Prohibits suppliers of natural gas or electric service from changing a customer's supplier of gas or electric service (commonly known as "slamming") unless such supplier complies with requirement established by the public service commission; authorizes the commission to establish requirements for customer consent; makes enforcement provisions to punish violators of slamming requirements.
TITLE OF BILL: An act to amend the public service law, in relation to unauthorized changes in suppliers of natural gas and electric service
PURPOSE OR GENERAL IDEA OF BILL: To prohibit unauthorized changes in suppliers of natural gas or electric service and to establish additional enforcement methods.
SUMMARY OF SPECIFIC PROVISIONS: This bill would amend Section 65 of the Public Service Law to prohibit a supplier of natural gas or electricity from making or directing an unauthorized change in gas or electric service, commonly known as slamming. This bill would further authorize the Public Service Commission (PSC) to establish requirements for obtaining the authorization of a customer to effect a change in the customer's supplier of gas or electric service and for the verification of such change.
This bill would also authorize the PSC to punish violators of slamming requirements by seeking a judicial penalty under Public Service Law Section 25 or an administrative penalty not to exceed $1,000 for every violation associated with each meter service point, and by seeking injunctive relief. Section 25 of the Public Service Law currently authorizes penalties, subject to judicial discretion, in amounts not to exceed $100,000 per offense.
The PSC currently requires Energy Service Companies (ESCOs) to establish procedures to obtain authorization of customers for a change in gas and electric service and for the verification of such change, as a condition of eligibility to serve customers in New York State. Such eligibility may be revoked by the PSC if the ESCO fails to comply with service requirements. Natural gas local distribution companies require a written authorization or a verified oral declaration by a customer prior to a change in supplier and may deny transportation of gas on their systems to a marketer that fails to obtain the necessary authorizations.
JUSTIFICATION: Competition in the electric and gas industries will provide many new benefits for consumers, but experience gained from the deregulation of the telephone industry also suggests that the unauthorized change in gas or electric service, known as slamming, may be a concern with the deregulation of the electric and gas industries. Unauthorized changes in electric and gas service are deceitful business practices which anger consumers, who object to the loss of control over their choice of supplier and the inconvenience involved in returning to their original supplier.
FISCAL IMPLICATIONS: Increased revenue to general fund resulting from administrative and judicial penalties.
EFFECTIVE DATE: This bill will take effect 120 days after it shall have become law.
STATE OF NEW YORK ________________________________________________________________________ 6455 IN SENATE February 10, 2012 ___________Introduced by Sen. KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommuni- cations AN ACT to amend the public service law, in relation to unauthorized changes in suppliers of natural gas and electric service THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 65 of the public service law is amended by adding a new subdivision 14 to read as follows: 14. UNAUTHORIZED CHANGES IN NATURAL GAS OR ELECTRIC SERVICE PROHIBIT- ED. (A) NO SUPPLIER OF GAS OR ELECTRIC SERVICE OR ANY PERSON, FIRM OR CORPORATION ACTING AS SUCH SUPPLIER'S AGENT OR REPRESENTATIVE SHALL ON BEHALF OF A CUSTOMER MAKE OR DIRECT ANY CHANGE IN A SUPPLIER OF GAS OR ELECTRIC SERVICE UNLESS SUCH SUPPLIER, AGENT OR REPRESENTATIVE COMPLIES WITH REQUIREMENTS TO AUTHORIZE AND VERIFY THE CHANGE. THE COMMISSION SHALL HAVE THE AUTHORITY TO ESTABLISH REQUIREMENTS FOR OBTAINING THE AUTHORIZATION OF A CUSTOMER TO EFFECT A CHANGE IN THE CUSTOMER'S SUPPLI- ER OF GAS OR ELECTRIC SERVICE AND FOR THE VERIFICATION OF SUCH CHANGE. IN CONSTRUING AND ENFORCING THE PROVISIONS OF THIS SUBDIVISION, THE ACT OF ANY PERSON, FIRM OR CORPORATION ACTING AS AN AGENT OR REPRESENTATIVE OF A SUPPLIER OF GAS OR ELECTRIC SERVICE SHALL BE DEEMED TO BE THE ACT OF SUCH SUPPLIER OF GAS OR ELECTRIC SERVICE. FOR THE PURPOSES OF THIS SUBDIVISION, "SUPPLIER OF GAS OR ELECTRIC SERVICE" SHALL INCLUDE ANY PERSON, FIRM OR CORPORATION THAT OFFERS, SELLS OR DELIVERS ALL OR PART OF NATURAL GAS OR ELECTRIC SERVICE, INCLUDING, BUT NOT LIMITED TO, A GAS OR ELECTRIC DISTRIBUTION COMPANY, A GAS OR ELECTRIC CORPORATION, A GAS OR ELECTRICITY PROVIDER, MARKETER, AGGREGATOR OR BROKER. (B) THE FAILURE TO COMPLY WITH THE PROVISIONS IN THIS SUBDIVISION SHALL SUBJECT A SUPPLIER OF GAS OR ELECTRIC SERVICE TO EITHER THE JUDI- CIAL PENALTY AUTHORIZED IN SECTION TWENTY-FIVE OF THIS CHAPTER FOR THE FAILURE OR NEGLECT TO OBEY OR COMPLY WITH A PROVISION OF THIS CHAPTER OR THE ADMINISTRATIVE PENALTY ESTABLISHED IN THIS SUBDIVISION. IN SEEKING SUCH JUDICIAL PENALTY OR ASSESSING SUCH ADMINISTRATIVE PENALTY, THE COMMISSION SHALL TAKE INTO ACCOUNT THE NATURE, CIRCUMSTANCES, EXTENT,EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00743-01-1 S. 6455 2
GRAVITY AND NUMBER OF THE VIOLATIONS, AND WITH RESPECT TO THE VIOLATOR, THE DEGREE OF CULPABILITY, ANY HISTORY OF PRIOR OFFENSES AND REPEATED VIOLATIONS, AND SUCH OTHER MATTERS AS MAY BE APPROPRIATE AND RELEVANT. THE REMEDIES PROVIDED BY THIS SUBDIVISION SHALL BE IN ADDITION TO ANY OTHER REMEDIES PROVIDED BY LAW. (C) THE COMMISSION, AFTER OPPORTUNITY FOR A HEARING, SHALL HAVE THE AUTHORITY TO ASSESS DIRECTLY AN ADMINISTRATIVE PENALTY AGAINST ANY SUPPLIER OF GAS OR ELECTRIC SERVICE FOR EACH VIOLATION OF THIS SUBDIVI- SION OR ORDER OF THE COMMISSION IMPLEMENTING OR ENFORCING THE PROVISIONS OF THIS SUBDIVISION. SUCH PENALTY SHALL NOT EXCEED ONE THOUSAND DOLLARS FOR EACH VIOLATION ASSOCIATED WITH EACH METER SERVICE POINT. ALL MONEYS RECOVERED FROM ANY ADMINISTRATIVE PENALTY SHALL BE PAID INTO THE STATE TREASURY TO THE CREDIT OF THE GENERAL FUND. (D) WHENEVER THE COMMISSION DETERMINES THAT ANY SUPPLIER OF GAS OR ELECTRIC SERVICE IS VIOLATING OR ABOUT TO VIOLATE ANY PROVISION OF THIS SUBDIVISION OR ANY REGULATION OR ORDER OF THE COMMISSION IMPLEMENTING OR ENFORCING THE PROVISIONS OF THIS SUBDIVISION, OR HAS FAILED TO PAY ANY PENALTY ASSESSED PURSUANT TO THE PROVISIONS OF THIS SUBDIVISION, THE COMMISSIONER SHALL HAVE POWER TO BRING AN ACTION OR ENFORCEMENT PROCEED- ING AS PROVIDED BY SECTION TWENTY-SIX OF THIS CHAPTER. S 2. This act shall take effect on the one hundred twentieth day after it shall have become a law; provided, however, that effective immediately, the addition, amendment and/or repeal of any rule or regu- lation necessary for the implementation of this act on its effective date are authorized and directed to be made and completed on or before such effective date.