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N.Y. AG: ESCO Consumer Bill of Rights Should Reference Power to Choose

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October 27, 2010

The New York ESCO Consumer Bill of Rights (10/1) should refer customers to information about their alternatives for energy services supplied by the PSC on the New York Power to Choose website, the New York Attorney General said in comments to the PSC.

"Consumers who receive unanticipated solicitations at their door or by telephone are often inadequately prepared to assess on the spot the merits of the ESCO's offer. By informing prospective customers of this source for comparing available providers' terms and prices, consumers can make better-informed decisions, thus maximizing the benefits from competition," the AG said.

"To be most effective, the Bill of Rights should help consumers better understand what is involved in this relatively new retail market for electricity and natural gas service. The document should be neutral: neither promoting ESCOs over relying on regulated utilities for commodity service, nor discouraging such consumer choices," the AG added.

The AG also offered the following recommendations on when the Bill of Rights should be provided to the customer, especially for sales not conducted in person.

a. For telephonic sales, the Bill of Rights should be included with the first piece of correspondence an ESCO sends the customer, so that it can be reviewed by the prospective customer before the 3-day cancellation period expires.

b. For door-to-door sales or other sales presentations conducted in person (including those by appointment), the Bill of Rights should be handed to the prospective customer before he or she is asked to sign a contract with the ESCO.

c. For sales made via the Internet, the Bill of Rights should be presented as a non-avoidable screen, with clear and conspicuous text, prior to effecting a customer's enrollment. Prospective customers should be required to affirmatively click a button on the screen displaying the Bill of Rights, verifying that they have seen the document, before progressing to the next step in the online enrollment. The AG further said that the Bill of Rights screen should have a button that the consumer can click on to print out a hard copy of the Bill of Rights.

The AG noted that GBL § 349-d.2 requires that ESCO marketers "properly identify" themselves and requires that the ESCO, "explain that he or she does not represent a distribution utility," and "explain the purpose of the solicitation" as well as deliver the Bill of Rights and other marketing materials in the language used for soliciting the consumer. However, such statements are not reinforced in the Bill of Rights. "As GBL § 349-d.4 directs the PSC to 'summarize the protections' of this law in the Bill of Rights, these requirements should be included in the document," the AG said.

The Bill of Rights should also include the PSC's Consumer Services Division telephone number, address, and website for filing complaints, the AG added. "Should some ESCO marketers fail to adhere to the provisions of GBL § 349-d (e.g., by using high pressure sales tactics or other deceptive business practices), such complaints by consumers will enable the PSC to more effectively police market participants," the AG said.

"To be most effective, the Bill of Rights should employ plain language that most consumers will be able to understand without difficulty . The proposed Bill of Rights is written at the 14.3 grade level (junior year of college) on the Flesch-Kincaid readability scale, which is unlikely to be readily understood by the average consumer whose reading skills are much lower. The draft should be revised to greatly simplify the language used," the AG added.

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