Are You Fully Compliant?

Utility Commission Rules Are Not the Only Rules that Need to Be Followed

By Michael A. Gruin, Esq.  

Suppliers correctly focus considerable attention on complying with state utility commission regulations for marketing and customer enrollment.  After all, state public utility commissions are the agencies that license suppliers, enact rules about the competitive market, and hear complaints from consumers.  However, when putting together marketing training and monitoring plans for a new state, suppliers cannot overlook the many state legal requirements that are enacted and enforced by agencies other than state utility commissions. 

For example, many de-regulated states have laws pertaining to door- to- door sales and/or telephone sales that contain requirements that go above and beyond the enrollment requirements of the state utility commission.  These laws may contain additional requirements for lawfully completing a sale, such as the inclusion of a cancellation notice in the enrollment paperwork, or additional restrictions on sales presentations that differ from the utility commission’s regulations.  These laws are typically enforced by the state attorney general, who has the ability to bring civil actions and seek penalties and fines against companies that violate these requirements.   Even if a supplier is fully complying with the letter of the state utility commission’s regulations, the supplier or its marketing vendor could still be in violation of state statutes regarding unfair trade practices, door-to-door sales, or telephone sales.

Local permitting compliance is also important.   Many municipalities have ordinances in place that restrict door-to-door or other in-person forms of sales solicitations.   Sellers may be required to apply for permits days or weeks in advance of the sales activity.  Failure to do so could result in sales agents being detained and cited by local police – which is obviously not the impression that a supplier wants to make in a community.   Suppliers must have policies in place to ensure that their internal sales team or external sales contractors are complying with all local permitting ordinances when conducting in-person sales.

Other non-utility commission rules that suppliers must comply with include state-specific telemarketing registration requirements, and annual state tax and registration reporting requirements.  In some states, all companies that are registered to do business are required to file annual reports with the department of state in addition to the public utility commission.  Failure to do so could cause the supplier’s business license to lapse – which would likely put the supplier in default with lenders, at least temporarily.

To ensure full compliance, suppliers should develop a checklist for compliance beyond state utility regulations for each state in which they operate, which includes:

  • Determining whether a state has a specific door-to-door or telephone sales statute, and if so, building policies for compliance with the statute;
  • Reviewing the state’s unfair trade practice or consumer protection statute, and ensuring that marketing efforts comply with the statute;
  • Developing a process for ensuring compliance with local sales permitting requirements;
  • Reviewing the state’s telemarketing registration statute and rules, to ensure compliance by internal sales agents and external contractors;
  • Understanding all of the state’s tax reporting requirements, and calendaring tax reporting due dates;
  • Understanding all of the state’s non-utility commission annual registration and reporting requirements, and calendaring due dates for those requirements


Michael A. Gruin, Esq.  /  Stevens & Lee