Urging Jurisdictions Introducing the Competitive Provision of Electricity or Natural Gas Service to Assure the Continued Availability of Reliable Service to Customers from a Default Service Provider at Just and Reasonable Rates.

Whereas, residential consumers in some states and the District of Columbia may be participating in competitive markets for all or a portion of the electric or natural gas service previously supplied to all consumers by a single utility; and

Whereas, the introduction of competitive markets for the provision of electric or natural gas service to residential customers does not alter the essential nature and necessity of the service; and

Whereas, with the introduction of competitive electric or natural gas service, most jurisdictions have recognized the likelihood that the migration of all customers to a competitive supplier is not likely to occur, if at all, in the short term; and

Whereas, the introduction of competition does not diminish the essential role which continued electric or natural gas service plays for residential households or the unacceptability of any customer having fewer opportunities to obtain service or greater hardship than would have existed before the introduction of competition; and

Whereas, a service provider (variously termed Standard Offer Service Provider, Default Service Provider, Supplier of Last Resort or Provider of Last Resort) is required to preserve service for customers that do not migrate to competitive service or lose their competitive service; and

Whereas, residential customers participating in these competitive markets should have access to a regulated service that is comparable or equivalent to the service previously available;

THEREFORE BE IT RESOLVED, that NASUCA urges each jurisdiction which introduces competitive markets for the provision of elements of electric or natural gas service to design such markets so that:

At least one provider (“the Default Service Provider”) is required by law to offer continued electric or natural gas service under terms and conditions that are comparable to those that existed prior to the onset of retail competition;

The service provided by such Default Service Provider is a regulated service provided pursuant to the regulatory jurisdiction of the state and under just and reasonable rates approved by the regulatory authority and in compliance with standards of service and performance that are defined by the regulatory authority.

The Default Service Provider is equipped and able to assure that the rates, terms and conditions, reliability and quality of customer service offered to such customer are no worse with such service than they would be with traditional utility service;

The rates charged by such Default Service Provider are stable and predictable over the long term and that the rates or formulas to determine such rates are approved only after appropriate notice to the public, consumers, and adequate administrative review;

The Default Service Provider shall not simply pass through wholesale spot market rates for the energy or gas commodity portion of Default Service, and shall be required to take prudent measures to provide least cost service and assure long term rate stability, through various means including but not limited to competitive bid, bilateral contract, or provider-owned generation or supplies;

All customers (including those whose supplier has defaulted or who are unable to obtain service from competitive suppliers) have access to Default Service without additional fees, charges, entry barriers, or higher prices compared to those customers who do not shop or seek to enter the competitive market.

The rates for Default Service are not increased solely for the purpose of stimulating the development of competition;

If the Default Service Provider is not the distribution company, it must have the obligation under state law to maintain the safe, adequate and continued provision of each element of service it provides, equivalent to the obligation of the distribution company to provide its services;

The service provided by the Default Service Provider be identified on the customer’s bill and in consumer education and information materials in a manner that allows the customer to compare such service with offers in the competitive market;

All customers in the jurisdiction are periodically advised of the availability of service from such Default Service Provider as well as alternative providers and of the terms on which such services are offered;

Any public information campaign to advise customers of the availability of competitive service shall also advise customers of the availability of service from such Default Service Provider and of the identity and contact information for information about the rates, terms and conditions of default service.

BE IT FURTHER RESOLVED, that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall advise the membership of any proposed action prior to taking action if possible. In any event the Executive Committee shall notify the membership of any action taken pursuant to this resolution.

Approved by NASUCA: Submitted by:

June 19, 2002 Electricity Committee
Gerald A. Norlander, Chair

Gas Committee
Byron Harris, Chair