Urging the Adoption of Standards to Protect Consumers
as Part of Any Electric Restructuring Legislation or Regulations

WHEREAS, reliable and affordable electric service is a basic necessity of modern life;

WHEREAS state utility commissions have traditionally exercised authority over pricing and reliability of retail electric power supply and delivery by public utilities and have developed a comprehensive framework of consumer protections through regulations and policies;

WHEREAS, the Federal Energy Regulatory Commission has recently adopted policies introducing competition into some aspects of the electricity marketplace;

WHEREAS, numerous State legislatures and public utility commissions have adopted or are considering the adoption of policies which would unbundle retail electric services, open power supply and other services to a competitive marketplace, and continue or modify the regulation of delivery services by monopoly public utilities;

WHEREAS, if the electric industry is restructed, electric customers may be faced with a variety of vendor choices with regard to the purchase of power supply and other electric services;

WHEREAS, it is expected that activities of power suppliers, marketers, and brokers (together, “third-party providers”) and marketing activities of incumbent electric utilities or their affiliates will increase significantly as unbundling of retail electric services occurs, and as the availability of electric purchase options increases from third parties;

WHEREAS, existing state utilities regulations and consumer protection laws may not provide adequate consumer protections addressing the selling activities of third-party providers and the activities of incumbent electric utilities or their affiliates after restructuring;

WHEREAS, there will be a need for mechanisms to investigate and enforce compliance with consumer protection requirements, and for reasonable dispute resolution of consumer complaints by a neutral third party;

WHEREAS, it is anticipated that as the unbundling of electric services occurs, and third-partyproviders solicit service contracts from customers, customers may be subject to unfair, deceptive, unconscionable, or anti-competitive practices with regard to power supply and other service contracts;

WHEREAS, third-party providers may require access to customer usage and related information to effectively market to and serve retail customers, yet at the same time, consumers should be able to establish their rights to privacy about specific customer information;

WHEREAS, minimum standards are needed to assure reasonable billing and business practices, and reliable and safe service from third party providers;

WHEREAS, accurate consumer informational and educational materials are needed so customers can understand their choices and the terms of services offered;

WHEREAS, unfair or deceptive business practices, anticompetitive acts, privacy concerns, informational needs and reliability needs may be issues of particular importance to residential and small business electricity customers;

WHEREAS, effective consumer protections will promote public confidence in the competitive retail electric marketplace; and

WHEREAS, effective consumer protections will increase the efficiency of a competitive retail electricity marketplace, as they do in other competitive retail markets;

THEREFORE, BE IT RESOLVED, that NASUCA supports the establishment of appropriate and adequate consumer safeguards to protect customers during any transition to and the operation of any restructured retail electricity marketplace;

BE IT FURTHER RESOLVED, that NASUCA believes such safeguards should include at least the following requirements:

Consumer information and education:

a. A comprehensive consumer education and outreach program should be carried out to minimize public confusion and provide information so consumers are able to make informed choices and participate effectively in a restructured electric market.

b. Plain language providing full and verifiable information must be presented to consumers by competitive providers of electric service in writing, using uniform words and phrases having the same meanings, before any contract or agreement for service may be entered into, so that customers may make accurate comparisons among providers as to price, duration of contract, quantities, and other material terms;

Benefits to all consumers:

c. So that all consumers benefit from restructuring, utility service must be available to all customers under terms and conditions and at rates at least as attractive as those found just and reasonable prior to any implementation of retail competition and access should be afforded to a default provider at a reasonable price in situations where no alternative provider offers an economically attractive price to customers in a particular geographical area or customers with particular usage levels or credit histories or if the customers do not choose a provider, and in other circumstances;

Protection from undue discrimination:

d. Means to prevent undue discrimination by electric service vendors and utilities against certain residential customers or customer groups because of differences in income or other personal or household characteristics, and to prohibit undue discrimination among otherwise similar customers with regard to prices, access to service, credit and collection policies, and customer service;

Service reliability:

e. Certification, registration, and bonding requirements to assure that third party providers have the necessary financial and technical resources and commitments to meet business and customer obligations and to assure the provision of reliable and safe service;

f. Provisions to ensure continuity of service at a reasonable price if the customer’s provider suddenly ceases operations;

Enforcement and complaint resolution:

g. Mechanisms to investigate and enforce compliance with consumer protection requirements and for customer access to a reasonable dispute resolution mechanism administered by a neutral party;


h. Appropriate maintenance of privacy of confidential custom account information;

Code of conduct for third-party providers and affiliated utility vendors:

i. Standards for what a provider is permitted to demand as a deposit or late payment fee;

j. A minimum notice period prior to discontinuation of supply service, and special procedures to be followed during extreme weather periods and if the customer is elderly or disabled;

k. Prompt resumption of electrical supply at a reasonable price after the customer pays an outstanding bill or enters into a reasonable payment plan;

l. A reasonable limitation on back-billing;

m. Prohibitions against and procedures to correct the unauthorized transfer of service from one service provider to another and the unauthorized provision of additional services, practices known in the telephone marketplace as “slamming” and “loading”; and

n. Prohibitions against unfair, deceptive, or unconscionable business practices by any provider, including but not limited to advertising on the basis of false or misleading statements regarding environmental impacts or resource mix;

BE IT FURTHER RESOLVED, that NASUCA calls upon legislative and regulatory authorities to enact policies and safeguards in any restructured electric power market that fully protect consumers;

BE IT FURTHER RESOLVED, that NASUCA calls upon legislative and regulatory authorities to take steps to prevent fraudulent or deceptive business practices in any restructured electric power market and to prosecute providers that violate state and federal consumer protection laws;

BE IT FURTHER RESOLVED, that NASUCA calls upon legislative and regulatory authorities to ensure that appropriate state offices including state consumer advocate offices have adequate authority and resources to protect consumers; and

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 pursuant to this resolution.

Approved by NASUCA

Charleston, South Carolina

June 11, 1997

Submitted by:

NASUCA Electricity Committee

Larry Frimerman (OH), Chair
Rajnish Barua (DE)
Anne Becker (IN)
Barry Cohen (OH)
Nancy Vaughn Coombs (SC)
Steve Corneli (MN)
Anne Curtin (NY)
George Dean (MA)
Jennifer Duane (DC)
William Fields (MD)
Margaret Force (NC)
Walker Hendrix (KS)
Bruce Johnson (CT)
Robert Kelter (IL)
Lewis Mills (MO)
Thomas Nicholson (VA)
Charles Noble (NM)
Gerry Norlander (NY)
Mark Payne (NC)
William Perkins (ME)
Blossom Peretz (NJ)
Irwin Popowsky (PA)
Fred Schmidt (NV)
Lynda Spears (IN)
Ben Stead (IA)
Kenneth Traum (NH)