Tel: 804.864.1100

Tel: 804.864.1100

Delaware

Delaware Implementing Purchase of Receivables Program for Electricity Suppliers

At long last, the Delaware Public Service Commission entered an order adopting Delmarva Power’s proposed purchase of receivables (“POR”) program effective July 1, 2019. We previously blogged on this issue when Delmarva initially filed its proposal. The effective date was delayed by one month, but Delmarva will purchase suppliers’ receivables effective the end of May so that suppliers are not harmed by the delay.

The going-in rates for the first year of the program are in the table below. These are important because they represent the “haircut” that suppliers must accept when Delmarva purchases their receivables.

Residential Small commercial Large commercial Hourly Priced (LGS, GSP, GST)
Payment factor 99.3833% 99.6591% 99.8818% 100.00%
Discount factor 0.6167% 0.3409% 0.1182% 0.0000%

For more information, please contact one of our energy lawyers.

Delaware Sets Hearing for Retail Market Enhancements

The Delaware Public Service Commission has established a March 8, 2018 hearing date to consider retail choice enhancements.

The Delaware General Assembly meets in the Leg...

The Delaware General Assembly meets in the Legislative Hall in Dover. (Photo credit: Wikipedia)

The enhancements include a purchase of receivables program; “seamless moves” where customers may move within the utility service territory and maintain their supplier; “ instant connects” where customers may sign up with a supplier on their first day of service; an “enroll with your wallet” program where customers may enroll with a supplier without the use of their utility account number or other utility-assigned identifier; improvements to the Commission’s shopping website; and utility bill inserts to promote choice.

The proceeding has been pending since the end of 2015 when the Electricity Affordability Committee created by the Delaware General Assembly filed a petition with the Commission. Since that time, the parties have filed written comments and participated in working group meetings. Also, the case was stayed for a period of time while the parties and the Commission finalized amendments to the Delaware Electric Supplier Rules.

The case will be heard before a hearing examiner. The primary participants in the case are the Staff of the Commission, Delmarva Power, the Delaware Public Advocate, and the Retail Energy Supply Association (RESA). GreeneHurlocker is representing RESA in the proceeding.

For more information, please contact one of our regulatory attorneys.

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.

For Retail Energy Suppliers – Compliance Matters

(Originally posted at LinkedIn.com)

If you’re a retail electricity or natural gas supplier and you think no one will ever file a complaint against you, or that no state commission will ever ring you up with a show cause order – just stop it now. While you can’t control complaints filed against your company, you can control how closely your company adheres to laws regarding marketing to, contracting with, enrolling, and serving customers. In other words, you can significantly reduce the risk of complaints.

In the past few years, Maryland, Pennsylvania, Delaware, D.C., and others have started or completed the process of revising their consumer protection rules, adding numerous requirements for retail suppliers who do business in those jurisdictions. Is your company adhering to these new rules? Has your company researched various applicable state statutes in areas such as telemarketing and door-to-door marketing to ensure that you’re compliant?

We get it. Resources devoted to compliance can be costly and certainly don’t produce revenues. But compliance will allow your company to avoid the even greater expense of responding to more and more complaints and, inevitably, participating in a show cause proceeding and enduring the bad press that comes with it. So consider compliance a necessary evil and You Gotta Do It.

Since we’re involved all the time with clients facing compliance requirements, we have developed a quick-hit list of items you should assess internally to ensure your company’s compliance. This is Part 1, which focuses on the retail supplier’s contract with the customer. In Part 2, which we’ll publish next week, we’ll cover items relating to marketing. In the interim, if you have any questions, you are welcome to call one of our energy regulatory lawyers at (804) 864-1100.

The below items are not listed in any particular order, and rules vary by state, but you’ll get the idea.

What’s in your contracts?

Most states have a list of material terms and conditions that must be included in the contract. They include all fees and charges, early termination fees, how the customer and the supplier may terminate the contract, the duration of the contract, renewal procedures, and so forth. Maryland and Pennsylvania require specific contract language for variable-priced contracts, and as of this writing Delaware is about to join them.

What’s this Contract Summary thingamabob?

Many states now require the supplier to summarize the contract in a table or box, similar to what you see in communications from your credit card company. There can be rules identifying which specific provisions must be summarized. Rules also address when you must provide the summary during the different marketing and enrollment channels (telemarketing, door-to-door, internet, etc.). The summary is a useful tool to assist customers in understanding the most material of the material contract terms.

Do I have to notify variable price customers every month about the next month’s price?

In Maryland and soon in Delaware, you will need to provide the customer with access to the next month’s rate at least 12 days before it becomes effective. If you don’t know the price, you must provide an estimate, and your actual price cannot exceed your estimate. The goal here is to allow customers to see their next month’s price. If they don’t like it, they can switch to a different provider before the new price becomes effective. This new rule works in conjunction with changes in law that allow customers to switch in three business days as opposed to the current timeline which can take up to five or six weeks. The customer’s access to the new price can include posting the new price on a website, or allowing the customer to call the supplier to obtain the new price.

What do I need to say in a renewal letter and when do I send it to the customer?

Each state has different requirements in terms of substance and in the timing of sending the notice to customers. Omitting the required information can result in penalties. Some states require you to highlight any changes to the material terms of the contract. Many states have altered their renewal notice requirements in the past few years, so we recommend that you review your notices to ensure they are compliant.

How’s your on-line enrollment process?

Most suppliers allow customers to enroll online. Just pick your product, enter the relevant info and you’ve authorized a switch to the new supplier. But are you providing all the necessary information at the right times? Does your site prompt the customer to print the contract? Are you doing what’s required to ensure that the signature qualifies as an electronic signature? Some states are broadening their review of suppliers’ websites during the application process, and certainly consumer advocates are examining the information on the sites to ensure that customers fully understand the products they are considering.

Compliance can seem daunting, and it takes time. At the end of the day, it’s an investment that will make for well-informed customers that choose your company because they understand the product and trust that your company is better than all others. We hope that the above list, and the list we’ll publish next week in Part 2 of our series, provides a starting point for your review, as these are just some of the issues our lawyers see on a daily basis and that every supplier should address in each state in which it operates. Stressing compliance within your company, while perhaps not popular, should lead to a happier, loyal customer base and avoid significant regulatory costs down the road.

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.

Delaware Approves New Consumer Protection Rules for Comment

The Delaware Commission on November 1, 2016, approved for publication and comment new consumer protection rules that largely resemble the rules that were published in October and which we blogged about here.  We expect the newly-approved rules to appear in the December 1, 2016 Delaware Register, followed by a comment period. This marks the near-end of a proceeding that has lasted for more than four years.

The primary stakeholders in the proceeding had agreed to certain modifications to the version of the rules published in October, but two non-consensus issues remained for the Commission’s consideration. The two issues involved the length of the rescission period and issues pertaining to the customer lists that the utility, Delmarva Power, provides to licensed retail suppliers. The Commission ruled on those matters on November 1, and a written, formal order is expected at the Commission’s November 15 meeting.

The newly-approved rules are a total re-write of Delaware’s current rules. They include numerous protections for consumers and include rules for suppliers who want to sell electricity to Delaware customers.  The rules will require suppliers to provide specific information to customers during the marketing and enrollment processes to ensure that customers fully understand the electricity products they are considering. The rules also obligate suppliers to provide information to current customers during at certain times during the contractual relationship. Not only that, but the rules to into great detail concerning marketing channels such as door-to-door and telemarketing, as well as other matters.

Once published, there will be a comment period and we expect the rules to become final at some point in the first quarter of 2017. Our firm has represented the Retail Energy Supply Association in this proceeding. If you want further information on the proposed Delaware rules or have questions about retail energy competition and consumer protection, call one of our energy regulations lawyers.

Delaware Arguments Are Covered at EnergyChoiceMatters.com

We’re grateful for the coverage EnergyChoiceMatters.com put out yesterday about the staff-suggested changes to proposed Delaware rules that the Retail Energy Suppliers Association and the Division of Public Advocate (DPA) worked out earlier this year. We think are these changes in the proposed rules are market killers because of their supplier and consumer requirements. You can read their complete coverage here. The Delaware Commission posted pictures of the meeting here.

If you have any questions or concerns about the Delaware rules or any energy regulation matter in the mid-Atlantic, simply contact one of our energy lawyers.