
(RPS) Renewable Portfolio Standard;
(Supplier) Licensed Electric Supplier; and,
(UI) The United Illuminating Company.
(2006 Pilot Referral Decision) Decision dated May 10, 2006, in Docket No. 05-08-05,
DPUC Investigation into the Process by Which Customers Can Choose an Electric
Supplier When Initiating Electric Service;
(2007 Review of Pilot Program)
Decision dated April 25, 2007, in Docket
No. 05-08-05RE01, DPUC Investigation into the Process by Which Customers Can
Choose an Electric Supplier When Initiating Electric Service – Review of Pilot Program;
(2007 Amended Referral Program) Decision dated October 10, 2007, in Docket No. 0508-05RE02, DPUC Investigation Into the Process by Which Customers Can Choose an
Electric Supplier When Initiating Electric Service – Amended Referral Program;
(Marketing Decision) Decision dated January 16, 2008, in Docket No. 07-06-60, DPUC
Review of the Statewide Energy Efficiency and Outreach Marketing Campaign;
(2008 Disclosure Label/Direct Billing Decision) Decision dated February 27, 2008, in
Docket No. 07-05-33, DPUC Administration of Disclosure Label Requirements and
Examination of Direct Billing by Electric Suppliers,
(2009 Levco Decision) Decision dated May 18, 2009, in Docket No. 99-09-21RE01,
Application of Levco Tech, Inc. for an Electric Aggregator License; and
(2010 Northgate Decision) Decision dated August 4, 2010, in Docket No. 10-01-04,
Application of Northgate Technologies, Inc. for a Certificate of Registration as an
Electric Aggregator.
Docket No. 10-06-24
C.
Page 3
CONDUCT OF PROCEEDING
Pursuant to C.G.S. §16-245u (a) and (b), and on its own motion, the Department
established this docket to review the current sales and marketing practices and conduct
as well as other business activities of all Suppliers and Aggregators doing business in
Connecticut.
By Interim Decision dated August 11, 2010, the Department ordered a temporary
suspension of accepting applications for certificates of registration to operate as
Aggregators pursuant to C.G.S. §16-245(l). This was done to ensure that all electric
aggregation activities were consistent with the state statutes and legislative intent.
By Notice of Request for Written Comments dated September 3, 2010, the
Department invited all Participants to submit comment on issues regarding the
relationships between Suppliers and customers, Suppliers and Aggregators, third
parties who provide marketing and sales support to licensed Suppliers, and Suppliers
and the Department, including, but not limited to, the following: the Department’s
Proposed Guidelines for Marketing and Sales Practices for Electric Suppliers and
Aggregators; the Department’s holdings in the 2009 Levco Decision and the 2010
Northgate Decision; the Rate Board; the Referral Program; and, the “Information for
Electric Suppliers and Aggregators” found on the Department’s web site.
On September 22, 2010, the Department held a public hearing on this matter at
the Department’s offices located at 10 Franklin Square, New Britain, Connecticut
06051.
D.
PARTICIPANTS TO THE PROCEEDING
The Department recognized the following as Participants to the proceeding:
ABCD Electric, 1070 Park Ave., Bridgeport, CT 06604; Acclaim Energy, Ltd., 1221
Lamar Street, Suite 510, Houston, TX 77010; The Office of Attorney General, 10
Franklin Square, New Britain, CT 06051; Allstar Energy Partners, LLC, 31 Ellsworth
Lane, Canton, CT 06019; Axsess Energy Group, LLC, P.O. Box 535, Northborough, MA
01532; Baystate Consultants, LLC, 30 Porter Rd., Boxford, MA 01921; Better Cost
Control, LLC, 2274 Washington St., Newton, MA 02462; CBIA Service Corp., Inc. 350
Church Street, Hartford, CT 06103; Chamber Energy Coalition, Inc., 125 Meadow Rd.,
Long Meadow, MA 01106; Cianbro Corp., 40 East Dudley Town Road, Bloomfield, CT
06002; Cianbro Energy, LLC, 101 Cianbro Square, Pittsfield, ME 04967; Clean Energy
Power, LLC, 800 Village Walk, Suite 159, Guilford, CT 06437; Coleman/Hines, Inc.,
20830 No. Tatum Blvd., Suite 330, Phoenix, AZ 85050; Collective Energy, LLC, P.O.
Box 1154, Madison, CT 06443; Community Energy, Inc., 201 King of Prussia Road,
Suite 550, Radnor, PA, 19087; Community Energy, Inc., P.O. Box 9710, New Haven,
CT 06536; Competitive Energy Services, LLC, 148 Middle Street, Portland, ME 04101;
Consolidated Edison Solutions, Inc., 100 Summit Lake Drive, Suite 410, Valhalla, NY
10595; Constellation Energy Resources, LLC, 100 Constellation Way, Suite 500C,
Baltimore, MD 21202; Constellation New Energy, 810 7th Ave., Suite 400, New York, NY
10019; Robinson & Cole, 280 Trumbull Street, Hartford, CT 06103-3597; Consumer
Energy Solutions, Inc., P.O. Box 2454, Clearwater, FL 33757-2454; Connecticut
Resources Recovery Authority, 100 Constitution Plaza, Hartford, CT 06103-7722; DBS
Docket No. 10-06-24
Page 4
Energy, Inc., 600 Four Rod Road, Building No. 2, Berlin, CT 06037; DeCott Energy
Management, LLC, 5001 Bissonet, Suite 22, Bellaire, Texas 77401; Direct Energy
Business f/n/a Strategic Energy, Liberty Center, 1001 Liberty Avenue, Pittsburgh, PA
15222; Direct Energy Services, 162 Cypress Street, Brookline, MA 02445; Direct
Energy Services, LLC, 12 Greenway Plaza, Suite 600, Houston, TX 77046; Discount
Power, Inc., 3356 East Main Street, Waterbury, CT 06705; Dominion Retail, Inc., P.O.
Box 26532, Richmond, VA 23219; Energy Choice, LLC, 1 Linden Place, Suite 108,
Hartford, CT; Energy East Solutions, Inc., 50 Methodist Hill Drive, Suite 1500,
Rochester, NY 14623; Energy New England, LLC, 100 Foxborough Blvd., Suite 110,
Foxborough, MA 02035; Energy Plus Holdings, LLC, 3711 Market Street, Suite 1000,
Philadelphia, PA 19104, EnerNoc, Inc., Two Stamford Landing, 68 Southfield Ave.,
Suite 215 Stamford, CT 06902; EnerNoc, Inc., 75 Federal Street, Suite 300, Boston, MA
02110; First Choice Energy, LLC, 204 Opening Hill Road, Branford, CT 06405; GDF
SUEZ Energy Resources, 1990 Post Oak Blvd., Suite 1900, Houston, TX 77056; GE
Global Trade Management – Energy, Inc., 105 Carnegie Center Blvd., Princeton, NJ
08540; NextEra Energy Services Connecticut, LLC, 20 Greenway Plaza, Suite 600,
Houston, TX 77046; Glacial Energy Of New England, 5060 Forts Straede, Charlotte
Amalie, St. Thomas, VI 00802; Global Montello Group Corp., 800 South Street, Suite
200, Waltham, MA 02454; Green Power Management, LLC, 11 Huckins Drive,
Newmarket, NH 03857; Halifax American Operating Co. / South Jersey Energy, Co., 1
South Jersey Plaza, Folsom, NJ 08037; Hess Corporation, One Hess Plaza,
Woodbridge, NJ 07095; Horizon Power & Light, LLC, 800 Bering Drive, Suite 250,
Houston, TX 77057; Howell Consulting, LLC, 494 Fern Street, West Hartford, CT
06107; International Skating Center of CT, LLC, 1375 Hopemeadow Street, Simsbury,
CT 06070; Integrys Energy Services, Inc., 500 West Madison Street, Suite 3300,
Chicago, IL 60661; Integrys Energy Services, Inc., 549 Bluehaw Drive, Georgetown, TX
78628; Liberty Power Delaware, 1901 W. Cypress Creek Rd., Suite 600, Fort
Lauderdale, FL 33309; LPB Energy Consulting, 12700 Park Central Drive, Suite 200,
Dallas, TX 75251; Manufacturing Alliance of CT, Inc.,173 Interstate Lane, Waterbury,
CT 06705; Metromedia Power, Inc., 2000 West Park Drive, Westborough, MA 01581;
MXenergy, 711 Louisiana Street, Suite 1000, Houston, TX 77002; MXenergy Inc.,
10010 Junction Drive, Suite 104-S, Annapolis Junction, MD 20701; MXenergy Inc., 595
Summer Street, Suite 300, Stamford, CT 06901; North American Power and Gas, LLC,
11 North Main Street, South Norwalk, CT 06854; Northeast Energy Management
Company, P.O. Box 42655, Washington, D.C. 20015-0655; Northeast Energy Partners,
LLC, 174 South Rd., Enfield, CT 06082; Northeast Utilities Service Company, P.O. Box
270, Hartford, CT 06141-0270; OCC, 10 Franklin Square, New Britain, CT 06051;
Paragon Advisors, LLC; P.O. Box 332, Madison, CT 06443; Pareto Energy, Ltd., 1101
30th Street, NW Suite 500, Washington, DC 20007; Patriot Energy Management, Inc. /
Patriot Energy Group 10 Tower Office Park, Suite 315, Woburn, MA 01801; Pepco
Energy Services, Inc., 1300 North 17th Street, Suite 1600, Arlington, VA 22209; PES
Brokers, Inc. 1305 FM 359 Rd. STE J, Richmond, TX 77406; Positive Energy Electricity
Supply, LLC, 765 Straits Tpk., Suite 2003, Middlebury, CT 06762; Power Solutions
Group, Inc., 66 Main Street, Putnam, CT 06260; PowerChoice, LLC, 208 Forest Drive,
Wethersfield, CT 06109; Rapid Power Management, L.P., 19111 North Dallas Parkway,
Suite 125, Dallas, TX 75287; ResCom Energy, LLC; 20 East Ave., Bridgeport, CT
06610; Murtha Cullina, LLP, City Place I, 185 Asylum Street, 29 th floor, Hartford, CT
06103-3469; Risk Services Group, Inc., 364 Boston Tpke., Suite 1B, Shrewsbury, MA
01545; RJT Energy Consultants, LLC, 110 Washington Avenue, 4 th Floor, North Haven,
Docket No. 10-06-24
Page 5
CT 06473; Royal Bank of Scotland, 401 West 8 th Street, Suite 500, San Diego, CA
92101; Royal Bank of Scotland, 600 Steamboat Rd., Greenwich, CT 06830; Sack
Distributors Corp., 34 Francis Ave., Hartford, CT 06106; Santa Buckley Energy, P.O.
Box 1141, Bridgeport, CT 06601; Secure Energy Solutions, LLC, 12-14 Somers Rd.,
East Longmeadow, MA 01028; Sempra Energy Solutions, LLC, 401 West A St., Suite
500, San Diego, CA 92101; Sovereign Energy, LLC, 31 Birch Road, West Hartford, CT
06119; Sprague Energy Corp., Two International Drive, Suite 200, Portsmouth, NH
03801; Standard Oil of CT, Inc., 299 Bishop Ave., Bridgeport, CT 06610; Stanwich
Energy Advisors, LLC, 777 West Putnam Avenue, Greenwich, CT 06830; Starion
Energy, Inc., 220 Main Street South, Southbury, CT 06488; Taylor Consulting &
Contracting, LLC, 625 Main Street, Avoca, PA 18641; Titan Energy New England, Inc.,
2317 Silas Deane Highway, Rocky Hill, CT 06027; Tradition Energy, 680 Washington
Blvd., 5th Floor, Stamford, CT 06901; TransCanada Power Marketing, Ltd., 110
Turnpike Rd., Suite 203, Westborough, MA 01581; Turris Associates, LLC, 2 Meadows
Edge, Redding, CT 06896; The United Illuminating Company, P.O. Box 1564, New
Haven, CT 06506-0901; United Energy Partners, LLC, 62 Randall Avenue, Bridgeport,
CT 06606; Usource, LLC, 325 West Rd., Portsmouth, NH 03801; Utility Analysts, LLC,
24 Country Lane, Canton, CT 06019; Utility Exchange, LLC, 54 Annawon Ave., West
Haven, CT 06516; Verde Energy USA, Inc., 101 Merritt Seven Corporate Park, Norwalk,
CT 06851; Viridian Energy, Inc., 152 West 57th Street, 4th Floor, New York, NY 10019;
Whole Foods Market, North Atlantic Region, 125 Cambridgepark Drive, Cambridge, MA
02138; and, World Energy Solutions, Inc., 446 Main Street, 14th Floor, Worcester, MA
01608.
II.
DEPARTMENT ANALYSIS
A.
SUPPLIER-AGGREGATOR RELATIONSHIP
Under Connecticut law, an “Aggregator” is defined as any person that gathers
together electric customers for the purpose of negotiating the purchase of electric
generation services from a Supplier, provided (1) such person is not engaged in the
purchase or resale of electric generation services, and (2) such customers contract for
electric generation services directly with a Supplier. C.G.S. §16-1(a)(31).1 Aggregators
are required to obtain a certificate of registration from the Department before they may
negotiate a contract for the purchase of electric generation services from a Supplier.2
C.G.S. §16-245(l)(2).
1
C.G.S. §16-1(a)(31) provides:
“Electric aggregator means (A) a person, municipality or regional water authority that gathers together
electric customers for the purpose of negotiating the purchase of electric generation services from an
electric Supplier, or (B) the Connecticut Resources Recovery Authority, if it gathers together electric
customers for the purpose of negotiating the purchase of electric generation services from an electric
Supplier, provided such person, municipality or authority is not engaged in the purchase or resale of
electric generation services, and provided further such customers contract for electric generation services
directly with an electric Supplier, and may include an electric cooperative established pursuant to chapter
597.”
2 Prior to 2003, Electric Aggregators were required to be licensed. Public Act 03-135, An Act Concerning
Revisions to the Electric Restructuring Legislation, amended C.G.S. §16-245 to change “license” to
“certificate of registration” as well as changing the application requirements and the Department’s review
standards.
Docket No. 10-06-24
Page 6
Since the start of electric deregulation in 1998, the Department has issued
certificates of registration to approximately 70 Aggregators. In 2008, the Department
became aware that a number of Aggregators were marketing on behalf of Suppliers
instead of negotiating the purchase of electric generation services from Suppliers on
behalf of customers. Since that time, the Department has pronounced and reiterated its
position that Aggregators must act as the customers’ agents in negotiating electric
generation prices for the gathered customers, and that the law precluded Aggregators
from acting as agents for Suppliers. Specifically, in the 2009 Levco Decision, the
Department revoked Levco Tech, Inc.’s Aggregator registration, and in the 2010
Northgate Decision, the Department denied Northgate Technologies, Inc.’s application
for an Aggregator certificate of registration, as discussed herein.
The Levco Decision specifically held:
…As evident by the express language of [C.G.S. §16-1(a)(31)], electric
Aggregators must negotiate prices of electric generation services with the
Electric Suppliers on the customers’ behalf. Thus, Electric Aggregators
must act as the customers’ agents. As customers’ agents, Aggregators
may not simultaneously be agents or representatives for Electric
Suppliers. 2009 LEVCO Decision, p. 3.
The Department held that Suppliers were not permitted to use Aggregators to
represent them or market on their behalf on any matters, and similarly, Aggregators
were not permitted to market or represent any Suppliers in any capacity. 2009 Levco
Decision, p. 3. In the Levco case, the Department found that Levco had entered into an
agency agreement with Dominion Retail, Inc. (Dominion), a licensed Supplier, whereby
Levco was “Dominion’s exclusive electricity marketing agent in Connecticut.” Id. at 2.
The Department revoked Levco’s Aggregator certificate of registration, finding that
Levco’s business relationship with Dominion (a) was “contrary to the language and
intent of the electric restructuring laws” and (b) might have conflicted with the business
relationship with Levco’s own customers.
Subsequently, in 2010 the Department denied Northgate’s application for an
Aggregator certificate of registration based on a finding that Northgate had an existing
agency agreement with a Supplier. In that agency agreement, Northgate was
responsible for providing the following services for, and on behalf of, a Supplier: (1)
collecting customer information such as billing data, credit information, IDR data and
consumption data; (2) coordinating and arranging for execution of contracts between
the Supplier and the customers, and maintaining copies of all such contracts; and (3)
providing customer support and resolving customer disputes and issues arising from the
electric generation services provided by the Supplier to the customers. Additionally,
Northgate described itself as being a “marketer” for Suppliers and received an “agent
fee” from the Supplier for services performed pursuant to the agency agreement. All
correspondence from Northgate to consumers bore only the Supplier’s name and logo,
and neither Northgate’s name nor references to Northgate’s aggregation services could
be found in any sample literature or sample notices contained in its Aggregator
application. The Department denied Northgate’s application concluding that the record
in that proceeding showed Northgate’s complete lack of understanding of the role of an
Aggregator.
Docket No. 10-06-24
Page 7
The Department again affirms its rulings in the Levco and Northgate Decisions.
The Department holds that pursuant to the express language of C.G.S. §16-1(a)(31)
and intent of the electric restructuring laws, Aggregators are the customers’ agents.
Aggregators’ loyalty must lie with the customers, and as such, Aggregators may not
represent or act as agents or representatives for any Suppliers at any time, or in any
capacity. As required by statute, Aggregators must represent customers in negotiating
the best electric generation price for those customers. Similarly, Suppliers are not
permitted to employ Aggregators to (a) represent them, (b) market on their behalf on
any matter, or (c) provide any customer service-related functions on their behalf. As
stated in the Northgate Decision, the Department will not sanction any type of SupplierAggregator agency relationship that (a) continues to operate contrary to these findings;
(b) enters into an agency agreement with any Supplier(s); (c) has any types of business
relationship or arrangement with a Supplier; or (d) whose aggregation activities are
inconsistent with the language or intent of C.G.S. §§16-1(a)(31) and 16-245(l).
Effective the date of this Decision, the Department will lift the temporary
suspension that was imposed through the Interim Decision dated August 11, 2010, and
will accept and review applications for Aggregator certificates of registration. Only
entities who adhere to, and operate in accordance with, the language of C.G.S.
§§16-1(a)(31) and 16-245(l) will be granted a certificate of registration to operate as an
Aggregator in Connecticut.
The Department is aware that many Aggregators currently have business
relationships or arrangements with Suppliers that would not be consistent with the
Department’s rulings in the Levco, Northgate and this Decision. The Department will
require every licensed Supplier and registered Aggregator to provide, no later than 30
days after the date of this Decision, either (1) an affidavit attesting that the Supplier or
Aggregator does not currently have an agency relationship with an Aggregator or
Supplier that would be inconsistent with the Department’s rulings in this Decision; or (2)
a listing of all Aggregators or Suppliers with whom such Supplier or Aggregator currently
has an agency relationship or arrangement, and a description of such relationship (e.g.,
sales, marketing, customer service). Any Aggregator who wishes to retain an existing
agency relationship with a Supplier should immediately surrender its Aggregator
registration by notifying the Department in writing. For any Supplier or Aggregator who
fails to respond within 30 days as directed herein, the Department will take appropriate
action, including initiating revocation proceedings or issuing a civil penalty as authorized
by C.G.S. §16-41. The Department will revoke the registration certificates of any
Aggregator who (a) continues to operate contrary to these rulings; or (b) enters into an
agency agreement with any Supplier; or (c) has any types of business relationship or
arrangement with a Supplier; or (d) whose aggregation services are inconsistent with
the language or intent of C.G.S. §16-1(a)(31) and 16-245(l).
In its Written Exceptions, MX Energy (MX) requested that the Department hold
that any Aggregator who has a Power of Attorney relationship with its customers would
be authorized to act on such customers’ behalf in dealing with a Supplier, including
entering into a contractual agreement with a Supplier or representing the customers in
any “enrollment dispute” with a Supplier.
MX Written Exceptions, pp. 10-13.
Specifically, MX requests a ruling that any enrollments an Aggregator makes with a
Supplier on behalf of a customer pursuant to an aggregator-customer power of attorney
Docket No. 10-06-24
Page 8
agreement would NOT be deemed “unauthorized enrollment.” Id. at 13. The
Department declines to issue such a ruling. The aggregator-customer power of attorney
relationship is exactly what the laws sought to prevent. The definition of “electric
aggregator,” as provided under C.G.S. §16-1(a)(31), expressly and specifically requires
that aggregated customers “contract for electric generation services directly with an
electric supplier.” (Emphasis added.) As the Department has discussed many times in
the past, the law contemplates that Aggregators aggregate customers’ individual electric
loads or consumption to negotiate for better prices with Suppliers; however, once terms
and prices have been negotiated, Aggregators must step out of the process and the
Suppliers and Customers must, directly and individually, enter into their own contractual
relationship. The law does not allow for Aggregators to be agents or brokers between
Suppliers and customers. As such, the Department hereby holds that Aggregators are
not authorized to enter into Power of Attorney agreements with customers, and
Aggregators are not allowed to enroll with any Suppliers on any customers’ behalf. Any
Aggregators who currently have Power of Attorney agreements with customers shall, no
later than 30 days after the date of this Decision, terminate such agreements and issue
written notices to the customers to that effect or relinquish their Aggregator certificates
of registration. Any Suppliers who enroll customers through Aggregators, instead of
contracting directly with the customers, shall be deemed to have “slammed” such
customers and shall be subject to civil penalties pursuant to C.G.S. §16-41 or
revocation or suspension of license. The Department notes that the law does not
prohibit customer representation by brokers, marketers or other types of agency. Thus,
Power of Attorney agreements between customers and brokers or marketers would be
authorized and accepted, subject to relevant consumer protection laws.
B.
MARKETING/SALES PRACTICES FOR SUPPLIERS/AGGREGATORS
Since 1998, the Department has licensed approximately 50 Suppliers and
registered approximately 70 Aggregators. Approximately 600,000 customers are
currently served by Suppliers. Over the past decade, the Department has gained
experience with the competitive energy market, and as that market has evolved, so has
the need guidelines to govern Suppliers’ and Aggregators’ sales and marketing
practices to provide better guidance to market participants, while concurrently providing
improved safeguards for consumers.
The Department hereby adopts the Guidelines for Marketing and Sales Practices
(Guidelines), appended to this decision as Appendix A. The Guidelines cover a wide
range of topics and prescribe prohibited and required practices for sales and marketing
of electric generation and aggregation services. The Department is mindful that the
Legislature may wish to consider a Code of Conduct for Suppliers and Aggregators
during the 2011 Legislative Session. Therefore, during the pendency of the 2011
Legislative Session, the Department strongly urges all Suppliers and Aggregators to
voluntarily comply with the intent and sprit of the Guidelines. At the conclusion of the
2011 session, the Department will promulgate regulations, if necessary, to adopt these
Guidelines as modified or revised to conform with any laws enacted by the General
Assembly.
The Guidelines are detailed, and as such, there is no need to explain them
individually. The Department will highlight those Guidelines on the unauthorized
Docket No. 10-06-24
Page 9
transfer of customer accounts (i.e., slamming) (Section II(d)), deceptive sales and
marketing practices (Section IV), and the requirements for written contracts or service
enrollment receipts (Section III(b)).
The Guidelines are intended to facilitate the effective operation of a vigorous,
dynamic, yet fair, competitive residential energy market, to the benefit of consumers,
Suppliers, Aggregators and EDCs alike. A competitive energy market can provide a
positive experience for all consumers. Suppliers and Aggregators are expected to
conduct themselves with these expectations in mind so that their sales and marketing
activities do not call into question the fairness and integrity of the competitive market.
Anything that damages the reputation of the competitive market harms not only
consumers, but all Suppliers and Aggregators participating in the market.
Suppliers and Aggregators are put on notice that they are responsible for the
actions of their agents, and that the Department expects each Supplier and Aggregator
to actively monitor the conduct and activities of all entities authorized to market, sell or
support such Supplier or Aggregator. When developing internal agent discipline
policies, all Suppliers and Aggregators should be aware of the Department’s long
standing “zero tolerance” policy concerning “slamming” and related customer enrollment
issues. The Department has penalized companies that engage in inappropriate
practices to emphasize that such practices will not be tolerated. See Docket No. 09-1112, Department of Public Utility Control Investigation Into Clearview Electric, Inc. (the
Department imposed a civil penalty of $27,500 for failure to comply with, inter alia, the
verification methods prescribed by C.G.S. §16-245o(e) for at least 12 customers).
C.
REFERRAL PROGRAM
1.
History of the Referral Program
Section 33 of Public Act 05-01, June Special Session, (P.A. 05-01)3 An Act
Concerning Energy Independence, required the Department to conduct a proceeding to
determine whether a practical, effective, and cost-effective process exists under which
an electric customer, when initiating electric service, may receive information regarding
the selection of electric generating services from a qualified entity. The Department
was to investigate this matter and implement its resulting Decision on or before March
1, 2006, or later if determined appropriate. Pursuant to this directive, in the 2006 Pilot
Referral Decision, the Department required CL&P to implement a six-month pilot
program to inform its residential Rate 1 customers about retail pricing options available
from Electric Suppliers (2006 Pilot Referral Program). As noted in that Decision, the
2006 Pilot Referral Program had the potential to reach numerous customers because
each EDC has direct contact with 20% to 30% of their customers annually. 2006 Pilot
Referral Decision, pp. 11-17.
Upon review of the 2006 Pilot Referral Program, and pursuant to the 2007
Review of the Pilot Program Decision, the Department concluded that the 2006 Pilot
Referral Program was a cost-effective way to provide information to residential
customers relative to selecting generation services from a qualified Supplier. As a
3
Codified as C.G.S. §16-244c(b)(1)(b)
Docket No. 10-06-24
Page 10
result, the Department required that this program, now called the Referral Program, be
offered by CL&P and UI to its residential and business customers. See, Decision in
Docket No. 05-08-05RE01, pp. 6-11.
On June 4, 2007, the Legislature enacted Public Act 07-242, An Act Concerning
Electricity and Energy Efficiency. Section 924 of P.A. 07-242 required the Department
to revise the Referral Program. In response, and pursuant to the 2007 Amended
Referral Program Decision, the Department modified the Referral Program. The
program became known as the Amended Referral Program. The Amended Referral
Program Decision established the standards for Suppliers to participate in the program
as well as the standards for CL&P and UI to provide information about the program to
consumers. Amended Referral Program Decision, pp. 2-16.
In general, participation in the Amended Referral Program requires a Supplier to
offer customers a one-year fixed price for generation services and allow the customer to
cancel service at any time during that period without penalty (Qualifying Electric Offer).
The EDCs must offer customers who call into their respective call centers the option to
have these offers explained directly to them and to allow the customer to be directly
transferred to a participating Supplier. The EDCs have been authorized to use their
Interactive Voice Response (IVR) systems to fulfill the requirements of the Amended
Referral Program. While there are other rules that apply to participating Suppliers, the
foregoing summarizes the fundamental elements of the program. Amended Referral
Program Decision, pp. 13-16.
2.
Other Information Regarding Choosing an Electric Supplier
C.G.S. §16-244d(f) states:
The Department of Public Utility Control, in consultation with the Office of
Consumer Counsel, shall establish a program for the dissemination of
information regarding Electric Suppliers. Such program shall require
electric distribution companies to distribute an informational summary on
Electric Suppliers to any new customer and to existing customers
beginning on January 1, 2004, and semiannually thereafter. Such
informational summary shall be developed by the department and shall
include, but not be limited to, the name of each licensed Electric Supplier,
the state where the Supplier is based, information on whether the Supplier
has active offerings for either residential or commercial and industrial
consumers, the telephone number and Internet address of the Supplier,
and information as to whether the Supplier offers electric generation
services from renewable energy sources in excess of the portfolio
standards established pursuant to section 16-245a. The department
shall include pricing information in the informational summary to the
extent the department determines feasible. The department shall post
4
Codified as C.G.S. §16-244c(k)-(n)
Docket No. 10-06-24
Page 11
the informational summary in a conspicuous place on its website and
provide electronic links to the website of each Supplier. The department
shall update the informational summary on its website on at least a
quarterly basis. (Emphasis added).
Prior to 2007, the Department fulfilled the aforementioned directives by providing
a list of Suppliers and Aggregators on its web site and through the distribution of
semi-annual bill inserts to all CL&P and UI customers, listing the same information. At
that time, Suppliers were primarily targeting larger use customers and were generally
negotiating individually priced contracts. Because there was limited marketing to
residential and small business customers, there was no generally available price
information to provide to these customer classes. Therefore, information provided to
consumers was limited to a listing of Suppliers and their contact information.
3.
CTEnergyInfo.com – Rate Board
Section 87 of P.A. 07-2425 required the Department, in coordination with the
Energy Conservation Management Board (Energy Efficiency Board), to develop a plan
to conduct an energy efficiency and outreach marketing campaign (Marketing
Campaign). Pursuant to the Decision dated January 16, 2008, in Docket No. 07-06-60,
DPUC Review of the Statewide Energy Efficiency and Outreach Marketing Campaign
(Marketing Decision), the Department established the guidelines to address the
Section 87 directives, and to reach the goals of educating consumers about the option
of choosing a Supplier set forth in that section.
Among the requirements of the Marketing Campaign, the Department was
directed to create a web site to serve all customer classes. Section 87 also required
that a website be maintained and updated regularly and that it include, but not be limited
to, current rate and contact information for Suppliers that are participating in the
Amended Referral Program.
The Department used www.ctenergyinfo.com
(CTEnergyInfo) as the platform to fulfill the overall Section 87 web site directives and
developed a specific resource within the site to list Supplier offers and rates and other
Supplier-related information (Rate Board). The Rate Board was used to fulfill the
specific goals regarding the education of customers about choosing a Supplier. The
Department was required to implement the Marketing Campaign on or before March 1,
2008.
While the Marketing Decision addressed the development of the Marketing
Campaign and the web site, the proceeding did not establish specific filing requirements
for submitting Supplier price offers for posting to CTEnergyInfo. The Department
addressed these requirements in a separate proceeding, and pursuant to the 2008
Disclosure Label/Direct Billing Decision, established the current standards for submitting
the generation service prices that are posted to the Rate Board. 2008 Disclosure
Label/Direct Billing Decision, p. 10.
The first such filings were submitted in March 2008, at which time the Rate Board
was launched. In addition to fulfilling the directives of Section 87 concerning the
5
Codified as C.G.S. §16a-47a.
Docket No. 10-06-24
Page 12
Amended Referral Program, the Rate Board provides consumers a central location to
compare all Supplier price offers. Although initially limited to the few Suppliers that
were actively marketing in early 2008 and the limited number of price plans these
Suppliers submitted, the Rate Board has grown to include 12-15 Suppliers and a wide
range of pricing plans (i.e., variable, fixed, variable with caps, green offers, etc.). At
present there are about 35 offers for CL&P residential customers.
Implementation of the Rate Board coincided with an increase in the marketing
activity for residential and small business customers among then current Suppliers. The
Department also observed an increase in the number of active Suppliers and the price
plans being offered to these customer classes. As a result, in 2008 the Department
began directing web traffic to the Rate Board to provide consumers with more
information and, more importantly, Supplier prices for generation services. The
Department also modified the bill insert by replicating the price information that was
available on the Rate Board. The bill inserts are now distributed quarterly to all CL&P
and UI customers.
Since the start of the Amended Referral Program, there have generally been
three or four Qualifying Electric Offers available at any one time. At the same time, and
in addition to these offers, the Rate Board has generally contained 12 or more price
arrangements. There have always been a variety of offers, in addition to Qualifying
Electric Offers. The Department has never limited the price information that it provides
consumers to the Qualifying Electric Offers as this would confuse customers and unduly
limit information to the market by not providing all available price information. At
present there are about 35 price plans available to CL&P residential customers. It
would be inappropriate to isolate, or otherwise focus attention exclusively on, Qualifying
Electric Offers.
4.
Position of CL&P
CL&P states that the Amended Referral Program no longer provides valuable
information to customers. In addition, of the twenty-five (25) plus active Suppliers in
CL&P’s service territory, there have never been more than four (4) Suppliers
participating in the Amended Referral Program. The EDCs continue to incur costs
associated with the Amended Referral Program pertaining to the operation,
personnel/staffing, use of IVR technology and other factors necessary to maintain the
Amended Referral Program. For instance, a representative’s talk time increases
significantly when discussing the Amended Referral Program. A decade has passed
and there exists a robust competitive market. Suppliers who benefit from this market
should now fully take on the responsibilities and costs associated with educating
customers about retail Suppliers and the services they offer. CL&P believes that the
Supplier Amended Referral Program has served its useful purpose and should be
discontinued. CL&P believes that the efforts of the Department and Suppliers would be
better focused on providing accurate, timely and detailed information about Suppliers
and their competitive offerings on the Department’s website, rather than retooling the
Amended Referral Program. CL&P Written Comments, p. 5; CL&P Letter in Lieu of
Brief, p. 1.
Docket No. 10-06-24
5.
Page 13
Position of UI
UI states that the Amended Referral Program, established in the 2007 Amended
Referral Program Decision, requires minimal input from UI each month. Suppliers
provide their prices to UI in the five business day window prior to the start of the month
and UI makes changes to its IVR system and website for the first of the month. A
maximum of four Suppliers in any month have availed themselves of the program.
Currently, three Suppliers are participating. UI Written Comments, p. 2.
UI further requests that if the Amended Referral Program is maintained, each
Supplier be required to have a webpage link where its Amended Referral Program
prices are shown so that a customer can directly link to such Amended Referral
Program prices from the Company’s website as well as from the Rate Board. Id.
6.
Position of OCC
OCC states that it is aware that only three or four Suppliers are currently
participating in the Referral Program, and believes that the program has outlived its
usefulness. To the extent it is continued, OCC agrees with UI that the Department
should put in place a requirement that each Participating Supplier have a webpage link
where its Amended Referral Program prices are shown. OCC Brief, p. 5.
7.
Position of RESA
RESA states that the Amended Referral Program has helped bring many
consumers in touch with the retail market and informed them of their options. As a
result, RESA supports the continuation of this program. RESA Written Comments,
p. 13.
8.
Position of Dominion
Based on the language of C.G.S. §16-244c(k), Dominion believes that the EDCs
are required to continue to provide residential and small commercial customers with the
option to learn about their ability to enroll with a Supplier. Dominion believes that the
Amended Referral Program continues to provide “a practical, effective, and costeffective process . . . under which an electric customer . . . may receive information
regarding selecting electric generating services from a qualified entity.” Accordingly,
Dominion supports the continuation of the program. Dominion Written Comments,
p. 14; Dominion Brief, p. 17.
9.
Position of NEM
NEM believes it would be premature to end the Amended Referral Program
particularly in view of consumer interest and participation levels achieved to date and
yet to be achieved. To the extent that this program is portrayed as transitory, rather
than a reliable market feature, removing it will discourage the exact marketer investment
of resources that is required to ensure the on-going availability of energy choice options.
NEM believes it is too early to conclude that the Amended Referral Program has
outlived its usefulness. Rather, it claims the current level of customer migration would
Docket No. 10-06-24
Page 14
indicate just the opposite, that this program is precisely what is needed to incent
residential customer choice. NEM states that this program is a cost-effective tool to
overcome customer inertia and apprehension about trying energy choice. To the extent
utilities and marketers have incurred costs to provide this program, it would be wasteful
and inefficient to discontinue it so shortly after it has been put in place. NEM Written
Comments, p. 9.
10.
Department Analysis
In 2006, P.A. 05-01 required the Department to determine whether there was a
cost-effective way to provide information to customers about retail choice. As noted in
the 2006 Pilot Referral Decision, although retail choice began in 2000, and retail supply
offers for residential customers had been available for approximately five years; most
consumers were still receiving their generation service from CL&P and UI. 2006 Pilot
Referral Decision, p. 12. The Legislature thus directed the Department to take action to
address this matter.
The following table demonstrates the number of customers that have chosen a
Supplier since 2006. As Table 1 shows, in December 2006 (prior to any type of Referral
Program promotional activity) about 40,000, or about 2.6% of the approximately
1.5 million customers served by the EDCs had selected a Supplier. The number of
customers served by Suppliers has significantly increased since that time.
Table 1
Number of Residential and Small Business Customers Served By Electric Suppliers
The United Illuminating Company & The Connecticut Light & Power Company Combined
December 31, 2006
No. Cust.
United Illuminating
Connecticut Light & Power
Total Switched
% of EDC
Customers
0
39,670
39,670
2.6%
December 31, 2007
No. Cust.
27,657
63,653
91,310
% of EDC
Customers
6.1%
November 30, 2010
No. Cust.
135,542
431,014
566,556
% of EDC
Customers
37.8%
Source of data: Compliance filings Docket No. 06-10-22.
Notes:
Combined, UI and CL&P (i.e., EDCs) serve approximately 1.5 million customers and percentages are based on this value.
This table excludes Last Resort Service customers.
In the 2006 Pilot Referral Decision, the Department concluded that “the purpose
of providing consumers with pricing information is to increase awareness of the
competitive market. It is reasonable to conclude that the Legislature intended to provide
information to customers with the intention of stimulating participation (i.e., enrollment)
in the competitive market.” It is clear that in 2006, with fewer than 40,000 customers
having participated in the Supplier market, the Legislative intent surrounding the Pilot
Referral Program was to educate consumers about retail choice so as to better promote
this policy.
In mid-2007, under Sections 87 and 92 of P.A. 07-242, the Legislature again
targeted an educational effort designed to increase awareness of and participation in
Docket No. 10-06-24
Page 15
retail choice by requiring the Department to conduct a Marketing Campaign and by
directing modifications to the Referral Program. Table 1 above demonstrates that
participation in the Supplier market has dramatically improved over the past three years,
increasing from approximately 40,000 to nearly 570,000 during that time. The
Department concludes that the Amended Referral Program as well as other
market-related educational activity and general circumstances have combined to
increase participation in the retail electric market among residential and business
customers.
Since 2006, the Department has witnessed a significant increase in the number
and type of price plans offered by Suppliers. The Rate Board now includes variable rate
plans, short term (four-month, six-month, etc.) fixed prices, variable offers with a cap,
and one-year fixed price plans. During this time the Department has observed that
there are relatively few Qualifying Electric Offers and that it is difficult to explain to
consumers the difference between these offers and the other price plans that are
regularly posted to the Rate Board.
Qualifying Electric Offers require that the EDCs isolate and separately promote
these price plans through their web sites and IVR systems. While separately identifying
these offer provided valuable information to consumers in 2006 when there were few
price options, the continued use of this strategy confuses the market as customers are
likely to perceive a Qualifying Electric Offer as special, or different since it is separately
and directly promoted through the EDCs.
As noted in the 2006 Pilot Referral Decision, each EDC has direct contact with
20% to 30% of their customers annually. 2006 Pilot Referral Decision, p. 11. The
EDCs have been providing information about the Amended Referral Program to
customers that contact them since 2007. As a result, a significant portion of all EDC
customers have been provided information about this program. All customers receive
information about choosing a Supplier through quarterly bill inserts that display the
current range of price plans. The Department concludes that the few Suppliers that
continue to provide Qualifying Electric Offers are likely doing so to take advantage of
the marketing that the EDCs are required to provide under the program (i.e., the IVR
information, direct transfer to the participating Supplier and EDC web presence).
The market has evolved and now regularly includes short and long-term fixed
price offers. There is no reason to require that Suppliers offer one-year fixed price
plans. Based on the foregoing, the Department finds that the Amended Referral
Program has achieved the Legislature’s goal of educating customers about the
opportunity to choose a Supplier, fostering the growth of a competitive market. The
Department finds that the Amended Referral Program has outlived its usefulness, and
at this point, adds customer confusion and unnecessary operating expenses to the
EDCs. The Department will ask the Legislature for guidance on possible modification of
the statute to reflect the evolution of the marketplace.
Docket No. 10-06-24
D.
Page 16
MODIFYING THE RATE BOARD
1.
Position of OCC
OCC believes that the Rate Board is a helpful tool for consumers. OCC
suggests that all Suppliers that are licensed to serve residential and small business
customers be required to file their information on the Rate Board as a condition of their
license, and to update such information as listed offers change. OCC is aware that
Department staff spends considerable time updating and enhancing this tool, which also
provides marketing benefits to the Suppliers. OCC believes that the Suppliers should
be charged an annual fee, or otherwise contribute to the upkeep of the Rate Board.
OCC Written Comments, p. 3.
OCC further states that it would be valuable to add an information banner or box
to be prominently displayed at the top of the page with definitions and other important
information, including CL&P’s suggestion to include customer rights if they dispute a
Supplier’s contractual term or have a dispute with a Supplier regarding an enrollment.
Also, the Department should add additional sorting to allow customers to organize
Supplier offers by fixed or variable rates. Regarding value added offers, OCC believes
that any offer that includes ancillary benefits such as airline miles should be required to
post their rates to CTEnergyInfo and to state the rate and summarize extra incentives or
provide a quick link to such incentives. OCC recommends that the Department
consider establishing rules to ensure that anyone who misrepresents rates or other
information on the Rate Board is subject to penalty. OCC Brief, p. 4
2.
Position of CL&P
CL&P states that the numbers of Suppliers in the marketplace have dramatically
increased since the Department first undertook to establish the filing requirements for
Supplier offers under Docket No. 07-05-33. CL&P notes that the Department’s original
standards have not changed since that time. Since market activity has increased,
CL&P urges the Department to establish regulations governing the posting of rates and
other pricing and contractual details helpful to residential customers in evaluating an
offer by a Supplier. CL&P recommends that suppliers be required to post prices and
offerings in a consistent and easily understandable format, so that residential customers
can make clear comparisons of Supplier offerings on an “apples-to-apples” basis.
According to CL&P, such offerings should be posted in a manner that is simplistic and
clear enough for all residential customers to easily navigate and make informed
decisions about Suppliers and whether their offerings are best suited for the customer’s
energy usage. CL&P Written Comments, p. 4
3.
Position of UI
UI states that expanded language that accurately describes competitive
generation rates is necessary to assist consumers in their understanding of the
Connecticut energy market. Like UI’s rates, which have specific effective and
termination dates listed on each tariff, customers should be able to determine the prices
they would pay for each competitive offer on specific dates. This provides an easy way
for customers to understand the pricing offers without the confusion associated with
Docket No. 10-06-24
Page 17
characterizing them as monthly fixed, monthly variable, etc. UI believes that the
concerns and confusion regarding the terms “variable” and “fixed” will be eliminated if
Suppliers were required to use effective dates, explain when prices will change, when
those changes will be implemented, and how Suppliers will communicate the change to
its customers. UI Response to Late Filed Exhibit No. 3.
4.
Position of Dominion
Dominion supports the Department’s continued use of the price postings to the
CTEnergyInfo Rate Board. However, to improve the effectiveness of the postings and
consumer understanding of the information provided there, Dominion suggests that the
Department create separate pages and links for fixed, variable and renewable price
offers and suggests the following definitions for these offers:



Variable Price – price that is subject to change at predefined intervals (e.g.,
daily, weekly or monthly) pursuant to the terms of the Supplier contract;
Fixed Price – price that is set for a specified period of time pursuant to the
terms of the Supplier contract; and,
Renewable – offer for a product that exceeds the then applicable Renewable
Portfolio Standard requirement. Dominion Brief, pp. 14 and 15; Dominion
Response to Late Filed Exhibit No. 3.
Dominion further states that the Department should continue to include generally
available offers (i.e., prices that are available to an entire customer class or rate tariff,
that are typically available for a month, several months or one-year) and that reflect the
all-in cost of generation services in order to provide an “apples-to-apples” comparison to
the applicable EDC’s Generation Services Charge rate. The Department should allow
Suppliers and Aggregators the option of posting these offerings, rather than making the
posting mandatory. Id.
Dominion further recommends that the Department continue its current practice
regarding the posting of introductory offers as set forth in its September 15, 2009
correspondence to all licensed Suppliers in Docket No. 07-05-33. In order to avoid
consumer confusion and provide an accurate indication of the price that consumers can
expect to pay once they are enrolled with the Supplier, Dominion recommends that the
Department require Suppliers submitting offers to more clearly indicate the date on
which the offer will expire (i.e., offer valid for customers enrolled by specified date). Id.
Dominion further recommends the manner in which offers should appear on the
Rate Board:




Offers should be grouped together by type (i.e., variable, fixed, renewable);
Offers should be posted based on lowest to highest price;
Offers with a fixed price of a longer term should be posted higher than the
same fixed price with a shorter term;
Offers with a variable price of a longer term should be posted higher than the
same variable price with a shorter term; and
Docket No. 10-06-24

5.
Page 18
Renewable offers with a higher renewable percentage should be posted
higher than those with a lower percentage available at the same price. Id.
Position of MXenergy
MXenergy concurs with the position taken by Dominion and RESA as submitted
in Late Filed Exhibit No. 3 regarding the manner in which prices should be posted as
well as RESA’s position that Suppliers not be required to post their offers to the Rate
Board. MXenergy Brief, p. 14.
To reduce customer confusion, MXenergy supports uniform definitions for fixed,
variable and renewable products. In addition, to create a more user friendly pricing aid,
MXenergy believes that the Department should require Suppliers to submit the effective
date for all offers and post this information to the Rate Board. MXenergy also supports
the creation of a retail competition working group to help stakeholders in the
Connecticut market work out issues in a collaborative process. Id.
6.
Position of RESA
RESA states that the Rate Board is a valuable resource for both consumers and
Suppliers and that the website has improved over the past several years. RESA
supports the continued use of this resource and suggests that providing additional
sorting of fixed and variable Supplier offers would further improve the site so that
customers can compare like offers. RESA states: “By its very nature as a tool to
facilitate comparisons among competing products, the rate board works best when
various Suppliers’ offers can be evaluated on an apples-to-apples basis. Thus, in the
simplest case, if a number of Suppliers offer a product that has the identical term,
pricing structure and termination fee, consumers can easily compare the offers based
on price.“ In addition to more sorting, RESA recommends including more information to
describe how and when variable prices change. RESA Brief, pp. 4 and 5; Late Filed
Exhibit No. 3.
RESA further states that the goal of facilitating price comparisons is sound,
however, putting that desire into practice is challenging. With the plethora of variable
prices and adjustments in the marketplace, affecting both Standard Service and
Supplier prices, quoting a simple price per kWh across all offerings is difficult and can
be misleading to customers. RESA suggests that posting prices that are inconsistently
calculated may be worse than posting no prices at all and suggests further dialogue with
staff through a Working Group to address this issue. RESA Written Comments, p. 12.
RESA does not believe Rate Board participation can or should be made
mandatory for any Supplier. For example, the Energy Plus marketing model does not
lend itself to participating on the Rate Board. It relies on targeted direct mail and email
marketing combined with value added benefits (such as airline miles; credit card points,
etc.) in addition to the provision of basic electric supply. Because the suite of benefits
varies based on customer preference, Energy Plus appears not to have a generally
available offer for the public. Energy Plus relies on targeted direct marketing based on
known data and preferences at the individual customer level. This allows Energy Plus
Docket No. 10-06-24
Page 19
to selectively market and tailor products to individual consumers. Energy Plus
recognizes that this approach limits its ability to “mass market” via broad based media
such as the Rate Board, however, the company’s marketing targets only individuals who
are most likely to be interested in a value added offer that extends beyond basic electric
service. Id.; RESA Response to Late Filed Exhibit No. 3.
RESA believes that instead of the current mandate, and similar to the disclosure
label required under C.G.S. §16-245p, the Department should establish standard
guidelines for posting to the Rate Board. With those rules in place, Suppliers can elect
between creating products that conform to the Rate Board guidelines, and gaining the
significant consumer exposure the Board provides, or decide to forego that exposure
and allow the marketplace to decide whether those offers are in demand. Id.
7.
Position of NEM
NEM states that the number of Supplier offerings has increased in the past two
years. NEM’s members believe that the Rate Board may be confusing to consumers
because the manner in which the offerings are currently listed has the effect of diluting
the value of the different products that are offered. To remedy this, and as an initial
step to help consumers use the Rate Board to evaluate offers, the offers should be
organized by product type, i.e., groupings by fixed, variable, and renewable offers. This
additional sorting would provide consumers with a more straightforward and meaningful
basis to compare Supplier offerings. NEM Written Comments, p. 9.
8.
Department Analysis
In 2007 the Department witnessed an increase in Supplier marketing activity
directed to residential and small business customers. As a result, the Department
sought to provide information so customers could better understand how to participate
in retail choice as well as provide the prices that were being offered to these customer
classes at that time. To achieve this goal, the Department developed the Rate Board
and established requirements concerning the posting of prices to it. Disclosure Label
Decision, p. 10.
The Department has modified the appearance of the Rate Board and adjusted
the Supplier price filing standards over time. Participants generally agree that these
changes have kept pace with the retail market and have resulted in a valuable resource
for Connecticut consumers. Tr. 9/22/10, p. 52.
The Rate Board is a tool that consumers have been using for the past three
years to compare Supplier offers. In addition, there are links to a variety of information
pertaining to retail choice (e.g., FAQs, Questions to ask Suppliers). As discussed
below, the Department will continue to refine this information to provide Connecticut
consumers a user-friendly and reliable resource for information about electric choice.
a.
Rate Board – Current Appearance and Filing Standards
The general appearance of the Rate Board contemplated in 2007 included the
Supplier’s name, toll free number, price and a brief description of each offer. 2008
Docket No. 10-06-24
Page 20
Disclosure Label/Direct Billing Decision, p. 10. At that time, the Department established
the following standards, indicating that they could be modified from time-to-time.








All pricing must be submitted under the 2008 Disclosure Label/Direct Billing
Decision, on a form to be prescribed by the Department;
All prices must reflect the all-in cost of providing generation services, that is,
the full requirements cost of generation;
Suppliers must disclose the utility and rate class (i.e., tariff) to which the price
applies;
Suppliers participating in the Amended Referral Program, approved in the
2007 Amended Referral Program Decision, must include the one-year fixed
price being offered under that program;
Suppliers participating in the Amended Referral Program must include the
applicable time-of-use price6;
Suppliers must submit any change in pricing three business days in advance
of the change;
Distribution company prices will be listed first; and
Suppliers will then be listed alphabetically.
2008 Disclosure Label/Direct Billing Decision, p. 11.
Over time, the Department has modified the appearance of the Rate Board and
adjusted the Supplier price filing standards. For example, the Rate Board now includes
a column to educate consumers about renewable content (i.e., Connecticut’s renewable
portfolio standards) and, pursuant to a letter dated September 15, 2009, in Docket No.
07-05-33, the Department developed rules for posting introductory offers. These and
other modifications were designed to keep pace with changes to the Connecticut retail
market for electricity. The Department will further modify the Rate Board and price filing
standards through this proceeding. An updated list of these standards is provided
below. The Department intends to monitor the market and adjust the Rate Board and
filing standards as necessary and will use the Supplier Working Group established
herein to solicit Supplier input regarding these changes.
b.
Rate Board – Defining Supplier Offers
There was considerable testimony regarding the meaning of fixed versus variable
prices. Based on its review of the evidence in this proceeding the Department finds the
following definitions will apply to Supplier offers that are available to groups of
customers that have enrolled under a price plan pursuant to each Supplier’s terms and
conditions.

6
Variable Price – price that is subject to change at predefined intervals within a
one month period or within one complete billing cycle (e.g., daily, weekly, or
bi-weekly);
Participating Suppliers must offer Time-of-Use rates as a condition of their participation in the Referral
Program. See, Decision dated October 10, 2007, in Docket No. 05-08-05RE02, DPUC Investigation Into
the Process By Which Customers Can Choose An Electric Supplier When Initiating Electric Service –
Amended Referral Program, p. 4.
Docket No. 10-06-24




Page 21
Monthly Variable Price – price that does not change for 30 days, a complete
calendar month or one complete billing cycle;
Fixed Price – price that does not change for a specified period of time of not
less than 90 days, three calendar months or three complete billing cycles;
Renewable – offer for a product that exceeds the applicable minimum
Renewable Portfolio Standard requirement;
Promotional Price – a price that is not available to current customers or is
designed to increase customer enrollment with a Supplier. Promotional
prices will not be used to calculate potential savings on the Rate Board.
c.
Sorting Supplier Offers
Participants generally agree that allowing customers to sort Supplier offers by
additional categories would improve the Rate Board. See, Participant Comments,
Briefs and Reply Briefs, supra; Tr. 9/22/10, pp. 47-52. The current default setting for the
Rate Board lists offers from lowest to the highest price allowing consumers to compare
all offers based on price and potential savings. In addition, the Rate Board allows
customers to sort current offers based on renewable content (in descending order from
the highest to the lowest renewable content) and to sort the Suppliers alphabetically by
Company thereby grouping and displaying all offers for each Supplier.
Based on the evidence in this proceeding, the Department finds that creating a
more user-friendly sorting feature as well as increasing the number of categories by
which customers can sort Supplier offers will improve the Rate Board. Therefore, the
Department will include additional sorting of Supplier offers based on the definitions
noted above. The Department will maintain the current default setting, providing a list of
all offers based on price when customers consult the Rate Board. Consumers will then
be able to sort by Company, renewable content and rate plan (i.e., fixed or variable).
The Department is aware that Suppliers seek the best possible placement on the
Rate Board (i.e., top of the stack) to achieve greater visibility. The Department
acknowledges that there are challenges to achieving a ‘perfect’ situation with regard to
sorting Supplier offers to assure maximum visibility and premium placement. For
example, assume two fixed price offers of $.09/kWh; one for a term of three months and
the other for a term of six months. One could argue that the six-month plan is a ‘better
deal’ and should be listed ahead of the shorter term offer. The Department is aware of
these matters and will attempt to address these concerns.
d.
Duration of Offers
The market has tended to focus on defining price plans as fixed or variable. In
turn, the Department has attempted to use these terms on the Rate Board. The
Participants generally agree however, that consumers would be better served if the
Rate Board provided the duration of each offer rather than a descriptive phrase that
could be misinterpreted.
The Department concludes that providing the duration of all offers will simplify the
presentation of information and provide better information to consumers. Suppliers will
Docket No. 10-06-24
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be required to include the start and end date for all offers when submitting their price
filings, which information will be displayed on the Rate Board.
e.
Requiring Participation on the Rate Board
Suppliers generally believe that participation on the Rate Board should be
voluntary. As discussed herein, interest in the retail electric market has significantly
increased over the past few years. Unlike the innumerable mature retail markets and
products that exist in the U.S. in which consumers can easily find information to
compare products and prices and get the information necessary to make informed
choices, the retail electric market in Connecticut is still developing. The Department
finds that it will take some time before this market is considered mature. Absent the
Rate Board, there is no single resource consumers can access to compare Supplier
offers and get the information they need to learn about retail choice. It is therefore, vital
that the Department continue to provide this information to consumers.
The 2008 Disclosure Labe/Direct Billing Decision required that any Supplier
offering a price that is generally available to residential customers submit that price to
the Department for posting to the Rate Board. That Decision allowed, but did not
require, Suppliers to post offers for business customers as well. Shortly after issuing
that Decision, in addition to residential offers, Suppliers voluntarily began submitting
generally available generation prices for business customers. Offers for this customer
class have continued, and the Rate Board now regularly includes a number of business
offers.
Based on the foregoing, the Department will continue to require that licensed
Suppliers submit all generally available residential offers for posting to the Rate Board.
In addition, the Department will require that all generally available business offers be
submitted as well.
There was discussion regarding the complexity of posting value added Supplier
offers to the Rate Board and whether the Department should require that these types of
offers be posted. Tr. 9/22/10, p. 84. In response to the Department’s request, Energy
Plus Holdings LLC provided the following information on this issue:
The Energy Plus marketing model does not lend itself to
participating on the Rate Board. It relies on targeted direct mail and
email marketing combined with value added benefits (such as
airline miles; credit card points, etc.) in addition to the provision of
basic electric supply. Because the suite of benefits varies based on
customer preference, Energy Plus does not have a generally
available offer for the public. Energy Plus relies on targeted direct
marketing based on known data and preferences at the individual
customer level. This allows Energy Plus to selectively market and
tailor products to the individual. Joint RESA and Energy Plus
Holdings Response to Late Filed Exhibit No. 3.
Docket No. 10-06-24
Page 23
Subsequent to issuing the Disclosure Label/Direct Billing Decision, the
Department was concerned that posting of value added offers would confuse
customers. The Department has not required that these offers be submitted for posting.
After further consideration and based on the experience gained over the last two years
in managing the Rate Board, the Department concludes that all residential and business
offers (except negotiated rates) should be available on the Rate Board to allow
customers the opportunity to explore all pricing options. The Department will require
that all residential offers be submitted for posting to the Rate Board, including value
added plans.
Suppliers shall continue to use the price filing form that was implemented through
the Disclosure Label/Direct Billing Decision, Order Number 4, to submit their prices.
Suppliers offering value added options shall provide a brief narrative description of each
option on the price filing form. The Department will consider adding information to the
Rate Board to explain these offers.
f.
Revised Standards
The general standards are hereby revised as follows:
 All pricing must be submitted under the 2008 Disclosure Label/Direct Billing
Decision, on a form to be prescribed by the Department;
 All residential and business offers (except negotiated rates) must be submitted
for posting to the Rate Board;
 All prices must reflect the all-in cost of providing generation services, that is, the
full requirements cost of generation;
 All prices must include the term of the offer, i.e., the dates on which each price
becomes available and when it ends;
 Suppliers must identify the EDC (i.e., CL&P or UI) and tariff (e.g., CL&P Rate 1,
UI Rate R) to which the price applies;
 Suppliers must submit any change in pricing three business days in advance of
the change;
 EDC Standard Service rates may be listed first or among Supplier offers; and
 The Department will determine the default view of the Rate Board.
E.
DISCLOSURE LABEL REQUIREMENTS
The current Label was established in the 2008 Disclosure Label/Direct Billing
Decision to provide a means for Suppliers and the EDCs to fulfill the requirements of
C.G.S. §§ 16-245p(a) and 16-245o(e). A Working Group, comprised of licensed
Suppliers, the EDCs, and the Department, developed the Label to provide a method of
disclosure to customers of Suppliers and the EDCs, as required by law.
Revisions to the original Label, developed by the Department in consultation with
the Consumer Education Advisory Council, created by Public Act 98-28, were made in
response to changes in the competitive electric marketplace. As a result, a significant
Label modification was made by inserting additional educational information. To
address the potential complexity of Suppliers’ electric generation pricing and contracts,
Docket No. 10-06-24
Page 24
the current Label includes the “Questions to Ask Suppliers and Aggregators” to assist
consumers in understanding and gathering information about Supplier offers.
The template for the Label is updated annually to reflect NEPOOL GIS power
sources in a chart that includes CT Class I and CT Class II renewable sources for the
most up-to-date annualized period. The Label template and the Decision are on the
Department’s Information for Suppliers and Aggregators webpage, accessible under
Electric
on
the
Department’s
homepage
or
via
http://www.ct.gov/dpuc/cwp/view.asp?a=3356&q=414004.
The Label also provides ongoing annual disclosure by Suppliers and the EDCs to
enrolled customers pursuant to §§16-245p and 16-245p(c) that allows distribution of the
Label to occur via email, Supplier direct billing insert, other mailing or per customer
request to a toll-free telephone number provided by the Supplier.
Each Supplier must file Labels with the Department’s ESID website when a
Supplier starts to actively market to Connecticut customers. Annual versions of each
Supplier’s Label, reflecting the updated GIS Power Sources for the prior year period,
must also be posted to the ESID. The ESID was created pursuant to C.G.S.
§16-245p(b) to provide further disclosure that the Department maintains, and makes
available to consumers information about each Electric Supplier and EDC. In addition
to the Label, other types of Supplier information to be made available on the ESID
include: company and customer service information; rates; contract terms & conditions;
resource mix percentages; and air emissions. The ESID may be accessed via the
“Information for Suppliers and Aggregators” webpage (Webpage) or at
http://www.dpuc.state.ct.us/EL_Aggre.nsf. The Label, in conjunction with the ESID,
comprises an ongoing and comprehensive method for Suppliers’ disclosure to
customers.
The Department requested comments on the Label and the associated Label
documents that appear on the Webpage. Suppliers indicated that the label is
appropriate for the current timeframe. However, as the competitive market continues to
evolve, the Label may require further modifications to reflect marketplace, legislative or
Department initiated changes that would affect the information provided by the Label.
Tr. 9/22/10, pp. 166-168. If such is the case, the Department may reconvene, under the
2008 Disclosure Label/Direct Billing Decision, a working group of Suppliers and the
EDCs to re-assess the effectiveness and relevancy of the current Label and its contents
to the marketplace at that time.
F.
THREE-WAY CALL CENTER INQUIRIES
CL&P and UI raised concerns about three-way calls which are made to the EDCs
by customers when a third party is on the line to obtain customer account information so
the account can be enrolled with a particular Supplier. Since customers may not have a
copy of their bill with the account number and the EDC identification code when
enrolling with a Supplier, the EDCs indicated that they will provide the information when
the customer calls to request it. To obtain the account information, the customer must
confirm that he/she is the account holder by providing confidential identification
information such as a social security number. This creates a situation where the
Docket No. 10-06-24
Page 25
customer may unwittingly agree to provide information and not realize the potential
consequences of this disclosure to third parties.
According to UI, occasionally a Supplier or third party initiates the call to its Call
Center to request customer information stating that the customer is on the line and that
he/she needs account information. UI indicated that its primary concern with these calls
is that in asking the customer for the personal identification information, such as a social
security number, the Company thus risks inadvertently disclosing it to the Supplier or
third party. Because these calls were becoming a common practice and congesting the
Call Center phone lines, UI no longer allows them. UI believes that this activity should
be prohibited in the Guidelines, and that ideally the Department should require that the
customer use a copy of the bill or call UI independently to obtain the information, and
provide it to the Supplier or third party in a return call. Tr. 09/22/10, pp. 154-156.
CL&P stated that it also experienced many instances of three-way calls and in
most cases it could determine that the customer was being prompted by a marketer
about what he/she needed to ask. Although it hasn’t discontinued these calls, if the
customer has a Supplier on the line, CL&P informs the customer that the Company
cannot give them information on a third party call. If the customer does not inform
CL&P about the third party and it appears that there is no one else on the line in the
background, the Company must bear the risk of unintentionally revealing the customer’s
confidential information. Tr. 09/22/10, pp. 156-157.
The EDCs believe that three-way calls put them in a precarious position of
possibly releasing customers’ confidential information when they do not have the ability
to verify whether or not a third party is, in fact, on the call.
OCC agrees with UI that the activity of three-way call center inquiries be
“specifically restricted in the Guidelines” in order to protect consumer information and
that the practice of Suppliers initiating three-way call center inquiries with customers to
obtain confidential information be prohibited. OCC Brief, pp. 2 and 3.
The Department understands the EDCs’ concerns. Customers should be able to
obtain their account information from the EDCs with the ease of a phone call, regardless
of who else is on the phone with the customers or who prompted the customers to ask
what information. Requiring the customers to use a copy of their bills or to hang up and
recall the EDC independently would place a burden on customers, greatly discouraging
customers from switching to competitive Suppliers, dampening the market. The
customers should be entrusted to use their own personal account information, and if
they choose to disclose their information to a third person, the EDCs should honor the
customers’ wishes. The problems raised by the EDCs could be easily resolved by the
EDCs asking consent from the customers. Thus, in the event of a three-way call or
when an EDC believes a third-person is in the background of the phone call, the EDC is
required to: (1) inform the customer that state laws prohibit the EDC from disclosing
certain information of the customer’s account to third parties without the customer’s
consent; (2) warn the customer that the customer’s personal account information may
be disclosed during the call; and (3) ask the customer for consent to disclose such
information to the third-party on the phone.
Docket No. 10-06-24
Page 26
In their Written Exceptions, UI and CL&P urged the Department to prohibit threeway calls to the service call centers. According to UI and CL&P, the net result will be an
increase in such calls, and customer service will be clogged with calls to facilitate new
enrollment, negatively impacting the ability of UI and CL&P to conduct their other
businesses and to effectively and efficiently serve customers calling in for various other
reasons. UI Written Exceptions, pp. 7-8; CL&P Written Exceptions p. 9. The
Department is not persuaded by UI and CL&P’s arguments. There is no evidence
showing such an increase in three-way calls that would clog the EDCs’ customer
service call centers. Moreover, facilitating customers switching to competitive suppliers
is an important part of customer service that must be supported by the EDCs to foster
growth of the electric market. UI and CL&P have not demonstrated how customer calls
to switch suppliers are less important than other types of calls and why these three-way
calls should be prohibited but other informational calls (for instance, customers asking
about C&LM programs, smart meters, other rate classes, etc.) should not be.
Therefore, the Department will require the EDCs to use a script in informing the
customers of the possible disclosure of their personal information, as discussed in this
section. The EDCs will have an opportunity in the Working Group to present relevant
data or evidence and other workable proposals.
G.
DIRECT BILLING BY ELECTRIC SUPPLIERS
1.
Legal Standards
C.G.S. §16-244i(c) provides:
Each electric distribution company shall continue to provide metering,
billing and collection services, except that, on and after the effective date
of the regulations adopted pursuant to section 16-245d, which allow an
Electric Supplier to provide direct billing and collection services for electric
generation services and related federally mandated congestion costs that
such Supplier provides to its customers that use a demand meter or have
a maximum demand of not less than five hundred kilowatts and that
choose to receive a bill directly from their Electric Supplier, an electric
distribution company shall not provide such billing and collection services
for such customers. The department shall determine billing and metering
protocols and any appropriate cost-sharing allocations among electric
distribution companies and Electric Suppliers. Notwithstanding an Electric
Supplier's right, in accordance with the general statutes, to terminate its
contract with a customer for the provision of generation service by reason
of the customer's nonpayment of the charges directly billed by the Supplier
to the customer, an Electric Supplier shall not disconnect electric service
to the customer or otherwise terminate the physical delivery of
electricity to customers directly billed by the Electric Supplier.
(Emphasis Added).
Docket No. 10-06-24
Page 27
C.G.S. §16-245d (a) states:
The Department of Public Utility Control shall, by regulations adopted
pursuant to chapter 54, develop a standard billing format that enables
customers to compare pricing policies and charges among electric
Suppliers. Not later than January 1, 2006, the department shall adopt
regulations, in accordance with the provisions of chapter 54, to provide
that an Electric Supplier may provide direct billing and collection services
for electric generation services and related federally mandated congestion
charges that such Supplier provides to its customers that have a
maximum demand of not less than one hundred kilowatts and that choose
to receive a bill directly from such Supplier.
Section 16-245d also requires that any EDC or Supplier that provides direct
billing of the electric generation service component and related federally mandated
congestion charges include certain information on each customer’s bill.
2.
Position of CL&P
CL&P generally agrees that direct billing can be expanded to all customers.
CL&P notes that since the marketplace has matured, Electric Suppliers, brokers and
Aggregators should bear the administrative responsibility of competition, and its
attendant costs. CL&P believes that Suppliers should take on the responsibility and
cost for billing their customers or, in the alternative, pay the EDCs a reasonable fee to
bill on their behalf. CL&P Written Comments, p. 2; CL&P Letter in Lieu of Brief, p. 2.
3.
Position of UI
UI states that the general consensus among Suppliers is that there was no
reason to prohibit direct billing of any customer taking generation services from a
competitive Supplier. UI agrees and supports Supplier direct billing. The provision of
direct billing for all customers would provide Suppliers with the ability to bill any of their
customers independent of the EDC’s billing system and allow Suppliers to offer their
own unique billing options without impacting the EDCs billing systems and workforce
needs. UI Brief, p. 2.
4.
Position of RESA
RESA states that the EDCs agree that there are no technical barriers to
expanding the scope of customers for whom Suppliers are permitted to issue bills
directly. Making direct billing available to customers increases the number of options
available to consumers and thereby potentially adds value to consumers. Not all
Suppliers choose to avail themselves to the direct billing option, however, and RESA
believes that those Suppliers who elect to rely on EDC billing have the right to continue
to do so. Of course, for Suppliers participating in the purchase of receivables option,
utility billing is essential. RESA Brief, pp. 6 and 7.
Docket No. 10-06-24
Page 28
RESA notes that CL&P in its Written Comments suggests that Suppliers be
required to either bill all customers directly or through the assessment of “a reasonable
fee” to reflect the cost of EDC billing on behalf of the Supplier. RESA cautions the
Department to proceed carefully in this area because not only would the implementation
of “a reasonable fee” necessitate detailed cost analysis and allocations to arrive at the
correct fee, this policy would necessitate an unbundling of the utility billing function
within the generation portion of the bill.
According to RESA, simply assessing a fee on Suppliers who utilize EDC billing
without fully unbundling the billing function will mean that customers taking competitive
supply will pay for billing in their generation charge while customers taking standard/last
resort service will see those charges embedded in their distribution fees. This harms
competitive markets in two ways. First, it means that customers taking competitive
supply will pay for billing services twice. 7 Second, it will distort the comparison of
generation prices offered by a Supplier (which will include the Supplier’s billing
assessment from the EDC) versus generation prices available to a consumer through
standard/last resort service (which will not include billing costs). RESA submits that the
extensive time and effort needed to properly unbundle these functions is not of a
sufficient priority at this time to justify the devotion of significant resources to the
exercise.
5.
Position of Dominion
Dominion supports customer choice, including allowing customers to select their
Supplier-related billing arrangements. Accordingly, Dominions supports permitting
Suppliers the opportunity to direct bill any consumer who desires such a billing option.
It has been Dominion’s experience that many smaller customers would prefer to receive
one bill for their electric service, rather than multiple bills. To ensure these customers
still have that choice, Dominion requests that the Department not require that all
customers be direct billed. Dominion Brief, p. 18.
With respect to Supplier payment of billing and other administrative costs,
Dominion generally supports Suppliers paying the reasonable, incremental costs
associated with the implementation of programs that benefit the competitive retail
electric market. It is unclear however, what additional costs the EDCs actually incur to
of course simply include Supplier charges on bills that they would have to send to
customers as a matter to collect distribution charges. For example, during the hearing
in this matter, UI testified that the only incremental cost associated with Supplier billing
is the cost of setting up Supplier rates in its system. Since the EDCs have an
established fee for such service it would be unreasonable to assess additional costs for
this service. Since there is no incremental cost for including Supplier charges on EDC
bills and a fee has already been established for configuring Supplier rates, the
Department should decline CL&P’s suggestion that Suppliers pay the EDCs a fee for
consolidated billing. Dominion Reply Brief, p. 3.
Under the CL&P proposal, customers taking competitive supply would pay the “reasonable fee”
for their own billing costs plus would pay a share of the billing costs for standard/last resort service
customers through their distribution charges.
7
Docket No. 10-06-24
6.
Page 29
Position of MXenergy
MXenergy believes that retail Supplier should not be responsible for billing their
customers nor should Suppliers be subject to a fee for this service as suggested by
CL&P. MXenergy continues, stating that at this point in the Department’s investigation
of retail supply that the utility billing function has not been disengaged and segregated
as a specific cost item on customer bills. The cost causation and accurate unbundling
of this function is complicated, time consuming and would require a full cost of service
study. The Department must use caution when considering this matter and should not
move forward based on the limited discussion that took place in the instant proceeding.
MXenergy Reply Brief, p. 2.
7.
Department Analysis
The Department addressed the issue of direct billing by Suppliers for CL&P in the
Decision dated December 8, 2006, in Docket Nos. 03-07-02RE09, Application of The
Connecticut Light and Power Company To Amend Its Rate Schedules – 2007 Rates,
and 03-07-01RE06, Application of The Connecticut Light and Power Company To
Establish The Transitional Standard Offer – FMCC Allocator, Decision, p. 11. The
Department also addressed this issue for UI in the Decision dated December 19, 2006,
in Docket No. 05-06-04RE02, Application of The United Illuminating Company To
Increase Its Rates and Charges – 2007 Rates and Terms and Conditions, and Docket
No. 03-07-15RE03, Establishment of The United Illuminating Company’s Transitional
Standard Offer – FMCC Allocator, and Docket No. 06-11-05, DPUC Review of The
United Illuminating Company’s Periodic Energy Adjustment Charge.
Those Decisions state that C&I customers with demands below 250kW should be
allowed to enter into contracts for generation services and have the option of being
directly billed for these services. The Department required CL&P and UI to offer direct
billing of generation services to its C&I customers with monthly demands of 50kW or
greater and indicated that expanding direct billing to this larger population of C&I
customers would provide CL&P and UI time to gain experience with this change.
Regarding the residential class, the Department believed that expanding the direct
billing of generation services to this customer class could be problematic if a large
number of residential customers took this option. The Department did not authorize
direct billing of residential customers at that time but indicated it would revisit this issue
in the future. CL&P Decision, p. 11; UI Decision, p. 33.
The EDCs propose that Suppliers be required to assume the responsibility of
direct billing of their customers. The EDCs state that there are Suppliers in both service
territories that are providing the direct billing of generation services to business
customers with monthly demands of less than 50kW as well as residential customers.
Tr. 9/22/10, p. 12; CL&P and UI Response to Late Filed Exhibit No. 1. Other
Participants believe that the Department should adopt a goal of expanding options for
customers, and in this case should allow customers to choose whether direct billing is
desirable for them. However, Suppliers should not be required to take on this
responsibility. Tr. 9/22/10, pp. 14-19.
Docket No. 10-06-24
Page 30
Based on the evidence in this proceeding, the Department finds that there is no
reason to preclude Suppliers from directly billing any customer class. All customers
may be direct billed by Suppliers. Suppliers may choose this billing option and cannot
be required to do so by the EDCs. The Department will not require Suppliers to assume
this responsibility. Based on the foregoing, Suppliers may choose to offer direct billing,
choose not to offer direct billing, or choose to offer both options. Customers therefore
would not be forced onto direct billing since they can choose between different
Suppliers, pricing and billing options.
The EDCs indicated that they provide load data for all direct billed customers.
Tr. 9/22/10, p. 18. The Department will require that the consumption used to calculate
direct billed generation services by Suppliers must equal the consumption used to
calculate the EDC’s delivery bill for the same billing period.
The EDCs also propose that Suppliers be charged a fee for having the EDCs bill
for generation services on behalf of the Supplier. Implementation of this policy was not
fully explored during this proceeding and would likely require a detailed cost analysis
and allocation to arrive at the correct fee. Based on the foregoing, it would be
inappropriate for the Department to implement a fee at this time. However, the
Department will consider this matter as part of the Working Group that is being
established under Section H, Working Group, herein.
H.
WORKING GROUP
1.
Position of MXenergy
MXenergy recommends that the Department form a working group to address
the changes that are occurring in the retail energy market in Connecticut. MXenergy
indicates that similar stakeholder working groups have been formed in Maryland and
Pennsylvania and that these efforts have helped to work out retail energy market issues
within a collaborative process. MXenergy supports regularly scheduled meetings to
assure that this working group will be productive. MXenergy Brief, p. 15; MXenergy
Reply Brief, p. 1.
2.
Position of UI
UI suggests that the Department establish a working group that would include
Suppliers, Aggregators, EDCs, Department staff and representatives of the OCC. This
group would address, in a collaborative manner, many of the issues that were
discussed in connection with this proceeding – from improvements to the Rate Board to
any other particular concerns as they arise from time to time.
UI cites the
CTCleanEnergyOptions and EBT Working Groups as examples of past successes in
this regard. UI Brief, p. 1.
3.
Department Analysis
During the course of the hearing, there was discussion about the potential for the
creation of a working group for Suppliers, Aggregators, EDCs, Department staff,
representatives of OCC and any other interested persons. Comments focused on the
Docket No. 10-06-24
Page 31
potential benefits a working group would have for the participants in the marketplace.
Tr. 9/22/10, pp. 102, 103, and 140. Upon review, the Department supports the
establishment of a working group for the purpose of having a mechanism in place to
reach collaborative agreements and resolution of common issues, other than matters
currently encompassed by the EBT working group, among the Suppliers, Aggregators,
EDCs and any other interested persons. The Department will designate members of its
staff to monitor and, if needed, participate in the working group and adjudicate if need
be, any issues that cannot be resolved by the working group. The Department will defer
to the Working Group to establish the guidelines for and timeframes for resolving issues
that are agreeable to everyone who participated in this Docket. The Department
expects a full collaborative effort by all parties. The Working Group should establish
details of what the working group focus will be. The Department expects everyone to
make a good faith effort to address and resolve common ground issues. The
Department will consider any issues presented by the Working Group.
I.
MID-CYCLE PRICE CHANGE AND ENROLLMENT
1.
Position of RESA
RESA states that under current Department practice, customers enrolling with a
retail supplier begin to take service from their chosen supplier at the commencement of
their next billing cycle. The switching customer receives its first bill reflecting the new
supplier’s pricing after this billing cycle concludes. This lag, often seven weeks or more,
is very confusing to customers, who continue to receive service from Standard Service
generation or their prior supplier weeks after they have taken all the steps needed to
affect a switch. A long delay between when a consumer evaluates an offer (e.g. a price
quoted on the Rate Board) and the time enrollment takes effect often means that the
price reflected on the customer’s first alternate supplier bill does not match the price that
the consumer opted for on the Rate Board. Accelerating the time from when the
customer completes the steps to switch, enrollment and having the alternate supplier’s
price appear on the bill would minimize these problems. RESA Brief, pp. 5 and 6.
RESA further states that based on the testimony of the EDCs, it appears that
there is no technical barrier to effecting enrollments at times other than the beginning of
a billing cycle, so long as there is only one new enrollment per billing cycle. With (at
most) two different suppliers serving a customer during a billing cycle, prorating the bill
based upon the number of days in each supplier’s period appears to be well within the
capability of the existing EDC customer information systems. RESA requests that the
Department direct the EDCs to process enrollments during billing cycles rather than
waiting for the next billing cycle. Id.
2.
Position of UI
UI states that RESA and Dominion recommend that the current process of
enrollments on the meter reading date be changed to allow mid-cycle enrollments. UI
argues that there is no record evidence in this proceeding for the Department to make a
determination regarding mid-cycle billing. Instead, there are a number of reasons for
the Department to reject this request. Mid-cycle enrollment would be a significant
change and would, indeed, require a comprehensive change to the current operation of
Docket No. 10-06-24
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the enrollment process. It would impact all relevant Company processes, including rate
changes, bill print, mailing costs and every issue/process surrounding customer
bills/billing. Any implementation of mid-cycle enrollments would drastically increase the
number of pro-rated bills received by customers. As the Department is aware, pro-rated
bills can significantly increase customer confusion and customer calls to the Company,
Suppliers and the Department. UI Reply Brief, pp. 1-3.
UI states that the RESA and Dominion Briefs misguidedly characterize this
change as a simple item to administer when in fact they are very complex. UI goes on
to state that suppliers control the enrollment process and can, by their own actions,
provide customers with precise information and updates as to the enrollment process
and projected (or updated) enrollment dates. To UI’s knowledge, however, most have
not implemented their own processes to manage the customer enrollment process and
communications concerning the same. Therefore, instead of seeking to change the
current enrollment structure UI believes that suppliers should improve communications
with their customers to better control enrollments through the current process. UI states
that there is no reason to place additional significant and costly burdens on the EDCs
for what suppliers can – and should - be controlling. Id.
UI indicates that while its processes cannot currently handle mid-cycle
enrollments, its billing systems can accommodate multiple mid-cycle generation price
changes. Mid-cycle price changes would require UI to issue a pro-rated bill. UI
Response to Late Filed Exhibit No. 3; Tr. 9/22/10, pp. 60-66.
3.
Position of CL&P
CL&P indicates that its systems can accommodate multiple mid-cycle generation
price changes. Tr. 9/22/10, p. 62. CL&P did not comment on mid-cycle enrollment.
4. Department Analysis
a. Mid-Cycle Price Change
The evidence indicates that the EDCs and Suppliers can adjust some generation
prices during a customer’s billing cycle (Mid-Cycle) and issue prorated bills to
accommodate Mid-Cycle price changes.8 For example, CL&P states:
We have some, what we call non custom rates for suppliers with maybe
large numbers of customers that they want to bill one rate, and those
[rates] we do prorate. And we have what we call custom rates that do not
prorate. So [for custom rates] a change transaction would need to be sent
8
For suppliers, rate changes that are initiated during a billing cycle occur under a Variable Price plan, as
defined herein. For the EDCs, rate changes are initiated when Standard Service prices are adjusted.
EDC generation prices have recently been adjusted on January 1, 2010 and January 1, 2011. Both of
these changes occurred Mid-Cycle for many customers.
Docket No. 10-06-24
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with the new price and the next time the account billed, it would bill all at
that new price versus the noncustom, where same as UI, it would prorate
and show so many days on the old rate, so many days on the new rate.
Tr. 9/22/10, p. 62.
In its Written Exceptions, CL&P more fully explained the capability of its billing
system to issue prorated bills and further clarified the difference between custom and
non custom rates. CL&P Written Exceptions, p. 3.
UI indicates that it too can accommodate Mid-Cycle price changes, stating:
If they [suppliers] wanted the price to be 10 cents between the 15th and
the 30th of the month that would be the price that would be in there. Then
they could submit a rate change to us where the price would change on
the first of the month from 10 cents to 11 cents. So there’s two different
ways that variable [rates] can be handled on the billing cycle month . . .
what would happen is the bill would be prorated based on the number of
days. It’s a strict number-day proration. Tr. 9/22/10, p. 61.
However, while Suppliers and the EDCs can implement Mid-Cycle price
adjustments, customers choosing to remain with a supplier, but opt to change price
plans (e.g., moving from a Variable to a Fixed plan) Mid-Cycle, must wait until the end
of their billing cycle to affect what is essentially a Mid-Cycle price change.
b. Mid-Cycle Enrollment
Through their Written Exceptions the EDCs argue that Mid-Cycle enrollment is a
significant departure from the current structure that was not fully explored during this
proceeding. Further, implementing Mid-Cycle enrollment would impose a complex and
administratively burdensome process on the EDCs and would likely increase customer
confusion and dissatisfaction, rather than diminish it. The EDCs also argue that
Suppliers effectively control the enrollment process and are well positioned to inform
customers when an enrollment will take place, and can timely advise customers if
issues arise that would delay the enrollment. Therefore, the Department should not
require the EDCs to implement Mid-Cycle enrollment but instead should direct Suppliers
to better communicate information about this process to consumers. CL&P Written
Exceptions, pp. 1-8; UI Written Exceptions, pp. 1-6.
Customers seeking to switch Suppliers (i.e., either leaving or returning to
Standard Service or changing from one Supplier to another) must wait until the end of a
billing cycle to effect the enrollment with their ‘new’ Supplier.9 These customers then
begin to take service from their new Supplier at the end of the next complete billing
cycle. The switching customer therefore receives their first bill reflecting the new
Supplier’s price after this billing cycle ends.
9
For purposes of this analysis, the EDCs are considered to be a supplier of generation services.
Docket No. 10-06-24
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This lag, which can be up to seven weeks or more, is confusing to customers,
who continue to receive service from, and pay the rate associated with, Standard
Service or another Supplier’s price plan for some time after they have taken all the
steps necessary to affect a switch. In the case of a variable price plan, since Supplier
prices change regularly, the customer may not be billed the rate that was marketed at
the time the customer completed the enrollment process. Regarding fixed price plans,
while customers will likely be billed the fixed price being offered, they are unable to
immediately secure generation services at that price. The Department has fielded
innumerable consumer inquiries regarding this situation primarily from customers
complaining that they did not receive the price that was promoted at the time of
enrollment.
The long delay between when a consumer evaluates an offer (e.g. a price quoted
on the Rate Board), the enrollment, and the time the new Supplier actually bills for
generation service often means that the price reflected on the customer’s first alternate
Supplier bill does not match the price that the consumer opted for at the time of
enrollment. Accelerating the time between when a customer completes the steps to
switch, the actual enrollment with the EDC, and having the alternate Supplier’s price
appear on the bill would minimize these problems and serve the public interest. While
Suppliers can explain this lag to customers, the process remains lengthy and inefficient.
To date, the EDCs have relied on complete billing cycle periods to effect
customer enrollments and the Department has not pursued a process to accelerate
customer enrollment with Suppliers. However, the retail market has evolved and now
includes nearly 600,000 customers. As competition becomes more robust, customers
should be able to quickly respond to price signals; however, the current system does
not allow them to do so.
c. Conclusion
Customers participating in the retail electric market should not have to wait until
their next billing cycle to enroll with a new Supplier or change rates or rate plans with an
existing Supplier. Therefore, the EDCs must work to change the way in which the
system is currently operating.
The evidence demonstrates that while the structure is in place to implement
Mid-Cycle price changes through prorated bills not all necessary pricing has been
programmed into the system of each utility to do so. The evidence also demonstrates
that it is necessary to more fully explore Mid-Cycle enrollment to determine how best to
accelerate the enrollment process.
Based on the foregoing, the Department will work with the EDCs and Suppliers to
implement Mid-Cycle price changes and will more fully explore Mid-Cycle enrollment.
The Department will address Mid-Cycle price changes as its first priority in the Working
Group and will explore implementation of Mid-Cycle enrollment through the Working
Group as well.
Docket No. 10-06-24
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III.
FINDINGS OF FACT
1.
Since the start of electric deregulation in 1998, the Department has issued
certificates of registration to approximately 70 Aggregators.
2.
A number of Aggregators were marketing on behalf of Suppliers instead of
negotiating the purchase of electric generation services from Suppliers on behalf
of customers.
3.
Approximately 600,000 customers have switched to a Supplier.
4.
The EDCs have been authorized to use their IVR systems to fulfill the
requirements of the Amended Referral Program.
5.
Prior to 2007, the Department provided a list of licensed Suppliers and registered
Aggregators on its web site and distributed semi-annual bill inserts to all CL&P
and UI customers that listed the same information.
6.
Since the start of the Amended Referral Program, there have generally been
three or four Qualifying Electric Offers available at any one time.
7.
The Rate Board has generally contained 12 or more price arrangements.
8.
The EDCs continue to incur costs associated with the Amended Referral
Program pertaining to the operation, personnel/staffing, use of IVR technology
and other factors necessary to maintain the Amended Referral Program.
9.
In December 2006, about 40,000, or about 2.6% of the approximately 1.5 million
customers served by the EDCs had selected a Supplier. The number of
customers served by Suppliers has significantly increased since that time.
10.
Since 2006, there has been a significant increase in the number and type of price
plans offered by Suppliers.
11.
Each EDC has direct contact with 20% to 30% of their customers annually.
12.
All customers receive information about choosing a Supplier through quarterly bill
inserts that display the current range of price plans.
13.
The current default setting for the Rate Board lists offers from lowest to the
highest price allowing consumers to compare all offers based on price and
potential savings.
14.
Revisions to the original Label were made in response to changes in the
competitive electric marketplace.
15.
The template for the Label is updated annually to reflect NEPOOL GIS power
sources in a chart that includes CT Class I and CT Class II renewable sources
for the most up-to-date annualized period.
Docket No. 10-06-24
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16.
The EDCs provide load data for all direct billed customers.
17.
CL&P and UI can accommodate mid-cycle generation price changes through
prorated bills.
18.
Customers who seek to switch Suppliers must wait until the end of a billing cycle
to effect the enrollment with their ‘new’ Supplier.
19.
Customers have complained that they did not receive the generation price that
was in effect at the time of enrollment.
20.
The EDCs have relied on a complete billing cycle period to effect customer
enrollments.
IV.
CONCLUSION AND ORDERS
A.
CONCLUSION
In this Decision, the Department addressed various issues pertaining to
Suppliers and Aggregators, with the goal of promoting and fostering the growth of a
vigorous and competitive energy market in Connecticut. Specifically, the Department
instituted a “Guidelines for Marketing and Sales Practices for Electric Suppliers and
Aggregators” to provide better guidance to market participants, and improved
safeguards for consumers. The Guidelines clarify rules on prohibited conduct such as
the unauthorized transfer of customer accounts, deceptive sales and marketing
practices, as well as detailing requirements for customer service enrollment such as a
written contract or receipt.
The Department also affirmed its rulings in previous decisions prohibiting agency
relationships or arrangements between a Supplier and an Aggregator. Additionally, the
Department holds that Aggregators are not authorized to enter into Power of Attorney
agreements with customers, and Suppliers shall not recognize such agreements when
enrolling customers. Although the Department will lift the temporary suspension of the
Aggregator application process, and will resume accepting and reviewing applications
for Aggregator registrations, the Department will set a high standard for such
applications, and will register only entities that commit to adhere to, and operate in
accordance with, the language and intent of the law as Aggregators in Connecticut.
The Department also examines the Supplier Referral Program and finds that the
Program has achieved the Legislature’s goal of educating customers about the Supplier
market, and that the continued operation of the Program may confuse customers. As a
result, the Department concludes that it will, during this current legislative session, ask
the Legislature for guidance relative to the future of the Program.
The Department discusses the CTEnergyInfo.com Rate Board and the
requirement of all Suppliers that offer generally available rates to residential and
business customer to submit their prices for posting on said Rate Board, and addressed
the EDCs’ concerns regarding possible disclosure of customer personal account
information during three-way call center inquiries.
Docket No. 10-06-24
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The Department allows Suppliers, at their discretion, to direct bill any of their
customers, but prohibits the EDCs from requiring Suppliers to offer direct billing. Rather
than implementing a fee for the EDCs’ billing on behalf of Suppliers, the Department
established a Working Group to examine this and other issues.
Finally, the Department will form a Working Group to develop solutions to explore
Mid-Cycle enrollment and to implement Mid-Cycle price changes, and the EDCs will be
required to implement any established solutions by the Working Group.
B.
ORDERS
For the following Orders, submit one original of the required documentation to the
Executive Secretary, 10 Franklin Square, New Britain, CT 06051, and file an electronic
version through the Department's website at www.ct.gov/dpuc. Submissions filed in
compliance with Department Orders must be identified by all three of the following:
Docket Number, Title and Order Number."
1.
Effective with this Decision, the Department rescinds its Interim Order dated
August 11, 2010, for a temporary suspension for accepting applications for
Certificates of Registration to operate as Aggregators pursuant to C.G.S. §16245(l), allowing said applications process to resume.
2.
Effective with this Decision, any Aggregator who wishes to retain an existing
relationship with a Supplier shall immediately surrender its Aggregator
Registration Certificate.
3.
Effective with this Decision, any Aggregator who, at any time, finds that they
cannot comply with any provisions of Connecticut statutes or regulations or this
Decision shall immediately surrender its Aggregator registration.
4.
Effective with this Decision, in the event of a three-way call or when an EDC
believes a third-person is in the background of the call, the EDC shall: (A) inform
the customer that state laws prohibit the EDC from disclosing certain information
of the customer’s account to third parties without the customer’s consent; (B)
warn the customer that the customer’s personal account information may be
disclosed during the call; and (C) ask the customer for consent to disclose such
information to the third-party on the phone.
5.
On or before April 18, 2011, each Supplier and Aggregator shall file either (1) an
affidavit attesting that the Supplier or Aggregator does not currently have an
agency relationship with an Aggregator or Supplier that would be inconsistent
with the Department’s rulings in this Decision; or (2) a listing of all Aggregators or
Suppliers with whom such Supplier or Aggregator currently has an agency
relationship or arrangement, and a description of such relationship (e.g., sales,
marketing, customer service).
6.
The EDCs shall take the steps necessary to implement Mid-Cycle price changes
and enrollment as developed and implemented by the Working Group
established by the Department.
Docket No. 10-06-24
7.
Page 38
Effective with this Decision, Suppliers shall comply with the following price filing
standards, as discussed in Section II,D.8., herein:








All pricing must be submitted under the 2008 Disclosure Label/Direct Billing
Decision, on a form prescribed by the Department;
All residential and business offers (except negotiated rates) must be
submitted for posting to the Rate Board;
All prices must reflect the all-in cost of providing generation services, that is,
the full requirements cost of generation;
All prices must include the dates on which each price becomes available and
when it ends;
Suppliers must identify the EDC (i.e., CL&P or UI) and tariff (e.g., CL&P
Rate 1, UI Rate R) to which each price applies;
Suppliers must submit any change in pricing three business days in advance
of the change;
EDC Standard Service rates may be listed first or among Supplier offers; and
The Department will determine the default view of the Rate Board.
8.
Aggregators shall not enter into Power of Attorney agreements with customers or
enroll with any Suppliers on any customers’ behalf. No later than 30 days after
the date of this decision, any Aggregators who currently have Power of Attorney
agreements with customers shall terminate such agreements and issue written
notices to the customers to that effect or relinquish their Aggregator certificates of
registration.
9.
Suppliers shall contract with customers directly and not recognize Power of
Attorney agreements between Aggregators and customers. Power of Attorney
agreements between customers and brokers or other types of agents are
acceptable and not prohibited by law.
Docket No. 10-06-24
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APPENDIX A
GUIDELINES FOR
MARKETING AND SALES PRACTICES FOR
ELECTRIC SUPPLIERS AND AGGREGATORS
Table of Contents
I.
Applicability/Definitions
II.
Training and Monitoring
III.
Requirements for Promotional/Marketing Materials and Customer
Enrollment
IV.
Sales and Marketing Practices
____________________________________
I.
APPLICABILITY/DEFINITIONS
(a)
These guidelines are intended to facilitate the effective operation of a vigorous,
dynamic, yet fair, competitive energy market, to the benefit of consumers, Electric
Suppliers (Suppliers), Electric Aggregators (Aggregators) and Electric Distribution
Companies (EDCs) alike. These guidelines describe the standards that Suppliers and
Aggregators and their agents must follow when marketing or providing services to
customers in Connecticut. While these guidelines are comprehensive, they cannot
address all of the possible issues that may arise when Suppliers or Aggregators interact
with customers. Suppliers and Aggregators are expected to conduct themselves with
integrity and fairness and to use good judgment to avoid any practices that may appear
to be intimidating or aggressive, especially when dealing with vulnerable customers,
such as the elderly.
(b)
As used in these guidelines:
(1)
“Agent” means any person, whether an employee, representative,
independent contractor, broker, marketer, vendor, sales conduit through multilevel marketing, or member of any organization, who (A) has contracted with, or
has been directly authorized by, a Supplier or Aggregator to conduct marketing
or sales activities or to enroll customers on behalf of the Supplier or Aggregator;
or (B) has received compensation, in any form, from a Supplier or Aggregator for
any activities relating to the sales or marketing of the Supplier or Aggregator’s
electric generation services or the referral, enrollment or servicing of customers
on behalf of the Supplier or Aggregator;
(2)
“Customer” includes any person or entity with a monthly demand of less
than 50 kW, who currently or prospectively receives electric generation or
aggregation services;
Docket No. 10-06-24
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(3)
“Door-to-door” refers to a sales or promotional activity that is made at a
place other than the place of business of the seller, but does not include an
activity conducted or consummated entirely (A) by mail, telephone or other
electronic means, or (B) at a trade or business show, convention or exposition;
(4)
“DPUC” or “Department” means the Department of Public Utility Control or
its successor; and
(5)
“Marketing” means the publication, dissemination or distribution of
informational and advertising materials regarding a Supplier’s or Aggregator’s
services and products to the public by print, broadcast, electronic media, direct
mail or by telecommunication.
II.
TRAINING AND MONITORING
(a)
Suppliers and Aggregators shall ensure, and maintain documentation showing,
that their agents have had adequate training in the following areas:
(1)
Ethical sales practices, customers’ right to rescind and cancel contracts,
all applicable federal and Connecticut marketing and consumer protection laws,
and knowledge of all required enrollment documentation such as contracts,
receipt of transaction and Notice of Right to Cancel, and how to complete such
documents; and
(2)
The Supplier’s or Aggregator’s products and services, including but not
limited to: the Supplier’s or Aggregator’s rates, payment options, cancellation
and early termination policies and fees, standard terms and conditions of service,
toll-free customer service telephone number, and script or other marketing talking
points.
(b)
Suppliers and Aggregators are not required to obtain advance Department
review or approval of training materials or programs; however, such materials and
training records shall be made available to the Department upon request.
(c)
Each Supplier and Aggregator shall monitor the conduct of its agents using
appropriate methods to ensure accuracy, completeness, courtesy and compliance with
applicable rules. For each customer enrollment, a Supplier and Aggregator shall track
the method of enrollment (e.g., telephone, door-to-door, Internet, U.S. postal mail) and
the agent(s) involving in such enrollment. All such data and record shall be made
available to the Department upon request.
(d)
A Supplier shall be directly responsible for verification or confirmation of its
customers’ switching conducted pursuant to C.G.S. §16-245s. Each Supplier shall
maintain records of each customer’s consent or switching confirmation for at least three
years following the expiration of the contract. These documents shall be made
available to Department upon request.
(e)
If a Supplier or Aggregator detects a problem with an enrollment, the Supplier or
Aggregator shall contact the customer by phone, email or by letter explaining the issue
Docket No. 10-06-24
Page 41
and offer help with a resolution. Suppliers and Aggregators shall investigate customer
complaints concerning marketing or sales practices within ten business days of receipt
of the complaint, and shall maintain records of the internal process for handling
customer complaints and records of all customer complaints and their resolutions.
(f)
Each Supplier and Aggregator shall maintain records that include each customer
complaint, including resolution of each complaint, for a period of not less than three
years. Such records shall be made available to the Department upon request.
III.
REQUIREMENTS FOR PROMOTIONAL/MARKETING
CUSTOMER ENROLLMENTS
MATERIALS
AND
(a)
All promotional or marketing materials and customer enrollment documentation,
including, but not limited to, contracts, standard terms and conditions, notice of right to
cancel, and receipt of transactions, shall be in writing and shall clearly identify the
name, address, telephone number of the Supplier or Aggregator.
All such
documentations or materials shall be in the same language as that principally used in
the oral sales presentation or contract negotiation.
(b)
Requirements for all customer enrollments. For each customer enrollment,
whether it is conducted by U.S. mail, the Internet, door-to-door, at a trade or business
show, convention or exposition, or at the Supplier’s or Aggregator’s place of business,
the following written documentation must be provided to the customer, even if the
customer’s selection of a Supplier is confirmed in accordance with C.G.S. §16-245s.
For enrollment conducted in person, the required documents must be provided to the
customer at the time of the enrollment. For enrollment conducted by U.S. postal mail or
the internet, a blank, standard copy of each document must be provided to the customer
prior to the customer signing up for service, and a copy of each completed document
must be provided to the customer as soon as possible but no later than five days after
the completion of the service enrollment. For enrollment conducted by telephone, the
customer must be informed, orally, of the information contained in these documents and
subsequently be provided a copy of each completed document but no later than five
days after the completion of the service enrollment. For purposes of the documentation
required under this section, the “date of enrollment” shall be the date the customer signs
the contract or the date that the customer’s agreement is confirmed in accordance with
C.G.S. §16-245s.
(1)
Copy of contract or receipt of service enrollment. The customer must be
furnished with a receipt of the service enrollment or a copy of the executed
contract. Such receipt or contract must be written in 10-point or larger font, and
shall clearly provide, at minimum, the following information: (A) the term of the
contract or the period of the service (beginning and ending dates, if any); (B) the
price to be paid by the customer for each type of service; (C) all applicable fees
(e.g., cancellation or early termination fees); and (D) a bolded statement
describing the Supplier’s cancellation policy.
(2)
Standard terms and conditions. The customer must be furnished with the
Supplier’s or Aggregator’s standard terms and conditions, which must clearly
identify any amendments or modifications applicable specifically to the customer.
Docket No. 10-06-24
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The terms and condition must contain, at minimum: the Supplier’s or
Aggregator’s cancellation policy; early termination policy and fees or penalties, if
any; renewal terms or policy; complaint procedures and customer’s rights; the
Supplier’s or Aggregator’s customer service telephone number; and the
Department’s toll-free customer service telephone number.
IV.
SALES AND MARKETING PRACTICES
(a)
Prohibited Conduct. Suppliers and Aggregators are prohibited from:
(1)
Engaging in misleading or deceptive conduct, and shall be responsible for
any misleading, fraudulent deceptive or other unlawful marketing or sales
performed by its agents;
(2)
Making false or misleading representations or advertisements, including,
but not limited to: (A) misrepresenting the rates or savings offered by the Supplier
or Aggregator, by the EDCs or by any other Suppliers or Aggregators; (B)
advertising or disclosing the price of electricity in such a manner as to mislead a
reasonable person into believing that the electric generation services portion of
the bill will be the total bill amount for the delivery of electricity to the customer’s
location; (C) using bills, marketing or educational materials of another Supplier,
Aggregator, EDC, or government agency in any way that infers a relationship that
does not exist; (D) representing, or allowing an agent to represent, that any agent
of a Supplier or Aggregator is an employee or representative of an EDC or is
acting on behalf of an EDC;
(3)
Refusing to honor any valid notice of cancellation by a customer or failing,
within ten business days after the receipt of a cancellation notice, to: (A) refund
all payments, including any security deposits or advanced payments, made
under the contract or sale; (B) return any goods or property traded in, in
substantially as good condition as when received by the Supplier or Aggregator;
or (C) cancel and return any negotiable instrument executed by the customer in
connection with the contract or sale and take any action necessary or appropriate
to terminate promptly any security interest created in the transaction; and
(4)
Making any material changes to any executed contract or agreed terms of
service without providing the customer at least 30-day prior written notice. A
contract may be automatically renewed if: (A) such automatic renewal provision
is clearly stated in the original contract; (B) the Supplier or Aggregator informs
the customer of the renewal, in writing, at least 30 days prior to the renewal date
and gives the customer, in such written notice, at least 45 days to decline the
renewal offer; and (C) no fee or penalty is imposed if the customer terminates the
contract or declines the renewal within such 45-day period. Nothing in these
Guidelines precludes month-to-month contracts with termination effected only
upon notice by either party.
Docket No. 10-06-24
(b)
Page 43
Required Conduct. Suppliers and Aggregators shall:
(1)
Provide accurate and timely information, verbally or written, about services
and products being offered, including information about the rates, contract terms,
early termination fees and right of cancellation and rescission in plain language
that is designed to be understood by the customer;
(2)
Clearly indicate that taking service from the Supplier will not affect the
customer’s distribution or transmission service and such services will continue to
be provided by the EDCs;
(3)
When the Supplier’s or Aggregator’s trade name is similar to that of an
EDC, inform customers that the Supplier or Aggregator is not the same company
as the EDC, that its prices are not regulated by the Department, and that the
customer is not required to buy its supply or other products to receive the same
quality service from the EDC;
(4)
Comply with the federal “Do Not Call” law and the Telemarketing and
Consumer Fraud and Abuse Prevention Act, 15 U.S.C. §6101, et seq., as well as
the Telemarketing Sales Rule, 16 CFR Part 310.
(c)
Telephone Sales/Marketing. Any agent of a Supplier or Aggregator who contacts
customers by telephone for the purpose of selling any product or service offered by the
Supplier or Aggregator shall:
(1)
Immediately provide the agent’s name and the name of the Supplier or
Aggregator on whose behalf the call is being made and the purpose of the call;
(2)
Where it is apparent that the customer’s English language skills are
insufficient to allow the customer to understand and respond to the information
conveyed by the agent or where the customer or another third-party informs the
agent of this circumstance, the agent shall immediately transfer the customer to a
representative who speaks the customer’s language, if such a representative is
available, or terminate the call; and
(3)
Cease from calling or making any further contact with any customers who
request not to be called or contacted again.
(d)
Door-to-door Sales/Marketing.
(1)
Background Check. Each Supplier or Aggregator shall conduct, on all
existing and potential door-to-door marketing or sales agents, comprehensive
criminal background checks and drugs screenings necessary to determine if
such agents present a possible threat to the health and safety of the public. This
includes checking the sex offender registry commonly referred to as the
Connecticut Sex Offender Registry maintained by the Connecticut State Police.
Suppliers and Aggregators shall exercise good judgment in developing standards
and qualifications and shall not hire an individual that fails to meet these
standards.
Docket No. 10-06-24
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(2)
ID Badges/Uniforms. Each agent shall identify himself or herself by
immediately stating his or her full name and wearing a photo ID badge in a
prominent location. The ID badge must show, in reasonably sized font or type:
the full name of the agent, the name and logo of the Supplier or Aggregator, and
the name of the agent’s employer, if different than the Supplier or Aggregator.
The agent is also required to immediately provide a business card or other
material that states the agent’s identity and the Supplier or Aggregator name and
contact information. The agent’s name does not need to be pre-printed on sales
or marketing materials. However, when an agent’s name is handwritten on such
materials, it shall be printed and legible. The ID shall be visible at all times. The
agent shall not dress in uniforms or wear any apparel that contain any branding
elements (including logo) that are deceptively similar to that of the EDCs.
(3)
Ceasing further contact. The agent shall immediately leave a customer’s
premises when requested to do so by the customer or the owner or an occupant
of the premises. Suppliers and Aggregators shall respect any individual’s
request to be exempted from further door-to-door marketing or sales contacts
and should annotate any existing marketing or sales databases to reflect this
request.
(4)
Hours and Ordinances. When soliciting residential customers, Suppliers
and Aggregators shall limit door-to-door marketing or sales activity to the hours
between 10:00 a.m. and 6:00 p.m. There are no time restrictions for any other
classes of customers. Notwithstanding the requirements of this subdivision,
Suppliers and Aggregators shall comply with local ordinances and with the
federal cooling off period requirements under the Rule Concerning Cooling-Off
Period for Sales Made at Homes or at Certain Other Locations; 16 CFR 429.0 et
seq.
DOCKET NO. 10-06-24
DPUC REVIEW OF THE CURRENT STATUS OF THE
COMPETITIVE SUPPLIER AND AGGREGATOR MARKET
IN CONNECTICUT AND MARKETING PRACTICES AND
CONDUCT OF PARTICIPANTS IN THAT MARKET
This Decision is adopted by the following Commissioners:
Anna M. Ficeto
Kevin M. DelGobbo
John W. Betkoski, III
CERTIFICATE OF SERVICE
The foregoing is a true and correct copy of the Decision issued by the
Department of Public Utility Control, State of Connecticut, and was forwarded by
Certified Mail to all parties of record in this proceeding on the date indicated.
March 16, 2011
Kimberley J. Santopietro
Executive Secretary
Department of Public Utility Control
Date