MINDINGYOURTs & Cs:5 PROVEN STRATEGIES

FOR MITIGATING RISK

IT’S A RUNNING JOKE IN THE ENERGY SECTOR—NOT LONG AFTER A MARKET WELCOMES DEREGULATION, REGULATION’S MORE DIFFICULT RELATIVE – RESTRICTION – MOVES IN NEXT DOOR.

The truth is, ensuring regulatory compliance is no laughing matter. It’s

a matter of being able to sell. With the constant risk of fines, the threat

of losing parts of a book of customers or worse, being shut out of the

market entirely, it’s crucial for companies to get this right.

Since states began allowing consumers to access private open market

power and/or natural gas suppliers in the 1990s after widespread

deregulation (and resulting government interventions) of the

1970s, the power of the Federal Energy Regulatory Commission

(FERC), state public utilities commissions (PUCs) and consumer

advocate groups has grown stronger.

While the market for retail energy providers continue to grow, so

have the barriers to entry. That includes the volume of terms and

conditions energy retailers are required to provide to consumers

as well as disclosure documents.

Minding Your Ts and Cs: Ensuring Regulatory Compliance for Energy Communications

These requirements vary from state to state, making it difficult to manage

communications across multiple markets.

The consequences of failing to properly do so are serious, not only in dollar

amounts, but in lost revenue.

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• The market for energy reselling is experiencing unprecedented growth,

with current market participants growing by 30 percent per year.1

• The deregulated market for natural gas alone is more than $10 billion;

the power market is exponentially greater, according to AEC.

• Thirty-one states currently have some form of deregulation, with

more expected to follow. 2

• Due to reporting and requirements, the time to enter a new market

ranges from several weeks to several months, limiting the potential for

tens of thousands in new revenue.

• PUCs require reporting and filing of more than a dozen separate documents.

• Fines for noncompliance can range from $50,000 to $2 million or more.

• Energy retailers could lose an entire book of clients or find themselves

locked out of an entire market. This could represent a loss of as much

as $100 million in annual revenue.

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WHAT’S AT STAKE

Regulatory fines and lost revenue potential can be a devastating

blow, especially to energy service companies anxious to expand their

customer base in a growing market.

Consider this:

In deregulated markets, complying with state PUCs , and other regulators has become a full-time job

that reaches the highest levels of a company. In some cases, energy markets have been restructured

to promote competition, prompting even stricter oversight to ensure reliability, financial security,

transparency, reasonable prices and safeguards against market manipulation.3

What’s at Stake

CCOs and COOs face the enormous responsibility of ensuring all customer communications and

marketing collateral—from email to social media—meet regulatory standards. That includes disclosing

appropriate terms and conditions to all new customers and keeping track of what was distributed to

customers, when and through which communication channels.

Companies are going to great lengths, and spending top dollars, trying to manage these risks.

For some companies, that means hiring several full-time employees or

re-allocating current ones to perform painstaking, manual processes such as

updating, printing and mailing disclosure documents to new customers daily.

Other companies have invested in expensive

document management systems with a

variety of functionalities they don’t need.

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PROVEN STRATEGIESFOR MITIGATING RISK

These four strategies can help energy remarketers ensure compliance

without overburdening their already limited internal resources.

1. AUTOMATE MANUAL PROCESSES

Terms and conditions required in energy contracts are extensive

and vary by state and market. Many companies have an entire

team responsible for managing customer contracts and

ensuring delivery of all required documents within 48 hours.

For fast-growing companies entering new markets, this is

an onerous burden that can significantly delay market

entry, reducing the potential for new sales.

Having staff tasked with manually inputting terms

and conditions specific to each market is not only

time consuming, it’s also risky.

A single mistake can be compounded thousands oftimes over in mass mailings.

Automation decreases this

risk while increasing efficiency,

allowing companies to enter new

markets more quickly.

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Regulatory compliance is an important matter for operations and it’s crucial for marketing

communications. This adds several layers of complication to multi-state and multi-channel marketing

campaigns. Even if companies outsource the production, printing and distribution of marketing

collateral, they are ultimately responsible for ensuring the accuracy of the information. This may include

state-specific disclaimers that require legal approval.

Unfortunately, many energy companies still rely on manual review methods like email to manage legal review and revisions of marketing documents. Aside from being inefficient, this opens the door to more opportunities for error.

Consider the process for creating a single brochure that must be tailored for customers in a dozen

distinct markets. A marketing manager must secure approval from the business development

managers and legal representatives for each region, as well as approval from the corporate

communications manager and chief compliance officer. Each revised version is passed along through

email. All it takes is one person copied on the email thread to inadvertently pass along the original

version he downloaded instead of the most recently revised version.

It takes the marketing manager several weeks

to secure approval, only to discover the “final”

version still has outdated information. The team

misses the intended deadline for distribution,

delaying the new product launch.

With a shared workflow management system,

these documents can be updated easily, with

all revision history saved and tracked. Sales reps

and other key stakeholders can upload a single

document and easily see who has reviewed it and

what changes have been made.

2. INCREASE DOCUMENT VISIBILITY AMONG KEY STAKEHOLDERS

Proven Strategies for Mitigating Risk

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Energy Retailers are seeing more staff turnover due to shifts in supply and demand in a rapidly changing market.

Institutional knowledge about standards and key processes can be quickly forgotten amid these

changes if it is not written down. And since legal and subject matter experts vary by market and

product, it’s helpful to outline the appropriate chain of approvals required for specific communications

in a shared document that can be edited in real time. Storing important process documents in content

and workflow management systems ensures everyone across your company uses a consistent

approach to manage approvals. And this approach is easily transferred to your new employees.

Terms and conditions change. Make sure you have a process for implementing those changes quickly and seamlessly.

This process is much easier when documents are easily searchable and updated through a

digital database. Be sure your legal department has access to your digital database, and invite a

representative to conduct periodic quality audits to ensure your documents reflect all recent changes.

Each new vendor you invite into your communications adds a layer of complexity and risk potential to the process.

By contrast, relying on a single provider to manage all customer communications and marketing

documents reduces the potential for error.

3. SPELL OUT THE PROCESS

4. MANAGE CHANGES CAREFULLY

5. STREAMLINE VENDORS

Proven Strategies for Mitigating Risk

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THE VALUE OF DATA REGULATORY DOCUMENT MANAGEMENT

DATA Communications Management offers seamless regulatory

document management through a single, secure digital engine that

uses logic to automate communications.

Customers input terms and conditions for each market, followed by customer data that is sorted,

validated and matched with the appropriate information. From there, they can establish workflows

to create, print and deliver the right information to the right customers through our printing and

fulfillment center.

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OBJECTS

DATA FEED

TRANSACTIONAL DM CAMPAIGNS EMAIL DEPLOYMENT

NAME ADDRESS SERVICE ADDR TRANSACTIONS LOGOS T/C EMAIL

Statements

Invoices

CollectionLetters

SPOOLFILE

PDFs for online presentation

EMAILCLOUD

Promo Letter

Postcard

CustomPiece

Statements

Invoices

MarketingCampaigns

Promo’s

Welcome Kits

Our regulatory document management system offers:

The Value of DATA Regulatory Document Management

• DATA ACCEPTANCE AND VALIDATION — Maintaining data

integrity and logic validation

• SINGLE TEMPLATE DESIGN WITH DYNAMIC CONTENT

GENERATION — Communication that redesigns itself dynamically

based on logic

• TERMS & CONDITIONS SINGLE POINT DYNAMIC

UPDATE(S) — Using a data dictionary across various markets and states

• MULTI-CHANNEL DELIVERY CAPABILITY (print/email/SMS)

• DYNAMIC DOCUMENT PROCESSING AND EXECUTION —

Dynamic execution of multiple document types

• PRODUCTION REPORTING FOR ALL CHANNELS

• CONVENIENCE — Customers enter a single file per day which is

parsed and separated by market and state. DATA’s programming system

then identifies which customers need to receive that document and

whether they want to receive it via email or traditional mail.

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Some of North America’s leading energy companies trust our document management system to:

The Value of DATA Regulatory Document Management

• MITIGATE RISK

• INCREASE SPEED TO MARKET from months to days or weeks

and achieve millions of dollars in incremental revenue

• ACQUIRE NEW CUSTOMERS — Design and execute campaigns

that enable them to optimize customer acquisition marketing

• REDUCE COSTS — Adopting an automated process reduces internal

resources needed to manually manage terms and conditions, enabling

those resources to be reallocated where they are needed most and

saving costs elsewhere

Leading ESCO Reduces Time to Market

When a leading energy service company began working with DATA more than

a year ago, its average time to enter a new market was several weeks. The

company also relied on a full-time staff member to manage documents that

took 10 days to complete and file. Using DATA’s regulatory document management system, those

same documents can be completed within a single day. This has decreased the total time to market

to just 7-10 days, allowing the company to grow more quickly, make better use of internal resources,

maintain a competitive advantage and mitigate risk.

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Looking for a solution to your greatest business communications challenges?

Contact Bruce Shields at bshields@datacm.com to start the conversation.

DATA Communications Management is a single-source provider for all

business communications, eliminating the need to work with multiple

vendors on a single project. We have the technology and expertise to

handle all your communications needs and ensure compliance with all

industry regulations.

In addition to regulatory management, our capabilities include:

OUR CAPABILITIES

• COMMERCIAL PRINTING, WIDE-FORMAT

PRINTING, PRINT ON DEMAND, WEB-TO-

PRINT AND MORE

• CONTENT AND WORKFLOW MANAGEMENT

• DATA MANAGEMENT AND ANALYTICS

• DIRECT MARKETING

• EVENT TICKET AND GIFT CARD PRODUCTION

• LABELS AND AUTOMATED ID SOLUTIONS

• LOGISTICS AND FULFILLMENT

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