Introduction:
The Retail Energy Advancement League (“REAL”) is a national advocacy organization dedicated to the expansion and modernization of American retail energy markets. Our organization was founded by a coalition of companies that believe smart regulation and consumer protections are critical to realizing the many benefits of competition.
While competitive markets are regulated by federal and state entities, REAL members are committed to setting and adhering to standards that enhance retail energy markets. Accordingly, to establish retail energy market best practices, the Retail Energy Advancement League looked to the Consumer Bill of Rights originally introduced in 1962.
The result is the REAL “Retail Energy Markets Consumer Bill of Rights” which highlights the specific consumer rights that underpin competitive energy markets, outlines our members’ commitments in action to protect these rights, and provides recommendations for policymakers that regulators will bolster consumer rights while promoting the advancement of robust, competitive retail energy markets.
Background on the Consumer Bill of Rights:
In 1962, President John F. Kennedy presented a speech to the United States Congress that outlined four basic human rights. The United Nations later expanded this list and Consumers International adopted this framework – called the Consumer Bill of Rights – as a charter.
The Consumer Bill of Rights includes the following:
- Right to safety – consumers have a right to be protected against products and services that are hazardous to their health or to their life;
- Right to be informed – businesses should always provide consumers with sufficient information to make informed product choices; product information should be complete, truthful, and relevant;
- Right to choose – consumers have a right to a variety of products and services, provided by different companies;
- Right to be heard – consumers have a right to voice positive experiences and concerns about a product or service; consumer feedback should be considered in policy-making;
- Right to satisfaction of basic needs – individuals have a right to access basic, essential goods and services: food, clothing, shelter, health care, education, and public utilities;
- Right to redress – consumers should receive a fair settlement of just claims, including compensation for misrepresentation or unsatisfactory services;
- Right to education – consumers should be able to acquire information and skills needed to make informed, confident choices about good and services;
- Right to a healthy environment – individuals deserve to live in communities and do business with companies that promote the well-being of present and future generations;
Applying the Consumer Bill of Rights to Retail Energy Markets
REAL identified several consumer rights that are directly relevant to a well-structured retail supply market. The “Retail Energy Markets Consumer Bill of Rights” describes how these consumer rights apply in the context of retail energy markets, outlines our members’ commitments in action to protect these rights, and provides recommendations for policymakers that regulators will bolster consumer rights while promoting the advancement of robust, competitive retail energy markets.
Retail Energy Markets Consumer Bill of Rights
The Right to Choose. Consumers have the right to choose an energy services provider based upon their individual needs or preferences and to choose from a variety of energy products that benefit individual consumers (e.g. renewable energy, time-of-use plans, bill predictability, rate stability, etc.) regardless of the consumer’s background, education, or income level. Regulators, consumer advocates and the supplier community should encourage customers to shop, compare offers, and ask questions to promote empowering consumer choice.
Our pledge:
- Work with policymakers to advocate for competitive energy markets that facilitate customer choice.
- Monopoly / partially restructured states: Work with policymakers to enable customer choice.
- Restructured states: Work to ensure barriers to consumer choice are eliminated so that consumers can experience robust benefits from competition while ensuring strong consumer protections are in place to underpin a well-functioning market.
- Offer customers a variety of products and services that seek to meet their unique needs while providing superior customer service.
- Continue to innovate and develop new products based on consumer interest and demand.
Our recommendations to policymakers:
- Routinely engage the supplier community in discussions around opportunities to improve the market or proactive reforms.
- Enable customers to choose the products and services that meet their needs, with access to the information necessary to make informed choices.
- Implement 3-business day accelerated switching to enable customers to enroll with their preferred supplier and cancel service as quickly as possible.
- Allow supplier consolidated billing so that consumers can choose to receive a bill for all of their energy-related services from their preferred supplier.
- Adopt consumer-centric policies that make it easy for customers to exercise their right to choose, including:
- Instant connect – allow consumers to begin service with their preferred supplier when they establish service (i.e. do not require customers to enroll in utility default service when they establish service).
- Seamless move – allow customers to keep their service provider and contract when they move to a new address within the same utility service territory (i.e. do not require a customer to cancel and re-enroll with their preferred supplier when they are moving within the same utility service territory).
- Enroll with your ID – allow consumers to enroll with a supplier using information known to them to enable efficient and secure transactions (e.g. driver’s license number, passport, phone number, etc.).
The Right to Education. Consumers have a right to be educated about the competitive energy market and how their state’s unique system works. In restructured markets, regulated utilities deliver energy to customers’ homes and businesses and provide basic energy supply service to customers who do not choose a competitive energy supplier. Energy suppliers licensed by state agencies (e.g. Commissions or Departments) supply electricity and/or natural gas and often offer a variety of products and services designed to meet a consumer’s unique preferences. The right to education includes understanding common myths about retail choice that create customer confusion and unreasonably inhibit choice.
Our pledge:
- Work with policymakers to develop educational information which consumers can understand to post on Commission websites.
- Work with our partners to create and maintain informational content that focuses on consumer education.
- Actively engage media and respond to media inquiries with information about energy choice.
Our recommendations to policymakers:
- Provide customers and media with educational materials to improve awareness of a customer’s right to choose an energy supplier, what questions to ask, and how to do so.
- Facilitate consumer choice by requiring utilities to inform customers of their right to choose, including by providing educational information regarding retail choice in an easily accessible location on every utility’s website and directing customers to the state-managed shopping website to learn about available products.
- Actively dispel common myths and misunderstandings about energy shopping (e.g. customers have a right to know that shopping does not impact their reliability or service restoration in the event of an outage).
The Right to be Informed. Customers have a right to make informed decisions about suppliers and the products and services being offered in a competitive market. Customers must be able to make informed choices based on clear, plain language that is easy to understand.
Our pledge:
- We will provide our customers with a renewal notice highlighting any material changes to the price structure.
- We will clearly communicate our product offerings and use easy-to-understand language in all of our customer communications, including marketing materials, contracts, and notices.
- We will engage a customer who does not understand English in the customer’s preferred language or end the interaction.
Our recommendations to policymakers:
- Launch and manage a customer choice website where customers can easily compare products and services including time-of-use and value-added products. Ensure the utility price to compare and renewable content (including relevant REC attributes such as national or regional and source) is listed for easy comparison.
- Require electric and natural gas utilities to identify all direct and indirect costs associated with providing default energy supply to customers and appropriately allocate the costs between supply and distribution rates. Once all appropriate costs are included in the utility’s default supply rate, then the consumer is empowered to make a more accurate “apples-to-apples” comparison.
- Provide consumers with an explanation of common terms and answer frequently asked questions about how to shop for a competitive supplier.
- Provide consumers and the media with updates concerning upcoming changes to default service pricing.
Right to Be Heard and the Right to Redress. Customers have a right to contact service providers and to be treated courteously and respectfully. Customers should be able to utilize their preferred channel of communication to be heard (e.g. phone, email, website). When a customer is dissatisfied, they have a right to redress and/or cancellation of service.
Our pledge:
- Provide multiple channels for a customer to receive customer service support (e.g. phone, email, website). In the event a customer is dissatisfied with service, we will seek to resolve their concern or facilitate cancellation of service.
- Promptly answer customer calls received by telephone.
- Attempt to respond to email inquiries within one business day.
- Be courteous and treat all customers respectfully.
- Dedicate staff to review feedback from customers to identify opportunities to provide a better overall customer experience and innovative products and services aligned with customers’ interests.
- Collaborate with relevant stakeholders to identify opportunities for smart regulation or changes in the marketplace to improve the customer experience.
Our recommendations to policymakers:
- Encourage customers to contact their supplier before filing a complaint with the Commission. Allowing the supplier an opportunity to resolve the customer’s concern promotes customers’ rights to be heard and to receive redress while conserving the Commission staff’s time and resources.
- Develop and publish a supplier report card on the Commission’s website, inclusive of regulated utilities supplying default service customers, and retail suppliers serving shopping customers.
Right to a Healthy Environment. Consumers have a right to live in communities that promote the well-being of present and future generations. The right to a healthy environment also means that consumers should have access to information about a supplier’s business practices, including any environmental, social and corporate governance practices. Customers have a right to do business with companies that reflect their personal values.
Our pledge:
- Publish information about our environmental, social, and corporate governance practices.
- Publish information on our privacy policy that describes the type of information we collect and how we may use and disclose such information, as well as consumers’ ability to control certain uses.
- Adopt diversity, equity and inclusion policies that reflect our company values.
- We will publish our contractor, vendor and supplier policies that reflect our company values and commitment to ethical standards.
Our recommendations to policymakers:
- Launch a supplier training program to be administered annually to all active suppliers in the market to engage in an open dialogue on consumer protection regulations and other applicable rules.
- Establish or increase (where a bonding requirement already exists) the supplier bonding requirement at a minimum of $500,000 to ensure that reputable companies are doing business in the market.
- Establish a supplier licensing fee of $5,000 per license due at the time of license application to ensure adequate resources to process and review license applications.
- Support the deployment of advanced metering infrastructure (“AMI” or “smart meters”) and support efforts to make AMI data available to retail energy providers to support consumer choices and to better align the wholesale and retail market in furtherance of principles of cost causation.
