FERC Filings

COMMENTS OF THE ELECTRIC POWER SUPPLY ASSOCIATION-Comments Regarding Retail Electric Competition-V010003

II. Switching Requirements

There are several aspects of switching rules that are critical to the successful development of retail markets. Uniform business rules for switching customer accounts are necessary for a properly functioning competitive marketplace. High exit fees are a significant barrier to competitive suppliers in developing markets, since high customer acquisition costs discourage participation in retail markets. Lengthy notice periods before consumers can switch to a new electricity supplier also pose a threat to market entrants. Another important issue associated with customer switching policy is whether a customer must provide signed authorization before their distribution company may switch them to another supplier. A signed authorization has often been viewed as the best method to prevent “slamming.” However, signature requirements provide a significant advantage to existing utilities, as the signature acts as a barrier to contracts with competitive suppliers. If a customer initiates contact with its distribution company to authorize the switch and provides identifying information, additional barriers to finalize this transaction should not be imposed. The distribution company’s only obligation should be to record the change for billing purposes.

Customers who are solicited by a supplier to switch should not be switched until the new supplier obtains authorization in one of three methods: oral verification by an independent third-party, electronic verification or written authorization.