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Written Order Emphasizes "Reasonable" Requirement for ESCO Fixed Offers to Low-Income Customers, Provides Granular TPV Requirements

February 6, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The New York PSC has issued a written rehearing order concerning the provision of ESCO service to low-income customers participating in utility administered low income discount programs and the Home Energy Assistance Program (HEAP), and which also provides granular details regarding new third-party verification requirements.

As previously reported, for an ESCO to serve a low-income assistance program customer, the ESCO, "must guarantee that the customer will pay no more, on an annual basis, than the customer would have paid as a full service customer of the utility, or the ESCO must provide Assistance Program Participants with energy-related value-added products or services."

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If an assistance program participant is only a customer of an ESCO for less than a full year, e.g., six months, the ESCO must guarantee that the customer will pay no more than he or she would have paid as a full service utility customer for the period in which the ESCO provided the customer’s electricity and/or gas.

The PSC also affirmed that an ESCO may comply with the provision that the low-income assistance program customer pay no more versus default service through the issuance of credits at the end of the customer's term.

Regarding "energy-related value-added products or services," this will be defined to include certain fixed price offers, as the PSC's written order states that, "all customers should have the opportunity to obtain energy at a reasonable fixed rate, which could assist customers in managing their energy bill."

"However, this alternative must be structured so as to ensure that Assistance Program Participants have access to these products in manner that does not dilute the effectiveness of the financial assistance programs," the PSC said.

As reported last week, PSC Staff will convene a collaborative to define the energy-related value-added products and services that must be provided to Assistance Program Participants to qualify for exemption from the price guarantee.

Regarding TPVs, the PSC affirmed that the independent TPV requirement shall apply to all enrollments achieved through telemarketing calls, regardless of whether the call is initiated by the ESCO or the customer. "[T]he independent TPV requirements apply to all enrollments achieved through door-to-door or telephonic marketing, whether or not the particular marketer asserts that he or she is a 'network' marketer," the PSC said.

Furthermore, in cases where, for example, a door-to-door marketing agent enrolls a customer using a mobile electronic device, the ESCO must comply with the independent TPV requirements.

The TPV requirements will not apply to ESCO enrollments conducted in public settings -- trade shows, mall kiosks, sporting events, etc.

The PSC said that warm transfers by a telemarketer to an independent TPV, in which the verifier conducts the TPV without the marketing agent on the line, is permissible. However, the PSC said that a door-to-door marketing agent may not initiate the independent TPV. In both situations, the TPV must be conducted without the ESCO marketing representative’s presence, either on the telephone or in person.

The PSC will allow an interactive voice response system to be used for the TPV, but said that ESCOs who employ IVR to conduct verifications must ensure the validity of the IVR script through capturing in it all of the required information, in an auditable format, along with the customer’s voice

The PSC ruled that a TPV is not required if the ESCO is only obtaining the customer's data, and is not enrolling the customer (written or verbally recorded authorization for such data access will suffice).

The PSC adopted the following revised questions to be required under TPVs

1. Do you understand that this conversation is recorded and that oral acceptance of the [ESCO name]’s offer is an agreement to initiate service and begin enrollment?

2. Is it [specific date] at [specific time]?

3. Do you understand that the marketing representative represents [specific ESCO] and that [specific ESCO] is not the distribution utility?

4. If the sale was conducted through door-to-door marketing, has the marketer left the premises?

5. Are you [specify customer’s name]/Please state your name (or is your company name [specify company name]/Please state your company’s name)?

6. Do you live at [specific address]/Please state your address (or is your company located at [specify company address]/Please state your company’s address)?

7. Is your email address [specific e-mail address]/Please provide your email address (if the customer chose to provide it)?

8. Is your distribution utility account number [specify account number]/Please state your distribution utility account number?

9. Are you the primary account holder or do you have authority to make changes to this account?

10. Are you a recipient of a Home Energy Assistance Program (HEAP) benefit or an income-based discount on your utility bill?

11. If the sale was conducted through door-to-door marketing: did the ESCO marketing representative provide you with the sales agreement, his/her business card or contact information and leave a copy of the ESCO Consumer Bill of Rights?

12. If the sale was conducted through telemarketing: did the ESCO marketing representative offer to mail you a copy of the ESCO Consumer Bill of Rights or did the ESCO marketing representative tell you how to find the ESCO Consumer Bill of Rights online?

13. Did you agree to the terms of service as reviewed with you by the [ESCO name] representative on [INSERT ENROLLMENT DATE]?

       a. The price of ___ (electricity and/or natural gas) under the contract is ___for __ months (years).

       b. Or the price of ___ (electricity and/or natural gas) under the contract is a variable rate and will vary month-to-month.

       c. The early termination fee (if any) is __ (this may be a methodology instead of a dollar amount).

14. If savings is guaranteed (compared to the utility rate), a plain description of the type of savings and the conditions that must be present in order for the customer to be eligible for savings. If savings is not guaranteed (as compared to the utility supply service) a statement indicating such;

15. Please be advised that energy supply will be provided by the ESCO, and that energy delivery shall continue to be provided by your utility and the utility will also be available to respond to leaks or other emergencies should they occur;

16. Do you authorize the release of the following information from your distribution utility: [specify information] and do you understand that you may rescind this authorization at any time by calling [specify toll free number] or e-mailing [specify e-mail address]?

17. For residential enrollments only: Do you understand that you may rescind the agreement within three business days after its receipt by [describe how such rescission can be accomplished] and if you do not rescind the agreement, an enforceable agreement will be created?

The PSC said that ESCOs, and the independent TPV vendors employed by them, are, "allowed some flexibility regarding the language in the TPV script; however, the information sought in each question must be collected if the independent TPV is to be valid."

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