Urging State Authorities to Take Steps to Prevent Unfair and Deceptive Acts or Practices by Local Distribution Companies, Their Affiliates, Their Subsidiaries, and Marketers or Brokers of Gas Services in the Emerging Competitive Gas Market
WHEREAS, legal, regulatory and market forces are driving the pricing and provision of gas services in the United States;and

WHEREAS, the unbundling of interstate pipeline services as a result of the Federal Energy Regulatory Commission’s (FERC’s) implementation of Order No. 636 has precipitated moves at the state level to unbundle gas services currently being provided to retail gas customers by local distribution companies; and

WHEREAS, regulators in several states already have expanded the availability of transportation services for non-residential customers, and either encouraged or sanctioned the unbundling of sales, transportation and other gas-related services for residential customers, and there are limited programs for residential customers in certain states; and

WHEREAS, it is expected that activities of gas sellers, marketers, and brokers, and marketing activities of local distribution companies (LDCs) or their affiliates will increase significantly with the onset of unbundling of gas services, and the availability of gas purchase options from third-parties; and

WHEREAS, as a result of unbundling of gas services at the state level, gas customers may be faced with a variety of vendor choices with regard to the purchase of gas and other gas services; and

WHEREAS, it is anticipated that as the unbundling of gas services expands, and vendors solicit gas sales contracts from additional customers, customers may be subjected to unfair and deceptive acts or practices and anti-competitive practices with regard to gas sales and other service contracts; and

WHEREAS, consumers may not be adequately protected in the new competitive arena because gas sellers, marketers and brokers may not be subject to the regulatory authority of state commissions; and

WHEREAS, there may be inadequate protections for consumers in the event of unfair or deceptive solicitation, billing and collection activities because exiting state consumer protection laws may not be sufficiently inclusive of the selling activities of gas sellers, brokers and marketers; and

WHEREAS, unfair and deceptive acts or practices in the unbundled gas services market would lead to many of the same consumer problems experienced by customers in the long distance and information service segments of the telecommunications industry, as described in NASUCA Resolution 1995-04.

THEREFORE, BE IT RESOLVED, that NASUCA calls upon state authorities to enact policies and safeguards in the emerging competitive gas market that fully protect customers and ensure consumer choice; and

BE IT FURTHER RESOLVED, that NASUCA calls upon state authorities to take steps to prevent unfair and deceptive acts or practices in the emerging competitive gas market, including the enforcement of existing consumer protection laws with regard to the activities of unregulated entities, and the application of state regulatory enforcement authority to the activities of regulated entities; and

BE IT FURTHER RESOLVED, that NASUCA urges state authorities, including legislators, regulators, state Attorney Generals and other state agencies with consumer protection responsibilities to (1) conduct a review of existing laws and regulations to determine the appropriate spheres of authority concerning the activities of seller, brokers and marketers of gas sales and other services, and (2) to seek the enactment of any laws or regulations deemed necessary to ensure full and adequate protection of customers; and

BE IT FURTHER RESOLVED, that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with 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

June 25, 1996

Chicago, Illinois

Submitted by:

NASUCA Gas Committee

Craig R. Burgraff (PA), Chair
Judith Appel (NJ)
Barbara Burton (DC)
Paula Carmody (MD)
Denise C. Goulet (PA)
Byron Harris (WV)
Werner Margard (OH)
M. Shawn McMurray (AR)
Doug Micheel (MO)
Ron Polle (IA)
Richard Steeves (CT)
Jim Stetson (MA)
Dianne Wells (CO)
Hana Williamson (SC)
Eric Witkowski (NV)