Final Order Requires Retail Suppliers To Record Entirety Of Telemarketing Calls; Use Standard Intro Script

Regulator To Examine New Requirement For Default Service Rate To Be Listed On Retail Supplier Contract Summary Form

May Link Potential Requirement For Recording Entirety Of Door-to-Door Marketing To Supplier's Election To Use "Enhanced" TPV (Interactive Discussion)

Regulator Still Investigating Potential Limit On Service To Low-Income Customers, Auto-Renewal Limits

May 26, 2020

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Copyright 2010-20 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The Massachusetts DPU issued an order on Tier I issues in its retail electricity and natural gas retail market review

The rules adopted in the order apply to electric and gas competitive suppliers, electricity brokers, and gas retail agents, and to residential and small commercial and industrial ("C&I") consumers, unless otherwise noted.

Disclosure of Product Information, Contract Summary Form

The DPU adopted a new standard contract summary form.

While most of the information is similar to requirements in other markets and was not contested, several notable issues were addressed.

In particular, consumer advocates had recommended that the Contract Summary Form include information related to basic service prices (default service)

While the DPU said that it "sees merit" in this recommendation, the DPU said, "the Department concludes that more discussion is required regarding how the inclusion of basic service prices on the Contract Summary Form should be implemented, particularly with respect to the manner and form in which it will be presented to consumers."

"Through the D.P.U. 19-07 stakeholder process, the Department will work with stakeholders to gain a better understanding of how to best present basic service prices on the Contract Summary Form," the DPU said

The adopted Summary Form will include language directing customers to the state's energy shopping website for default service rate information, and, for electricity, competing offers. Specifically, the following language will appear on the form: "The Massachusetts Department of Public Utilities recommends that consumers visit the Energy Switch website to view the broad range of available electric supply products, including basic service offered by your electric utility. You can visit the website at http://energyswitchma.gov"

The adopted Contract Summary Form will also inform customers of the rescission period, which a Staff proposal did not do

The Department directed competitive suppliers to include a category on the Contract Summary Form titled Rescission Period and to use the following language: "You have 3 days to cancel this contract free of charge from the time you receive your contract and terms and conditions."

The DPU said that more discussion is needed concerning the presentation of renewable energy content (voluntary and required) on the Contract Summary Form.

For the time being, the DPU adopted Staff's language, including the following for products exceeding the minimum RPS: "The Commonwealth of Massachusetts requires that all electric supply products include a minimum of [mandatory minimum RPS compliance percentage]% renewable energy resources. This product includes [xx]% renewable energy resources, an amount that exceeds the minimum requirement."

The DPU said, "Through the D.P.U. 19-07 stakeholder process, the Department will work with stakeholders to explore ways to optimize the usefulness and consistency of the information provided to consumers regarding renewable energy content, both through the Contract Summary Form and the Website."

The new Contract Summary Form can be found here

The new Contract Summary Form requirement will be effective September 8, 2020.

Marketing Scripts

The DPU-adopted language shall be used at the start of a telemarketing call or door-to-door visit.

The DPU accepted the following language:

Telesale:

"My name is [first name of telemarketing agent] and I work for [name of telemarketing vendor company]. I am calling on behalf of [name of competitive supplier], a licensed [electric/gas] supplier. [Name of competitive suppliers] is not affiliated with the local [electric/gas] utility or any city or town energy program."

Door-to-door

"My name is [first name of door-to-door marketing agent] and I work for [name of door-to-door marketing vendor company]. I am speaking with you on behalf of [name of competitive supplier], a licensed [electric/gas] supplier. [Name of competitive suppliers] is not affiliated with the local [electric/ gas] utility or any city or town energy program."

Note that the introductory script does not permit the agent to name the customer's specific utility by name; the agent may only say "the local electric/gas utility."

While the DPU will not prohibit outright the naming of the local utility during the remainder of the sales presentation, "the Department emphasizes that such identification must be done in the spirit of providing consumers with useful and accurate information and not to suggest or imply that the marketing vendor or competitive supply company is or has a connection to the distribution company."

These requirements will take effect on August 3, 2020.

Recording of Marketing Interactions

Effective August 3, 2020, suppliers shall record the entirety of all outgoing telemarketing calls conducted on their behalf (i.e., calls not initiated by a consumer) and retain all calls for which the duration exceeds one minute. This requirement applies equally to telemarketing calls that do and do not result in a customer enrollment. The Department directed competitive suppliers to retain their recordings for a minimum of two years

The Department will not require competitive suppliers to record their door-to-door marketing interactions at this time.

The Department noted that it intends to investigate the implementation of an enhanced third-party verification process (as previously detailed here) as a Tier Two initiative in the proceeding.

"As part of that investigation, the Department intends to explore the reasonableness of linking the mandatory recording of a competitive supplier's door-to-door marketing interactions with the competitive supplier's willingness to implement an enhanced third-party verification process," the DPU said

Door-To-Door Marketing Notification

The DPU has revised the required door-to-door marketing notification such that competitive suppliers shall now provide to the DPU separate door-to-door marketing notifications for each marketing day (a daily notification requirement), with two business days advance notice.

Currently, once a door-to-door notice is filed, it may be used for 30 days.

Furthermore, the DPU will limit each door-to-door marketing notification to identifying five municipalities in each notification. For Boston, suppliers must specify the neighborhoods within Boston where they expect to market, and each individual neighborhood will count toward the five-municipality limit. The five municipality limit is higher than the three municipality limit proposed by Staff, but less than the 15 municipality limit proposed by retail suppliers

While the DPU will initially only require specific neighborhoods to be identified for Boston notices, the DPU said that it will work with stakeholders to determine whether and how to adopt a neighborhood requirement for other municipalities.

Additionally, the Department will explore how zip codes, rather than neighborhoods, could be used to provide greater geographic specificity for these municipalities

Concerning the municipality limit per notice, some stakeholders suggested that the limit be applied per vendor (rather than per supplier) and that the limit apply only on a regional basis

In response the DPU said. "we conclude that more discussion is required to better understand the pros and cons of these approaches. Through the D.P.U. 19-07 stakeholder process, the Department will work with stakeholders to gain a better understanding of how the approaches may be incorporated into the door-to-door marketing notification requirements."

The DPU will require suppliers to provide the door-to-door notices to the Attorney General, if the Attorney General executes a non-disclosure agreement with the competitive supplier

Concerning the provision of the door-to-door notices to municipal aggregation communities, the DPU said that, "The Department sees merit in the Municipal Aggregation Communities' recommendation that the Department require competitive suppliers to provide notification, on a confidential basis, to designated officials of the municipalities in which competitive suppliers expect to engage in door-to-door marketing -- such notification would allow municipalities to provide enhanced consumer awareness and protection to their residents in ways that supplement the public safety protection provided by municipal permits for door-to-door marketing."

"However, the Department concludes that more discussion is required to establish the process by which such a requirement would be implemented. Through the D.P.U. 19-07 stakeholder process, the Department will work with stakeholders to gain a better understanding of the information that municipal officials would seek to receive from competitive suppliers, and the confidential treatment that should apply to that information," the DPU said

The DPU will not require suppliers to provide the door-to-door notices to the Electric Distribution Companies, who had requested the info so the EDC could be responsive to any complaints to their call centers about door-to-door marketing

The DPU said that, "the Department appreciates the interest of the distribution companies in providing assistance to their customers in response to customer complaints, the most useful step the distribution companies can take to assist their customers in such instances is to provide direction on how customers can file a complaint with the Department's Consumer Division."

The DPU ordered that the new door-to-door notification requirements shall take effect August 3, 2020

The DPU stressed that such compliance date does not override any governor's order nor the DPU's prior "request" that suppliers cease door-to-door marketing during the pandemic state of emergency.

Identification of Third-Party Marketing Vendors

The DPU will require competitive suppliers to provide to the DPU the following information for each of its vendors: (1) legal name of vendor and the name(s) under which the vendor does business; (2) business address; (3) name of vendor owner; (4) state in which the vendor is incorporated; (5) vendor's federal tax identification number; (6) location of vendor's office in Massachusetts; (7) dates on which vendor began and ended marketing for competitive supplier in Massachusetts; and (8) confirmation that the competitive supplier (or the vendor) has followed the background check and standards of conduct requirements set forth in D.P. U. 14-140-G, Attachment 1, Items 6 and 7.

The Department directed that competitive suppliers shall submit an updated list of their third-party marketing vendors within ten business days of the addition or removal of a third-party vendor.

The Department directed competitive suppliers to submit their vendor lists no later than August 3, 2020.

The DPU denied the Electric Distribution Companies' recommendation that the Department require competitive suppliers to submit their updated lists of vendors to distribution companies

Review of Marketing Materials

The DPU will require that all direct mail marketing material be reviewed by the DPU and subject to DPU approval

If the Department does not respond within ten business days, the competitive supplier may use the direct mail marketing material as submitted.

The DPU offered guidance on acceptable direct mail materials

"[T]he Department clarifies that it will not approve direct mail marketing that contains language that could lead consumers to believe that (1) they are receiving an official communication from the state, their distribution company, or their municipality; (2) unless they take quick action, their electric or gas service might be interrupted; or (3) the competitive supplier is working in conjunction with a municipal aggregation program. In addition, the Department will not approve material that does not clearly (1) identify the name of competitive supplier and (2) disclose that the material is an advertisement for the sale of a product," the DPU said

These prohibitions apply to the envelope as well as the included materials

The requirements set forth above apply to direct mail marketing material that competitive suppliers will send to consumers on or after September 8, 2020.

The DPU said that it sees merit in providing the Attorney General with access to competitive suppliers' direct mail marketing material. "Through the D.P.U. 19-07 stakeholders process, the Department will work with stakeholders to develop such a process," the DPU said

Only direct mail marketing materials will be required to be reviewed by the DPU. The Department disagreed with the consumer advocates' recommendation that the Department require competitive suppliers to submit all marketing materials for Department review

"Based on our experience in reviewing direct mail marketing materials, the Department will consider extending our review to the other forms of marketing," the DPU said

Automatic Renewals

The DPU will address the issue of potential automatic renewal product limitations as a Tier Two initiative in the proceeding

"As part of that investigation, the Department expects to explore the reasonableness of linking the frequency of a competitive supplier's automatic renewal reporting requirement [noted below] to its willingness to adopt voluntary product limitations for automatically renewed customers," the DPU said

The Department ordered competitive suppliers to send an automatic renewal notification to customers between 30 and 60 days prior to the expiration of their contracts.

The format for the auto-renewal notifications is shown in Attachment F here.

These requirements apply to customers whose contracts expire on or after September 8, 2020.

The DPU also ordered suppliers to submit reports on automatic renewals

Initial reports are due on August 3, 2020. The initial reports will be limited to (1) the total number of customers that a competitive supplier is serving as of June 30, 2020, and (2) the number of customers that a competitive supplier is serving on June 30, 2020 through the automatic renewal provisions included in the customers' contracts.

The Department adopted a semi-annual reporting requirement for subsequent automatic renewal reports. The Department requires competitive suppliers to submit their next automatic renewal reports on February 1, 2021.

For these subsequent reports, the information to be reported will have three components. First, competitive suppliers will report on (1) the total number of customers that a competitive supplier is serving as of December 30, 2020, and (2) the number of customers that a competitive supplier is serving on December 30, 2020 through the automatic renewal provisions included in the customers' contracts. Second, competitive suppliers will report on the following information for the period July 1, 2020 through December 30, 2020: (1) the number of residential contracts that expired during that period; (2) the number of such contracts that included an automatic renewal provision to either a fixed-price or monthly-price product; and (3) the number of contracts for which the automatic provision took effect. Third, competitive suppliers will report on the method used to deliver the automatic renewal notification to their customers during the specified period.

Enrollment Reports

The DPU adopted reporting requirements concerning enrollments

Competitive suppliers will be required to submit their initial reports by August 3, 2020. For this initial report, the information to be reported will be limited to the total number of residential and residential low-income customers that a competitive supplier is serving in each electric and gas distribution company service territory (as applicable) as of June 30, 2020

The Department adopted a semi-annual reporting requirement for subsequent enrollment reports

The Department will require competitive suppliers to submit their next enrollment report on February 1, 2021.

The information to be reported in the subsequent reports will have two components. First, competitive suppliers will report on the number of residential and residential low-income customers that they are serving in each electric and gas distribution company service territory (as applicable) as of December 30, 2020. Second, competitive suppliers will report on the number of residential and residential low-income customers that they enrolled in each electric and gas distribution company service territory (as applicable) during the period July 1, 2020 through December 30, 2020, and the marketing channels through which the customers were enrolled

The DPU did not adopt product limits for low-income customers at this time, but said that it will further study the issue

"As a final matter, the Department intends to investigate product limitations for residential low-income customers as a Tier Two initiative in this proceeding. As part of that investigation, the Department expects to explore the reasonableness of linking the frequency of a competitive supplier's enrollment reporting requirement to its willingness to adopt voluntary product limitations for residential low-income customers," the DPU said

Municipal Aggregation Prices On Energy Switch Website

The DPU ordered that municipal aggregation prices shall be listed on the state's Energy Switch website

The website will list a municipal aggregation's "default product" directly below basic service, both in the initial listing of product and after product sorting and filtering. All other municipal aggregation products will be listed in the same manner as competitive supply products.

With respect to other aspects of the website, the DPU said, "Through the D.P.U. 19-07 working group process, the Department will work with stakeholders to improve the manner in which the Website displays information about supply products' voluntary renewable energy content. Consistent with comments received in this proceeding, the Department will explore, among other things (1) the display of information regarding the voluntary renewable energy content of renewable energy products and (2) the elimination of a minimum content in order for the Website to display such information."

Other Tier Two Issues

The DPU said that it will continue to investigate the Tier Two initiatives associated with (1) an enhanced third-party verification process, (2) an "enroll with your wallet" process, and (3) product limitations related to automatic renewal and low-income customers.

Docket 19-07

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