STATE OF MAINE PUBLIC UTILITIES COMMISSION Docket No. 2017-00268 October 16, 2017 PUBLIC UTILITIES COMMISSION Inquiry into Transparency and Marketing Practices in the Electricity Supply Market NOTICE OF INQUIRY VANNOY, Chairman; WILLIAMSON Commissioner I. SUMMARY The Commission initiates this Inquiry to receive comment and collect information regarding consumer protection and the marketing practices of licensed competitive electricity providers (CEPs). The information collected in this Inquiry will be used by the Commission in a subsequent rulemaking to amend its Chapter 305 rules, which govern the licensing requirements, annual reporting, and enforcement and consumer protection provisions for the competitive provision of electricity. II. BACKGROUND Pursuant to the provisions of the Electric Industry Restructuring Act, electric supply service in Maine was deregulated in 2000 and consumers were provided with the opportunity to choose the provider of their electricity service. 35 M.R.S. § 3201. As a result, customers receive two distinct electricity services: delivery and supply. By default, customers are placed on standard offer service, but customers may choose a CEP for their electricity supply service. This separation of electric service into two separate and distinct services, where delivery and supply are provided by a different entity, has required regulatory and statutory attention. In January 2015, the Commission amended its Chapter 305 rules, responding to what had been a significant increase in competitive activity involving supply services to residential and small commercial customers. The increased competitive activity had highlighted the need for a review of the provisions of Chapter 305, and the 2015 rulemaking focused primarily on amendments to the consumer protection provisions of the rule, as well other changes based on the Commission’s experience in implementing the rule. Maine Public Utilities Commission, Amendments to Licensing Requirements, Annual Reporting, Enforcement and Consumer Protection Provisions for Competitive Provision of Electricity (Chapter 305), Docket No. 2014-00214, Order Adopting Rule and Statement of Factual and Policy Basis (Jan. 14, 2015). Recently, the 128th Maine Legislature examined transparency in the electricity supply market with regard to CEPs, enacting P.L. 2017, ch. 74, which will be effective November 1, 2017. A copy of this public law is attached to this notice. This session law, codified at 35-A M.R.S. § 3203(4-B) & (4-C), provides consumers that elect to Notice of Inquiry (2) Docket No. 2017-00268 receive electricity supply service from CEPs with new consumer protections, namely by enacting new conditions of licensure for CEPs and new informational disclosure requirements for consumers’ monthly bills. The Commission’s Chapter 305 rules require amendment to conform to these new statutory requirements. Additionally, the Commission’s Consumer Assistance and Safety Division (CASD) has recently and repeatedly over time experienced an increase in consumer and utility complaints with regard to the door-to-door marketing practices of CEPs. It appears the CEPs are at times utilizing third-party companies to solicit sales door-todoor and that this marketing practice is resulting in violations of Chapter 305. For example, CASD has received complaints that CEP salespersons fail to identify the company for whom the salespeople work, make unreasonable repetitive sales visits to the same home, make sales visits at unreasonable hours of the day, provide false or misleading information regarding electricity rates and the purported benefits of contracting with a CEP for electricity supply service, and provide false or misleading information regarding the difference between who is delivering electricity and who is supplying the electricity. III. INQUIRY The Commission requests comment as explained below. A. Consumer protections and notice through utility bills, 35-A M.R.S. § 3203(4-B) & (4-C) Attached to this notice is a redline of current Chapter 305 of the Commission’s rules, reflecting anticipated amendments to be proposed in a future rulemaking to conform Chapter 305 to recently enacted legislation. The attached redline proposes amendments including, among others, the following. Commission specifically seeks comment on the below. 1. Given the Commission’s historical policy of providing residential and small commercial customers the same consumer protections under Chapter 305, the Commission anticipates applying the recently enacted consumer protections to both residential and small commercial customers, even though the legislation on its face refers only to residential consumers. 35-A M.R.S. §§ 3203(4-B), (4-C) 2. With regard to the new legislative requirement that CEPs provide prospective customers with information regarding the standard offer service, should CEPs be required to provide prospective customers with the actual standard offer prices, both current and, if available, for the next standard offer term? 35-A M.R.S. § 3203(4-B)(A). 3. The Commission preliminarily interprets the requirement that utility bills provide certain notices to be applicable regardless of whether customers are Notice of Inquiry (3) Docket No. 2017-00268 receiving one utility bill from the transmission and distribution (T&D) utility or a separate bill from the CEP. 35-A M.R.S. § 3203(4-C). 4. Pending adoption of amendments to Chapter 305 to conform to the recent legislative changes, should CEPs and T&D utilities be required to provide notice through utility bills of the website and telephone number of the Office of the Public Advocate, as set forth in the attached redline of Chapter 305, to comply with the requirements of 35-A M.R.S. § 3203(4-C)(A)? 5. With regard to the requirement that CEPs obtain express consent prior to renewing a Terms of Service at a fixed rate that is 20% or more above the rate of the expiring Terms of Service, the Commission preliminarily interprets the 20% to require a calculation of an average rate over the term of a Terms of Service that contained a variable rate. 35-A M.R.S. § 3203(4-B)(C). Please provide comment on the above-referenced issues and questions, as well as generally whether the attached redline would amend Chapter 305 as necessary to conform to the new statutory requirements. The attached redline does not currently propose any amendment to address the marketing practice issues identified below for consideration by the Commission. B. Marketing practices The sales practices described above would inhibit a consumer’s ability to make informed choices about its electricity supply. This greatly concerns the Commission as the entity charged with oversight of the CEP market. Thus, the Commission seeks input from CEPs, electric utilities, consumer advocates, and other stakeholders regarding options for addressing this problem. The Commission poses several options below for addressing these concerns and also seeks suggestions from interested persons on other options that may be effective at addressing these concerns. 1. Should additional regulatory requirements be put in place with regard to third – party marketing companies to ensure compliance with Chapter 305? For example, would express training requirements improve CEP compliance with residential consumer protection standards? If such regulatory requirements are put into place, should the Commission require formal verification of the training for each person that will be marketing for the CEP, whether employed by the CEP or by a third-party company? 2. Can or should the practice of selling electricity door-to-door be prohibited in Maine, either outright through rule or through the licensing process for CEPs? Does the Commission have the statutory authority to adopt such a prohibition? 3. Does the practice of third-party companies working on commission impact compliance with Chapter 305? If yes, can or should this practice be prohibited through the licensing process? Notice of Inquiry (4) Docket No. 2017-00268 4. Should additional security be required as a prerequisite to CEPs engaging in door-to-door marketing practices? 5. Should CEPs who engage in door-to-door marketing practices be required to submit advance notice to the Commission as to the targeted geographical locations for door-to-door sales and/or submit quarterly reports detailing door-todoor activities? If yes, what specific information should be included in the reports? 6. Should third-party verification requirements be modified where customers have been contacted through door-to-door marketing? If so, how should it be modified? 7. Are there other types of marketing activities that the Commission should take note of that might require additional regulatory/reporting requirements? 8. To what extent could the Commission’s regulation of CEP marketing practices be informed by the statutory regulation of transient sales, 32 M.R.S. §§ 1470114716, and consumer solicitation sales, 32 M.R.S. §§ 4661-4671. Explain whether similar provisions ought to be incorporated into the Commission’s regulation of CEPs. 9. Comments on other issues not identified above but relevant to customer protection standards are also requested. IV. SERVICE, COMMENTS, and WORKSHOP This Notice will be provided to all CEPs licensed to operate in Maine, all transmission and distribution electric utilities, as well as the Office of the Public Advocate. All comments should be filed by November 16, 2017 in the Commission’s CMS system in this docket. Commission Staff anticipates scheduling a workshop on the issues identified in this Notice and comments received following the comment deadline. Dated at Hallowell, Maine this 16th day of October, 2017 BY ORDER OF THE COMMISSION ________/s/ Harry Lanphear________ Harry Lanphear Administrative Director Notice of Inquiry (5) Docket No. 2017-00268 COMMISSIONERS VOTING FOR: Vannoy Williamson