Important changes have come down the Pennsylvania pipeline for retail electric and natural gas suppliers. On June 30, the Public Utility Commission (PUC) made changes to contract requirements for natural gas suppliers. On July 7, a ruling against Blue Pilot Energy may mean that all suppliers are now required to receive written authorization when enrolling new customers, regardless of whether or not they use independent third-party verifications when telemarketing.

Updates to Natural Gas Disclosure Requirements

On June 30, 2016, the Independent Regulatory Review Commission approved changes made by the Pennsylvania Public Utility Commission (PUC) to disclosure requirements for natural gas suppliers providing service to residential and small business (mass market) customers.

The new regulations require that by July 29, 2016 all natural gas suppliers must:

1. Develop a ‘Contract Summary’ (using a standard format developed by the PUC), which must then be sent to all new mass market customers in addition to the disclosure statement;
2. Submit a draft sample of the Contract Summary for each type of product offered (e.g. fixed price, variable, introductory price) to the PUC.

The PUC will then review and comment on the contract summaries. However, it has indicated that this is to be a one-time review, with suppliers expected to incorporate the feedback and apply it to any future changes to their contract summaries.

The approval finalizes the amendments to Title 52 of the Pennsylvania Code, Sections 62.72, 62.75, and 62.81. were adopted by the PUC in April 2016 under Docket No. L-2015-2465942, and approved by the on June 30, 2016.

The Blue Pilot Case

On July 7, two Pennsylvania Administrative Law Judges (ALJs) released an initial decision regarding an ongoing proceeding against Blue Pilot Energy for violating state and commission rules regarding telemarketing. The ALJs found that Blue Pilot had failed to send written contracts to customers obtained through telemarketing, and had failed to obtain signatures on those documents from the customers. The Telemarketer Registration Act (TRA) – which Blue Pilot was accused of violating – makes it illegal to fail to send a written copy of the agreement made via telephone to the customer. It also makes it illegal to fail to obtain the consumer’s signature on the written contract.

Most PA retail suppliers have been operating on the assumption that no written signature is required if they use a third-party verification (TPV) system. However, the ALJ’s in this case have stated the opposite, finding that there is no exception for the written signature for suppliers.

Blue Pilot can still appeal the decision, and it may be overturned or modified. However, the decision still creates precedent for pursuing enforcement action against suppliers who do not receive written signatures from customers enrolled over the phone, and in the interim, it appears that the ALJ’s have decided that suppliers must comply fully with the Telemarketer Registration Act and obtain written signatures from customers enrolled through telesales.