Prohibits the unauthorized change of a natural gas or electric service provider

BILL NUMBER:S6455

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.