Understanding Drop Notifications.
First, it is important to understand the logistics behind the drop notification you just received from your supplier or broker. When a supplier enrolls a new customer for electric or natural gas supply service, the “switch” is initiated by the customer’s local utility company. In fact, this is how it works:
1. Supplier Notifies the Utility
When a customer signs a supply agreement with a retail provider, the supplier notifies their local utility of the specific utility accounts it will be supplying, and when that supply will commence.
2. Utility Makes the Switch
Next, after the utility receives the requests from the supplier, it initiates the “supplier switch” for the customer’s utility accounts. Whether the customer is currently on utility default supply or with another supplier does not matter. Once the utility receives the switch request, it puts through the order.
Note: If the customer decides to move away from a supplier and back to utility default service, then the same switch occurs. In this case, the switch is from a supplier to a utility.
3. Drop Notification
If the customer was getting service from another supplier prior to switching, then the previous supplier will receive a drop notification from the utility company. The drop notification indicates the specific utility accounts that are being switched to a new supplier, or back to the local utility. This poses a threat to suppliers, brokers, and customers if the customer is still under contract with that supplier.
Here’s How To Handle a Drop Notification.
If you happen to receive a drop notification from a supplier or your energy broker, there are several action steps you must take in order to save the customer from receiving an early termination fee. If the customer is no longer under contract, they will not receive an early termination fee; however, taking these steps can help you to save the customer anyway.
1. Contact Your Customer ASAP!
The most important thing is to drop everything you are doing and contact your customer immediately. Drop notifications are time-sensitive. If your customer is under contract with a supplier and did not mean to switch, you can get them re-enrolled on their contract rate in the same billing period (see more about Drop Notifications here). If you wait, you could miss a billing period and subject the customer to price risk.
2. Find Out If The Drop Is Legitimate
Unfortunately, there are some energy brokers and suppliers that do not play by the rules. Some suppliers have received multi-million dollar fines for “slamming” customer accounts. Slamming occurs when a supplier fraudulently enrolls a utility account for supply without the customer’s consent.
Many times, a drop notification can trigger an error – the customer’s account(s) were slammed by another supplier, the customer changed account numbers, or the customer unknowingly agreed to switch to another supplier over the phone.
In all of these cases, the customer can be re-enrolled easily onto their existing supply service.
3. Take the Required Action
Each supplier has a different process for re-enrolling dropped utility accounts. If the drop was not intentional, many suppliers will ask your customer to sign a re-enrollment or re-instatement form confirming their intention to honor the existing contract.
Other suppliers will take the broker’s word for the unintentional switch, while others may want an email from the customer stating their intention to remain on the existing contract.
Pro Tip: Whatever the process might be, it is critical to act quickly. Remember, drop notifications are time sensitive and can be rectified if acted upon in a timely manner.
| Drop Reason | Action |
|---|---|
| New Account | Sign Re-Enrollment Form with New Account No. |
| Slammed | Sign Re-Enrollment Form Confirming Service |
| Switched by Mistake | Sign Re-Enrollment Form Confirming Service |
| Switched on Purpose | Subject to Early Termination Fees |
