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Calpine and Direct Energy Win Again, Continue to Provide Renewable Energy in Virginia

The Virginia State Corporation Commission (the “Commission”) denied Dominion Energy Virginia’s (“Dominion”) July 16, 2019 petitions for declaratory judgment in Case Numbers PUR-2019-00117 and PUR-2019-00118 by Final Order on September 18, 2019. Dominion’s petitions sought to have the Commission standardize “around the clock,” “control of renewable capacity” requirements for competitive service providers (“CSPs”) to serve customers under Virginia Code § 56-577 A 5 (“Section A 5”). That section provides a statutory right to customers of all classes to purchase “electric energy provided 100 percent from renewable energy” from a CSP unless the utility has its own 100% renewable energy tariff. Dominion’s application for a 100% renewable energy tariff is pending before the Commission, and Dominion had refused to process enrollments submitted by Calpine Energy Solutions, LLC (“Calpine”) and Direct Energy Business, LLC (“Direct Energy”) under Section A 5 in the interim and initiated these cases at the Commission.

The Commission previously granted Calpine’s and Direct Energy’s requests for injunctive relief, requiring Dominion to process enrollments while these cases are pending. We blogged about that here.

Dominion’s petitions took aim at Calpine and Direct Energy, seeking a determination that CSPs seeking to serve under Section A 5 must establish that they can supply customers with electric energy provided 100 percent from renewable energy on an “around the clock” basis and that the CSPs must have “control” over “renewable capacity.” The Commission flatly rejected Dominion’s positions and declared that both Calpine and Direct Energy provided information to reasonably establish that they have contracted for sufficient renewable energy to match renewable supply with a participating customer’s load on a monthly basis, which is consistent with Section A 5 and Commission precedent.

Regarding Commission precedent, the Commission refused to adopt Dominion’s interpretation of a prior order approving Appalachian Power Company’s Rider WWS (“Rider WWS Order”), which Dominion believes requires a CSP to have “control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve.” The Commission’s refused to provide the requested declaration, explaining that the Rider WWS Order did not require “’renewable capacity,’ nor did it define ‘full load requirements’ to mean (as argued by Dominion) ‘full load at all times’ or ‘full load requirements around the clock.’” Significantly, the Commission’s Final Order makes clear: “Nothing in [the Rider WWS Order], however, found that [Appalachian Power Company’s] proposal was the only way to comply with Section A 5.”

The crux of the Commission’s decision relied upon its close reading of Section A 5. “The plain language of Section A 5 also says ‘energy,’ not ‘capacity.’” In acknowledging this critical distinction, the Commission put a finer point on Dominion’s efforts to muddy the waters between “energy” and “capacity” requirements, despite the fact that Section A 5 requires customers to purchase renewable electric “energy” – not “capacity.” In the same way, the Commission examined closely Dominion’s request for more stringent matching standards, noting several times that in other proceedings, Dominion has taken positions inconsistent with those it takes in its petitions for declaratory judgment: “There is nothing in the plain language of Section A 5, however, that mandates Dominion’s “100% of the time” (i.e., “around the clock”) requirement.”

The Commission also scrutinized Dominion’s proposal from a consumer protection perspective, finding that Dominion’s “100% of the time” standard would adversely affect a customer’s right to purchase renewable energy – essentially, upending the entire aim of Section A 5. Dominion’s argument would read certain renewable generating sources (e.g., wind or solar) out of the statute because of their intermittency regardless of the amount of nameplate capacity or peak load served. Finally, the Commission evaluated Dominion’s proposed standard with special focus on the fact that Virginia’s existing monthly matching standard is already one of the most stringent in the country for states with renewable energy markets, as other states generally require customer load and renewable supply to be matched on a yearly basis.

The Commission declined to accept Dominion’s proposed language that would adopt a new standard for Section A 5, presented for the first time at the hearing on August 20, 2019. The Commission reasoned that to do so would contravene the Commission’s past rejection of “capacity,” “peak demand,” or “100% of the time” requirements – including the Commission’s rejection of Dominion’s past requests (notably in the Rider WWS proceeding) for “around the clock” supply of renewable energy pursuant to Section A 5. Similarly, the Commission held that Dominion’s proposal at the hearing regarding what Dominion believes the current law should reflect “improperly goes beyond the specific relief requested in the Petitions for Declaratory Judgment… [and] does not reflect current Commission precedent and is otherwise procedurally improper.”

The Conclusion in the Commission’s Final Order makes clear that:

  • Commission precedent permits a CSP to match customer load with renewable supply on a monthly basis and does not requires CSPs to provide “renewable capacity”;
  • Direct Energy and Calpine have satisfactorily demonstrated that they can supply their customers with electric energy provided 100 percent from renewable energy on a monthly matching basis;
  • Direct Energy and Calpine are required to continue providing information as directed in the Final Order – regarding each CSP’s customer load and wholesale generation contracts, in accordance with Section A 5, the Commission’s Rules Governing Retail Access to Competitive Energy Services, as well as Dominion’s Competitive Service Provider Coordination Tariff; and
  • Even if Dominion’s new proposal were procedurally appropriate, which it is not, the Commission further finds that: (1) the plain language of Section A 5 does not mandate – as a matter of law – adoption of Dominion’s proffered standard; and (2) matching customer load with renewable supply on a monthly basis represents a reasonable standard under Section A 5, and Dominion’s proposed standard is not necessary in order to implement Section A 5 in a reasonable manner,

GreeneHurlocker represents Calpine in these proceedings.
If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

VA SCC Grants Injunction, Orders Dominion to Move Customers

wind turbines and solar arraysThe Virginia Commission has entered an Order on Enrollments granting motions for injunctive relief filed by Calpine Energy Solutions, LLC and Direct Energy Business, LLC. In the Order, the Commission directed Dominion Energy Virginia to “immediately resume processing enrollment requests under Section A 5 for customers who wish to purchase from Direct Energy or Calpine.”

Under Va. Code Section 56-577 A 5 (“Section A 5”), a customer shall be permitted to purchase “electric energy provided 100 percent from renewable energy” from a competitive service provider (“CSP”) if the utility has not filed an approved 100% renewable tariff. To date, Dominion does not have an approved 100% renewable tariff, and several nonresidential customers, with multiple accounts, have signed contracts with Calpine and Direct, two CSPs, to take retail service under Section A 5.

In July, Dominion filed petitions for declaratory judgment asking the Commission to determine that Calpine and Direct had not demonstrated that they were providing “electric energy provided 100 percent from renewable energy” to their customers as required by Section A 5. Calpine and Direct are disputing Dominion’s allegations as well as Dominion’s proposed standard for providing service under Section A 5. In the interim, however, Dominion had refused to process pending and future enrollments until the case was decided.

On July 22, 2019, Calpine and Direct filed for injunctive relief, asking the Commission to require Dominion to process their respective customers’ enrollments – thereby allowing the customers to switch to Calpine and Direct – while the cases are pending.

The Commission held a hearing on the injunction on August 7 and held an expedited hearing on the merits of the cases on August 20, 2019.

In a footnote to the order, the Commission held that Calpine and Direct had satisfied the elements needed for the issuance of an injunction, including: (a) absent the instant order, Calpine and Direct Energy will suffer irreparable harm; (b) Calpine and Direct have no adequate remedy at law; and (c) the Commission is satisfied of Calpine’s and Direct Energy’s equity. The Commission also noted that “A temporary injunction allows a court to preserve the status quo between the parties while litigation is ongoing.”

Our firm is representing Calpine in the proceedings.

If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Comments filed on Draft Maryland Retail Supplier Load Shaping RFP

In late March, we posted about the Maryland Public Service Commission’s request for comments on a draft “Retail Supplier Load Shaping RFP” in the Public Conference 44 proceeding. In early April, comments were filed by the Maryland Energy Administration, the Retail Energy Supply Association, Direct Energy Services, Inc., Staff of the Maryland Public Service Commission, Baltimore Gas and Electric Company/Potomac Electric Power Company/Delmarva Power & Light Company, the Maryland Office of People’s Counsel, and CleanChoice Energy, Inc.

Parties encouraged the Commission to adopt an RFP process to maximize supplier participation, protect trade secrets, provide suppliers flexibility in their load shaping pilot proposals, and allow expanded billing options to enable suppliers to bring innovative proposals to the table. Some parties specifically pointed to supplier consolidated billing and on-bill financing as important tools to pair with supplier time-of-use electricity supply offerings within the pilot. Commenting suppliers noted some key improvements to the RFP structure as compared to a prior retail supplier time-of-use pilot design. However, suppliers also recommended that the Commission add options for marketing support for the retail supplier load shaping pilot offering to help get the word out about the program and encourage customer participation.

Additional recommendations addressed promoting use of renewable energy, access to historical usage data, expanded opportunities for net metering customers, and modifications to other program criteria. Suppliers also raised concerns about certain requirements that may discourage some suppliers from submitting bids to participate in the pilot program. The Office of People’s Counsel commented on the importance of minimizing the costs to both participating and non-participating consumers, ensuring adequate consumer protections, incentives structures, billing, and other issues. All of the comments were filed on April 9, 2019, and as of this post, we are waiting for further action from the Commission in response to the comments.

If you have questions or would like more information about Maryland Retail Supplier Load Shaping RFP or other regulatory issues, please contact Eric Wallace or any of our mid-Atlantic energy lawyers.

SCC Decision Expands Access to Competitive Electric Supply

transmission towers for electricityWhile many political observers were focused on Senate Bill 966, the omnibus utility legislation that was just passed by the General Assembly, the Virginia State Corporation Commission (“Commission” or “SCC”) recently issued an important decision affecting customers’ rights to purchase energy from competitive suppliers.

On February 21, 2018, in Case No. PUR-2017-00109, the Commission approved the first ever “customer aggregation” petition under § 56-577 A 4 of the Code of Virginia. As explained in detail below, this section of the Code allows customers to aggregate their demand for the purposes of satisfying the 5 MW demand threshold required to purchase generation from non-utility companies.

In most circumstances, Virginia’s incumbent electric utilities, including Dominion Energy Virginia (“Dominion”), have a monopoly on the sale of electricity in their service territories. Customers must purchase energy from their utility. Virginia law, however, provides two exceptions to the utilities’ monopoly rights. (Under these two exceptions, customers may purchase generation from non-utility suppliers. But shopping customers must still pay for the utility’s distribution services.)

First, under Va. Code § 56-577 A 5, customers may purchase “100 percent renewable energy” from competitive suppliers if  the customer’s monopoly electric utility does not offer an SCC-approved 100% renewable energy tariff. No utility currently offers an SCC-approved 100% renewable tariff.

Second, Va. Code § 56-577 A 3 law allows large customers with annual demands over 5 MW to purchase generation from competitive suppliers. Importantly, the law also allows a group of customers to “aggregate” their demands in order to reach the 5 MW threshold. The statute treats large customers with multiple meter locations as different customers but allows them to aggregate to meet the 5 MW threshold. Once aggregated, the group will be treated as a “single, individual customer” under the law. Before allowing an aggregation, however, the Commission must find that the requested aggregation would be “consistent with the public interest.”

SCC Case No. PUR-2017-00109 was the first test of this statutory provision – that is, the first time a group of customers sought to combine their demands in order to reach the 5 MW threshold. In this case, Reynolds Group Holdings, Inc. (“Reynolds”), a metals and packaging manufacturer, petitioned the SCC for approval to aggregate six of its retail accounts in Dominion’s service territory.

Dominion and Appalachian Power Company (“APCo”) intervened in the case and opposed the petition. Dominion argued that allowing customers to aggregate their demand “would unreasonably expand the scope of retail access [and would] have the potential effect of eroding a significant portion of the utility’s jurisdictional customer base.” Dominion also suggested that the General Assembly – despite authorizing customer shopping and aggregation – intended to allow retail choice “only in limited circumstances.”

But the SCC, relying on the plain language of Va. Code § 56-577 A 4, rejected Dominion’s and APCo’s arguments and approved the petition. Dominion and APCo have until March 23, 2018, to appeal the decision to the Virginia Supreme Court.

The SCC is also currently considering additional aggregation requests filed by over 160 Walmart customer accounts in Case Nos. PUR-2017-00173 and PUR-2017-00174. (In both of these cases, GreeneHurlocker is representing competitive suppliers who are supporting approval of Walmart’s aggregation requests.)

Should you have any questions about customer aggregation or competitive supply options in Virginia, please contact one our regulatory attorneys.

Additionally, GreeneHurlocker recently published Principles of Electric Utility Regulation in Virginia, which provides a plain-English explanation of Virginia’s electric utility laws, including the statutes affecting retail choice.

Update on Supplier Consolidated Billing in Maryland

Maryland State House (side)

Maryland State House (side) (Photo credit: Wikipedia)

Last fall, Brian Greene discussed the Maryland Public Service Commission’s retail energy supplier consolidated billing proceeding. The Commission is considering supplier consolidated billing as an additional billing option for Maryland customers, alongside the existing utility consolidated billing and dual billing options. With supplier consolidated billing, customers would receive a single bill from their competitive retail supplier that includes both the electricity and natural gas supply charges (from the competitive supplier) and the utility’s transportation and distribution charges.

Under the existing billing paradigm in Maryland, the vast majority of customers receive a consolidated bill from their utility that includes both the energy supply charges and the utility’s transportation and distribution charges. Supplier consolidated billing would flip that model, enabling the competitive supplier to bill the customer, with the flexibility to expand product and service offerings. More information on the details of the proposal are available in the Petition and Reply Comments filed by the petitioning retail energy suppliers (NRG Energy, Inc., Interstate Gas Supply, Inc., Just Energy Group, Inc., Direct Energy Services, LLC, and ENGIE Resources, LLC).

In November 2017, stakeholders submitted extensive comments discussing the benefits and potential risks associated with the supplier consolidated billing proposal. Copies of the comments are publicly available in the Commission’s docket for Case No. 9461.

Following submission of the written comments, the Commission held a legislative-style hearing on February 20th and 21st. Here is a short summary of the two-day hearing:

  • The hearing began with a presentation from the Petitioners in support of supplier consolidated billing. The panel presented and answered questions from the Commissioner for about 2.5 hours.
  • Maryland’s distribution utility stakeholders followed the Petitioners, presenting their views on SCB and responding to the Petitioners’ presentation.
  • Following the utilities, a competitive retail energy supplier panel offered support for SCB, with some offering tweaks to the proposed program.
  • The next panel included public sector stakeholders from the Maryland Energy Administration and Montgomery County offering support for the proposed supplier consolidated billing program and suggestions regarding some of the program details. The Maryland Office of People’s Counsel also presented, discussing what it perceives as potential risks of the program.
  • Commission Staff rounded out the presentations, discussing the merits of the SCB proposal, offering support for the concept and at least one recommendation to alter the proposal.
  • The hearing concluded with the Petitioners offering a few final comments responding to some of the points raised by other stakeholders during the hearing.

After concluding the hearing, the next step is for the Commission to take further action on the proposal. If you are interested in the pending SCB petition in Maryland or any related competitive retail energy market issues, please contact one of GreeneHurlocker’s mid-Atlantic energy lawyers.

Appearing at the MPSC Hearing: From L to R – Brian Greene, Mike Starck (NRG Energy), Duncan Stiles (Just Energy), Tami Wilson (IGS Energy), and Alex Donaho (Direct Energy).

Virginia Supreme Court Upholds Electric Utility Rate Freeze

But There Is A Powerful Dissent

On September 14, 2017, the Supreme Court of Virginia issued an opinion affirming the controversial “rate freeze law.”transmission towers for electricity

As we previously discussed here and here, a group of industrial customers of Appalachian Power Company (“APCo”) appealed to the Supreme Court of Virginia, asking the Court to strike a controversial portion of the Virginia Electric Utility Regulation Act (“Regulation Act”). The group, the Old Dominion Committee for Fair Utility Rates (“Committee”), challenged a 2015 amendment to the Regulation Act, Senate Bill 1349 — the so-called “rate freeze law” which prevents the State Corporation Commission (“SCC” or “Commission”) from reviewing or reducing the base rates of APCo and Dominion Virginia Power (“Dominion”) until 2020 and 2021, respectively.

There is little dispute the law has helped APCo’s and Dominion’s profits and led to rates that are higher than they otherwise would be if the Commission had authority to review them. Using Dominion’s own figures, Commission Staff calculated in a recent report that the company’s customers would be due about a $130 million refund on bills paid in 2015 and 2016. APCo had overearnings of more than $20 million in 2016, according to the report.

The case centered around the language in Article IX, § 2 of the Constitution of Virginia, which the Committee argued reserved rate-making authority to the Commission, and that the General Assembly had overstepped its authority by passing legislation that stripped the Commission from reviewing the utilities’ rates for five and seven years. Article IX, § 2 provides as follows:

“Subject to such criteria and other requirements as may be prescribed by law, the [State Corporation] Commission shall have the power and be charged with the duty of regulating the rates, charges, and services and, except as may be otherwise authorized by the Constitution or by general law, the facilities of railroad, telephone, gas, and electric companies.” Va. Const. art. IX, § 2.

Justice Mims, in a powerful dissent, summed up the issue properly:  “This case boils down to a simple question: what does that sentence mean?”

In an opinion written by Justice Elizabeth A. McClanahan, the Supreme Court of Virginia rejected the Committee’s argument that the rate freeze law violates Article IX, § 2 of the Constitution of Virginia. The Court explains that “[t]here is nothing in Article IX, § 2 that clearly indicates that the Commission’s authority to set rates displaces or is exclusive of the General Assembly’s authority.” The Court further states that the Commission correctly decided that the rate freeze law “is constitutional because it is not plainly repugnant to Article IX, § 2 of the Virginia.” In her opinion for the Court, Justice McClanahan also noted that the Court has “no constitutional authority to judge whether a statute is unwise, improper, or inequitable because the legislature, not the judiciary, is the sole author of public policy.”

In his dissent, Justice Mims argues that the language in Article IX, § 2 means that the “General Assembly may impose standards and prerequisites that the Commission must adhere to when exercising its power and duty to set rates.”  He goes on to clarify that it “does not mean that the General Assembly may suspend that power and duty.” Justice Mims warns that based on the Court’s analysis, the General Assembly has the power to strip the Commission of its power set forth in Article IX, § 2 at its will. “That sobering outcome thwarts the purpose behind creating the Commission in the first place.”

GreeneHurlocker represented the Virginia Citizens Consumer Council (“VCCC”), which filed an amicus brief before the Court. The VCCC argued that the rate-freeze law was unconstitutional. If you have any questions about any of the legal aspects of this case, do not hesitate to contact one of GreeneHurlocker’s Virginia energy and regulatory attorneys.

Virginia Commission Rejects Utility “Green Tariff” Proposal

wind turbines and solar arrays

Virginia Commission unanimously rejects utility “Green Tariff” proposal, representing major victory for renewable energy advocates

wind turbines and solar arraysOn September 14, 2017, the Virginia State Corporation Commission entered a final order rejecting a renewable energy tariff proposal (“Green Tariff”) filed by Appalachian Power Company, finding that the tariff rates were not just and reasonable. APCo’s Green Tariff was intended to offer customers the option to purchase 100% renewable energy instead of energy produced from coal and gas-fired facilities. Given the structure of APCo’s proposal, the Commission’s decision represents a major victory for renewable energy developers, environmental advocates, and clean energy suppliers in Virginia.

APCo’s application requested permission to offer a voluntary, 100% renewable tariff to its customers. But APCo proposed to simply repackage generation it was already purchasing via four power purchase agreements (“PPAs”), and then reallocate that energy to participating customers. Customers would have paid 18% more than their standard rates to participate in the program.

The so-called Green Tariff, if approved, would have represented the first time a Virginia utility offered a 100% renewable tariff option for its customers. But, if approved, the tariff would have also largely foreclosed competition for renewable energy and prevented customers from purchasing generation from competitive suppliers. Under current law, most customers are allowed to purchase renewable generation from third-parties only if their incumbent electric utility does not have an approved tariff for 100% renewable energy. See Va. Code Section 56-577(A)(5).

GreeneHurlocker represented the Maryland-DC-Virginia Solar Energy Industries Association (“MDV-SEIA”) in the case. MDV-SEIA argued that APCo’s proposal was not in the public interest and should be rejected for several reasons. For example, the per-MWh price of the Green Tariff was unreasonably high and not reflective of current prices for renewable energy. MDV-SEIA also noted that the Green Tariff did not contain any solar generation or any Virginia-based renewable resources of any kind.

The Commission agreed with MDV-SEIA, finding that “[APCo] has not established that the rate proposed under [the Green Tariff] is just and reasonable,” The Commission also cited MDV-SEIA’s arguments that the Green Tariff price “is much higher than prevailing prices for renewable energy.” But the Commission noted that APCo is not precluded from applying for approval of a redesigned renewable energy tariff.

APCo is permitted to appeal the decision to the Supreme Court of Virginia by filing a notice of appeal at the Commission on or before October 16, 2017.

The Commission is also currently considering a similar renewable tariff application filed by Dominion Energy Virginia (“Dominion”) in Case No. PUR-2017-00060. If approved, Dominion’s tariff would severely limit clean energy choices for its large customers and potentially other classes of customers in the future.

Please contact one of our renewable energy lawyers or regulatory attorneys should you have questions about this case. The Commission case number for the APCo matter is PUE-2016-00051, while Dominion’s proposal is currently being considered in PUR-2017-00060.

Regulators Continue to Press on Consumer Rules

March 2017 Energy Update Brian Greene

The March Energy Update features Brian Greene explaining efforts in Delaware, Maryland and the District of Columbia to improve consumer protection rules that apply to selling commodities direct to consumers in the energy and natural gas markets.

Delaware Adopts New Consumer Protection Rules for Electricity Sales

The Delaware Public Service Commission has approved new Electric Supplier Rules for final publication in the April 1, 2017 edition of the Delaware Register. The rules will become canstockphoto17677884effective April 11, 2017.

The new rules replace Delaware’s existing Electric Supplier Rules and introduce numerous provisions that affect virtually everything that retail suppliers do – including not only obtaining a license but also marketing electricity and enrolling new customers.  In fashioning the new rules, the stakeholders looked primarily to Maryland’s and Pennsylvania’s recently-revised rules, and then tailored them to Delaware.  Retail suppliers will be required to make additional upfront disclosures in marketing and contract documents, and provide specific training for their agents. The rules directly address telemarketing and door-to-door sales and add requirements that do not exist today. As an example, for door-to-door sales, a supplier will be required to obtain a wet or electronic signature and also to perform a third-party verification. The rules also have a new definition and requirements for third-party verifications.

Our firm was very involved in negotiating the new rules and arguing non-consensus items before the Commission. If you’re a retail supplier eyeing Delaware as a new service territory, or if you’re already serving in Delaware, please feel free to call our energy lawyers with any questions.

 

For Retail Energy Suppliers – Compliance Matters Part 2

(Originally posted at LinkedIn.com)

Last week, we introduced Part 1 of our two-part discussion about the importance of retail electricity and natural gas suppliers complying with state laws. We focused on requirements in the contract, the contract summary, certain required disclosures, and so forth. This week, we’ll hit on items relating to marketing, such as your company’s marketing materials, telemarketing, and door-to-door activities. Our lawyers are counseling retail suppliers daily on these and other regulatory issues, so please feel free to contact us at (804) 864-1100 if you have any questions or desire additional information.

Have you checked your marketing materials?

Marketing materials are the primary means of communicating offers to prospective customers. It’s safe to say that all states require marketing materials to contain accurate information and not mislead customers. Additionally, states differ in their requirements that the materials include certain information in specific circumstances. In Pennsylvania and soon in Delaware, if you quote a price, you must also provide a table showing the price per kWh for an average residential customer (and small commercial in Delaware) using 500, 1,000, or 2,000 kWh of electricity. Most states require other disclosures such as a license number and that the state commission does not regulate the supplier’s prices. You want to make sure that marketing materials used in specific states follow that state’s requirements.

Are you training your agents properly?

In the past few years, states have revised their rules to include specific areas of training for supplier’s agents, including telemarketing and door-to-door agents. Roughly, there are about 12 topics that must be included in agent training. Those topics include certain state and federal laws and can include local laws as well. When we review training materials, we recommend a robust slide deck and reference materials that can be produced to a state commission or a public advocate if necessary to show the extent of the training. Many suppliers will require the agent to sign a verification form that he or she completed the training. Some suppliers require a test at the end. What’s in your company’s training materials, and are you ready to produce the documents if you are required to do so?

What’s in your telemarketing sales scripts?

Are your telemarketing agents adequately explaining the product and the material terms and conditions? Agents are generally required to discuss all material terms during the sales portion of the call, and some states have specific disclosures that the agent must make. Are you reviewing your telemarketing sales scripts periodically and ensuring they comply with state laws? Also, while some states require that you record either the sales portion of the call or the third-party verification, others require that you record both. And if you’re recording, in what manner and for how long are your maintaining the recording?

How about that third-party verification?

Many states are now including specific questions to be asked during the TPV. Maryland has a specific requirement that the sales agent not be present and that the TPV agent instruct the customer how to terminate the TPV without enrolling. There’s also an issue of when you need a TPV – states are different, and the TPV can also be done utilizing a process other than the telephone.

Can I cold-call thousands of potential customers and sign them up without a wet or electronic signature on a contract?

Not in Maryland, you can’t. This has tripped up more than one supplier. The Maryland Telephone Solicitations Act has specific exemptions, and if you don’t meet one of those then you have to obtain the customer’s wet or electronic signature to enter into a contract with that customer. If you satisfy one of the exemptions, there are regulations that still apply to the enrollment. This is a perfect example of the importance of knowing a state’s law before you start marketing.

Does my door-to-door contract meet state requirements?

There’s the substance of the contract (and the related Notice of Cancellation), but there’s also the formatting. We’ve seen suppliers get penalized for, or at least forced to litigate, issues such as not placing language in a contract where a statute says it must be placed, or for not putting specific language in bold, or for not providing a sufficient number of copies to the customer.

So there you have it – a list of compliance checks that is enough to get you started but not enough to ensure 100% compliance. If we tried to cover every item, our little two-part series would turn into a big fat book. The takeaway here is that there are a lot of rules in each state, and failing to comply with any one of them could land your company on the regulatory hot seat. As we said in Part 1, compliance is not sexy, but You Gotta Do It (tip: when playing this gif, hover your cursor over the screen, and on the bottom right you’ll see a volume button. Turn on the volume.).

GreeneHurlocker’s lawyers handle a broad range of regulatory and transactional matters related to electricity, natural gas, and water. Our lawyers work extensively with retail electricity and natural gas suppliers throughout the Mid-Atlantic. We’re also heavily involved in the renewable energy business, including solar, biomass and wind. We do other stuff, too. We encourage you to contact us with any questions.