Corrected Illinois Proposed Order on Consumer Protection Rules Includes Extended Termination Fee Waiver Period

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March 21, 2011  

An Illinois ALJ has issued what is being billed as a "corrected" Proposed First Notice Order regarding electric consumer protection standards in the Part 412 rulemaking, this time with attached language for the rules, which would re-institute the proposed extended no-cancellation-fee period for residential and small commercial customers.

As only noted in Matters (2/21), a Proposed First Notice Order was originally issued in February, but without any proposed rule language, which made the filing of exceptions by stakeholders impossible. The exceptions deadline was tolled until a revised proposed order with attached proposed rule language was issued.

Although the "corrected" proposed first notice order largely tracks the February proposal, one major difference is that the language attached to the "corrected" proposed order would allow residential and small commercial customers to terminate contracts without incurring any cancellation fee for a period lasting up to 10 business days after the date of the first bill issued to the customer.

The February proposed order would have rejected this extended no-termination-fee period, and the "corrected" proposed first notice order, in discussing that section of the rule, also states that customers should not be given this extended no-termination-fee period. However, the recommended rule language is unambiguous that, "[a]ny contract that contains an early termination fee shall provide the customer the opportunity to contact the RES [retail electric supplier] to terminate the contract without any termination fee or penalty within 10 business days after the date of the first bill issued to the customer for products or services provided by the RES one time per 12-month period."

Regarding the rescission period, the corrected proposed order's attached rule language provides that, "[t]he written enrollment notice from the electric utility [to the customer] shall state the last day for making a request to rescind the enrollment, and provide contact information for the RES."

The language further provides that, "[i]f a residential customer wishes to rescind the pending enrollment with the RES, the customer will not incur any early termination fees if the customer contacts either the electric utility or the RES within ten calendar days after the electric utility processes the enrollment request. If a small commercial customer wishes to rescind the pending enrollment with the RES, the customer will not incur any early termination fees if the customer contacts the RES within ten calendar days after the electric utility processes the enrollment request."

In other words, this language reflects that only residential customers may rescind an enrollment by calling the utility, and non-residential customers must contact the retail supplier.

However, in the attached language regarding the Uniform Disclosure Statement, the proposed rules provide that the disclosure shall include, "[a] statement that the customer may rescind the contract or cancel the pending enrollment within ten calendar days after the electric utility processes the enrollment request by contacting either the RES or the electric utility and provide both phone numbers."

The Uniform Disclosure Statement shall be sent to both residential and small commercial customers. Accordingly, the uniform disclosure statement provides that small commercial customers may rescind an enrollment by calling the utility, though such ability is not provided in the section of the rule regarding the rescission period.

The corrected proposed order's attached language provides that, for outbound telesales, the Uniform Disclosure Statement and sales contract must be provided to the customer within seven business days after the electric utility's confirmation of an accepted enrollment. The corrected proposed order states that, "the rescission period shall not toll until the consumer has received written disclosure of the terms."

The proposed language would require retail suppliers to provide the average rate for delivery charges. Specifically, the proposed language provides that if a product is being offered at a fixed per kilowatt-hour rate that does not change for the duration of the term, "the RES shall provide the total average price for electric supply and delivery service reflecting all recurring charges, excluding state and local sales taxes."

If a product is being offered at a variable rate, "the RES shall provide sample total average prices for electric supply and delivery service for the first month of delivery, reflecting all recurring charges, excluding state and local sales taxes."

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