Conn. DPUC Says Rejection of Third-Party Contract Cancellations May Violate Billing Standards

June 1, 2011
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An automatic determination under which third party cancellations or attempted cancellations of retail electric contracts or enrollments are invalid (and thus rejected by the supplier), "may conflict with the billing and metering protocols" set forth in Conn. Gen. Stat. Sec. 16-244i(c), the DPUC said.

Under the adopted protocols, "[w]hen a Customer changes Supplier, it is only necessary for the new Supplier to send an Enrollment transaction; if successful, a Successful Enrollment transaction is returned to the new Supplier and a Customer Drops Supplier transaction is sent to the old Supplier. The Customer does not need to be concerned about dropping the old Supplier. That activity will be done automatically."

The DPUC was specifically responding to a clause used by ResCom Energy LLC through at least one sales channel. The DPUC quoted this clause as stating:

"For your [the customer's] protection, to prevent slamming or unauthorized switching of your service, no third party may cancel this agreement on your behalf. Third party cancellations or attempted cancellations will automatically be considered invalid and rejected unless we receive notification directly from you in writing or via email ..."

Similar clauses, couched as "anti-slamming provisions," are not uncommon in retail contracts.

"To the extent that the ResCom clause invalidates or rejects attempted cancellations, the clause may contravene the billing and metering protocols," the DPUC said (emphasis added).

The DPUC's statement obviously raises the question of whether a distinction is made between canceling a contract, and canceling an enrollment (or, more likely, executing a enrollment with another supplier thereby resulting a drop). Conn. Gen. Stat. Sec. 16-244i(c) appears limited to dealing with the latter, in that customers are not required to inform their old supplier of a drop. The DPUC's language, however, indicates that the Department may be expanding this language to include no-notice contract cancellations as well.

While the ResCom contract states that a third party may not cancel the agreement, nothing in it suggests that ResCom is using the clause to contest drops, or automatically re-enroll customers, nor does the DPUC indicate any such activity has occurred.

The DPUC requested that ResCom respond to several questions regarding the clause, and also directed the utilities to answer several questions. The DPUC specifically asked the utilities whether they are aware of other suppliers that may have introduced similar clauses which automatically reject certain cancellations.

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