PRINTER'S NO. 224
No. 229 Session of 1999
INTRODUCED BY McCALL, COY, GORDNER, MELIO, WALKO, CURRY, GEORGE, CALTAGIRONE, CAWLEY, GEIST, SEYFERT, MASLAND, TULLI, YUDICHAK, HUTCHINSON, PESCI, CORRIGAN, ARGALL, BELFANTI, SATHER, SANTONI, READSHAW, ALLEN, TANGRETTI, LAUGHLIN, FICHTER, VAN HORNE, RUBLEY, HENNESSEY, FAIRCHILD, PRESTON, JOSEPHS, MICHLOVIC, PLATTS, EACHUS, SAYLOR, TRELLO, CAPPABIANCA, E. Z. TAYLOR, STABACK, DeLUCA, YEWCIC, STEELMAN, TIGUE, GRUCELA, MANDERINO, YOUNGBLOOD, SEMMEL, SURRA, ROEBUCK, RAMOS, SCRIMENTI, CLYMER, BROWNE, PISTELLA, HORSEY, HARHAI AND DALEY, FEBRUARY 1, 1999
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, FEBRUARY 1, 1999
AN ACT 1 Providing customer protections against unauthorized changes in 2 public utility service providers; prohibiting unauthorized 3 changes in customers' selection of public utility service 4 providers; providing procedures for changing public utility 5 service providers, for customer complaints and for 6 enforcement and regulations; imposing duties on the 7 Pennsylvania Public Utility Commission and the Attorney 8 General; and providing penalties. 9 The General Assembly of the Commonwealth of Pennsylvania 10 hereby enacts as follows: 11 Section 1. Short title. 12 This act shall be known and may be cited as the Public 13 Utility Service Provider Customer Protection Act. 14 Section 2. Definitions. 15 The following words and phrases when used in this act shall 16 have the meanings given to them in this section unless the 17 context clearly indicates otherwise:
1 "Aggregator." An entity licensed by the Pennsylvania Public 2 Utility Commission which purchases and takes title to 3 electricity or natural gas, or both, as an intermediary for sale 4 to retail customers. 5 "Broker" or "marketer." An entity licensed by the 6 Pennsylvania Public Utility Commission which acts as an agent or 7 intermediary in the sale and purchase of electricity or natural 8 gas, or both, but which does not take title to such electricity 9 or natural gas. 10 "Commission." The Pennsylvania Public Utility Commission of 11 the Commonwealth. 12 "Customer." A retail purchaser of a public utility service. 13 "Electric generation supplier." An electric generation 14 supplier shall have the meaning given to it under 66 Pa.C.S. § 15 2803 (relating to definitions). 16 "Electric generation service." To sell, acquire and resell 17 or arrange for the sale of electricity to retail customers, 18 including all related services except transmission and 19 distribution service. 20 "Entity in the business of providing a public utility 21 service." Any marketer, broker, aggregator, reseller or 22 affiliate thereof which provides a public utility service to or 23 for the public for compensation. 24 "Federal agency." The Federal Communications Commission, 25 Federal Trade Commission, the Federal Energy Regulatory 26 Commission or any other Federal agency which is responsible for 27 regulatory oversight of a public utility service. 28 "Interexchange telecommunication carrier." A carrier other 29 than a local exchange telecommunications carrier authorized by 30 the Pennsylvania Public Utility Commission to provide long- 19990H0229B0224 - 2 -
1 distance telecommunications services. 2 "Letter of agency." A document signed by a customer, which 3 states and confirms that the customer has selected a particular 4 provider or entity to provide a public utility service. 5 "Local exchange telecommunications company." A carrier 6 authorized by the Pennsylvania Public Utility Commission to 7 provide local telecommunications services. 8 "Natural gas supplier." A person or corporation, including 9 any municipal corporation or other municipal organization, which 10 chooses to provide natural gas supply outside its municipal 11 limits or any other entity which sells natural gas supply to 12 end-use customers utilizing the jurisdictional distribution 13 facilities of the natural gas distribution company or which 14 purchases, brokers, arranges or markets natural gas for sale to 15 end-use customers utilizing the jurisdictional distribution 16 facilities of a natural gas distribution company. The term does 17 not include producers which supply free gas to end-users under 18 the terms of an oil or gas lease. 19 "Natural gas supply service." To sell, acquire and resell or 20 arrange for the sale or resale of natural gas to retail 21 customers, including all related services except distribution 22 service. 23 "Person authorized to act on behalf of a customer." Any 24 person or persons authorized by a customer to initiate a change 25 in such customer's public utility service provider. The person 26 shall be named in a document signed by the customer and filed 27 with the customer's public utility service provider. 28 "Public utility distribution company." Any natural gas 29 distribution company which provides facilities and related 30 services for the jurisdictional distribution of natural gas to 19990H0229B0224 - 3 -
1 retail customers or any electric distribution company as that 2 term is defined in 66 Pa.C.S. § 2803 (relating to definitions). 3 "Public utility service" or "service." Any electric 4 generation service, natural gas supply service or telephone 5 service for which the customer is now or will be permitted to 6 choose the provider of that service. 7 "Public utility service provider" or "provider." Any 8 electric distribution company, electric generation supplier, 9 natural gas distribution company, natural gas supplier, 10 interexchange telecommunications carrier, local exchange 11 telecommunications company, interexchange telecommunications 12 reseller or information service provider or any affiliate 13 thereof or any entity in the business of providing a public 14 utility service which provides such service to or for the public 15 for compensation. 16 "Slamming." The unauthorized change of a customer's public 17 utility service provider. 18 "Telecommunications company." An interexchange 19 telecommunications carrier or a local exchange 20 telecommunications company. 21 "Telecommunications service" or "telephone service." A 22 utility service involving the transmission of messages, provided 23 by an interexchange telecommunications carrier or a local 24 exchange telecommunications company. 25 "Telecommunications service provider." A telecommunications 26 company authorized by the Pennsylvania Public Utility Commission 27 to provide interexchange telecommunications services or local 28 exchange telecommunications services. 29 Section 3. Change in public utility service provider, 30 prohibition. 19990H0229B0224 - 4 -
1 No public utility service provider or entity in the business 2 of providing a public utility service, or any other person, firm 3 or corporation representing such provider or entity, shall 4 submit or execute a change or authorize another provider or 5 entity to make a change in a customer's selection of a public 6 utility service provider except in accordance with this act. 7 Section 4. Telecommunications service providers. 8 (a) Adoption of Federal regulations.--To ensure that a 9 customer's telecommunications service provider is not changed 10 without the authorization of the customer, the commission shall 11 adopt regulations which are consistent with the regulations and 12 any supplements thereto or revisions thereof adopted by the 13 Federal Communications Commission to govern the selection of 14 telecommunications service providers pursuant to section 101(a) 15 of the Telecommunications Act of 1996 (Public Law 104-104, 47 16 U.S.C. § 258) and which permit telecommunications service 17 providers to use any one of the following methods for 18 verification of carrier-initiated change orders: 19 (1) written authorization from the customer; 20 (2) toll-free electronic authorization placed from the 21 telephone number which is the subject of the change order; 22 (3) oral authorization obtained by an independent third 23 party; or 24 (4) an informational package mailed to the customer 25 consistent with 47 CFR 64.1100(d) (relating to verification 26 of orders for long distance service generated by 27 telemarketing) which contains a postage-prepaid postcard or 28 mailer, without receiving a cancellation of the change order 29 from the customer within 14 days after the date of the 30 mailing. 19990H0229B0224 - 5 -
1 (b) Written orders for service.--In accordance with section 2 258 of the Telecommunications Act of 1996, no telecommunications 3 company or person, firm or corporation representing a 4 telecommunications company shall make any change or authorize a 5 different telecommunications company of a customer without 6 having on file a signed, dated order for service from the 7 customer to make any change in the provider of any 8 telecommunications service for which competition has been 9 authorized. All orders for service shall be in the form 10 prescribed under regulations promulgated by the Federal 11 Communications Commission for letters of agency. As provided 12 under Federal law, the telecommunications company shall be 13 responsible for charges associated with disputed changes in 14 telecommunications service for which it cannot produce a signed, 15 dated order for service from the customer. This section applies 16 to all intrastate services for which competition has been 17 authorized. 18 (c) Liability of telecommunications company.--Any 19 telecommunications company that initiates an unauthorized change 20 in a customer's telecommunications provider shall be liable to 21 the telecommunications company previously selected by the 22 customer in an amount equal to all charges paid by the customer 23 after the unauthorized change. 24 Section 5. Procedures for changing providers of electric 25 generation services and natural gas supply 26 services. 27 (a) Duty of distribution company.--When a customer or a 28 person authorized to act on the customer's behalf orally 29 contacts an electric distribution company or a natural gas 30 distribution company to change a public utility service 19990H0229B0224 - 6 -
1 provider, the distribution company shall tell the customer to 2 contact the public utility service provider he selected to 3 supply the relevant public utility service in order to initiate 4 a change in provider. 5 (b) Duty of providers of electric generation service and 6 natural gas supply service.--When a customer or a person 7 authorized to act on the customer's behalf contacts a provider 8 of electric generation service or natural gas supply service, as 9 the case may be, to request a change in provider and the 10 contacted provider receives direct oral or written authorization 11 confirming such change from the customer, the contacted provider 12 shall: 13 (1) Notify the appropriate public utility distribution 14 company of the customer's request to change the relevant 15 public utility service provider. Such notification shall be 16 made by the end of the business day next following the day 17 the customer contacted the public utility service provider. 18 (2) Upon receipt of notification pursuant to paragraph 19 (1), the public utility distribution company shall mail a 20 confirmation letter to the customer explaining the proposed 21 change in the customer's public utility service provider. The 22 confirmation letter shall be mailed to the customer by the 23 end of the business day next following the receipt of 24 customer notification. The confirmation letter shall: 25 (i) Inform the customer that receipt of the 26 confirmation notice affirms his intent to select a new 27 provider of the public utility service. 28 (ii) Inform the customer of the public utility 29 service which will be changed as a result of his 30 selection of a new public utility service provider. 19990H0229B0224 - 7 -
1 (iii) Advise the customer of the ten-day 2 cancellation period during which the customer may cancel 3 the request for change in public utility service 4 provider. The ten-day cancellation period shall begin on 5 the day the confirmation notice is mailed to the 6 customer. 7 (iv) Inform the customer of the date on which the 8 service with the new public utility service provider will 9 commence. When feasible, the change in public utility 10 service provider shall be made at the beginning of the 11 first billing period following the cancellation period. 12 Section 6. Procedures applicable to all public utility 13 services. 14 (a) Written orders for service.--In any case where a public 15 utility service provider obtains a written order for service, 16 such written order shall thoroughly inform the customer of the 17 nature and extent of the change in public utility service 18 provider. The customer by signing the written order for service 19 shall indicate a full understanding and acceptance of the 20 relationship being established with the public utility service 21 provider. The customer shall be provided with a copy of the 22 signed order for service. When a written customer solicitation 23 or other document contains a letter of agency authorizing a 24 change in a public utility service provider, in combination with 25 other information including, but not limited to, inducements to 26 customers to purchase a public utility service, the solicitation 27 shall include a separate document the sole purpose of which 28 shall be to explain the nature and extent of the change in 29 public utility service provider. If any part of a mailing to a 30 prospective customer is in a language other than English, any 19990H0229B0224 - 8 -
1 written authorization contained in the mailing shall be sent to 2 the same prospective customer in the same language. 3 (b) Retention of records.--Each public utility service 4 provider shall retain records relating to a change in a public 5 utility service provider for at least two years from the date 6 such change was effected. Such records shall be made available 7 to the customer, the Attorney General, the commission and 8 representatives of any Federal agency upon request. 9 (c) Third-party verification company, criteria.--Any third- 10 party verification company used by a public utility service 11 provider to verify the change in a customer's public utility 12 service provider shall meet each of the following criteria: 13 (1) A third-party verification company shall be 14 independent from the public utility service provider which 15 seeks to provide the customer's new service. 16 (2) A third-party verification company shall not be 17 managed, controlled, directed or owned wholly or in part by 18 the public utility service provider which seeks to provide 19 the new service or by any corporation, firm or person who 20 directly or indirectly has any interest, financially or 21 otherwise, in the public utility provider. 22 (3) A third-party verification company shall operate 23 from facilities which are physically separate from those of 24 the public utility service provider which seeks to provide 25 the customer's new service. 26 (4) A third-party verification company shall not derive 27 commissions or compensation of any kind based upon the number 28 of confirmed sales. 29 (d) Notice of billing.--Whenever there is a change in a 30 customer's selection of a public utility service provider, there 19990H0229B0224 - 9 -
1 shall be a conspicuous notice of such change on the initial 2 customer's bill for that public utility service. Such notice 3 shall be in the following form: 4 NOTICE: Your (type of service) provider has been changed 5 from (name of prior provider) to (name of current provider). 6 Cost of change: $ 7 YOU MAY REQUEST INFORMATION REGARDING THE DATE ON WHICH 8 THE CHANGE WAS AGREED TO AND THE NAME OF THE PERSON WHO 9 AUTHORIZED THE CHANGE. 10 (e) Notice to provider.--If a customer's public utility 11 service provider is changed without authorization and the 12 customer notifies the public utility service provider within 90 13 days that he did not authorize the change in his public utility 14 service provider and does not wish to change such provider, the 15 customer shall be switched back to his original provider at the 16 expense of the public utility service provider which initiated 17 the change. 18 (f) Violation by unaffiliated reseller.--No public utility 19 service provider may be found to be in violation of this act 20 solely on the basis of a violation of this act by an 21 unaffiliated reseller of that provider's services or facilities. 22 Section 7. Enforcement by commission, regulations, customer 23 complaints and guidelines. 24 (a) Regulations.--The commission shall enforce the 25 provisions of this act and shall adopt and promulgate 26 regulations to carry out the provisions of this act. The 27 regulations shall include, but not be limited to, procedures to 28 govern the resolution of customer complaints concerning an 29 unauthorized change in a customer's selection of a public 30 utility service provider. Such procedures shall: 19990H0229B0224 - 10 -
1 (1) Prescribe a period of time, not in excess of 120 2 days, for a public utility service provider to resolve 3 customer complaints. 4 (2) Provide for the filing of complaints concerning an 5 unauthorized change in a customer's public utility service 6 provider to the provider which initiated the change. 7 (3) Provide for the filing of complaints which remain 8 unresolved after the time period for resolution established 9 by the commission to the commission, the Attorney General or 10 a Federal agency. 11 (4) Contain provisions to require public utility service 12 providers to provide their customers and the general public 13 information on "slamming" as an illegal act and of the 14 provisions of this act. Such notice may be accomplished by 15 inserting informational literature in customers' bills or by 16 placing periodic advertisements in general circulation 17 newspapers. 18 (b) Resolution of complaints.--If a public utility service 19 provider fails to resolve a customer complaint within the time 20 period prescribed by the commission, within ten days following 21 the end of such time period the public utility service provider 22 shall: 23 (1) Notify the customer in writing of the customer's 24 right to file a complaint with the commission concerning the 25 unresolved complaint and all other remedies available to the 26 customer concerning the alleged unauthorized changes. 27 (2) Inform the customer in writing of the procedures 28 prescribed by the commission for filing a complaint with the 29 commission. 30 (3) Provide the customer a copy of any evidence in the 19990H0229B0224 - 11 -
1 provider's possession showing that the change in the 2 customer's public utility service provider was submitted or 3 executed in accordance with this act. 4 (c) Resolution by commission.-- 5 (1) The commission shall provide a simplified process 6 for resolving complaints under subsection (b). The simplified 7 process shall not exclude the use of discovery but shall 8 preclude the use of any procedural techniques which might 9 unduly increase the expense, formality and time involved in 10 resolving the complaint. The commission shall issue an order 11 resolving any such complaint at the earliest date 12 practicable, but in no event later than: 13 (i) 150 days after the date on which it received the 14 complaint, with respect to liability issues; and 15 (ii) 90 days after the date on which it resolves a 16 complaint, with respect to damages issues, if such 17 additional time is necessary. 18 (2) In resolving complaints under this subsection, the 19 commission may award damages equal to the greater of $500 or 20 the amount of actual damages. The commission may, in its 21 discretion, increase the amount of the award to an amount 22 equal to not more than three times the amount available under 23 this paragraph. 24 (d) Liability for unauthorized change of provider.--Whenever 25 an investigation of a customer complaint establishes that a 26 change in the customer's public utility service provider was 27 made without that customer's consent, the customer shall not be 28 liable for any public utility service bills rendered as a result 29 of the unauthorized change of provider. If the customer has paid 30 or has made payments on any such bill, the public utility 19990H0229B0224 - 12 -
1 service provider responsible for initiating the change of 2 provider shall issue a complete refund within 15 days of the 3 resolution of the complaint. A public utility service provider, 4 which makes an unauthorized change in a customer's provider of a 5 public utility service, shall switch the customer back to the 6 original provider at no cost or fee charged to the customer. 7 (e) Guidelines.--In order to facilitate the speedy 8 implementation of this act, the commission shall have the power 9 and authority to promulgate, adopt and use guidelines to 10 implement the provisions of this act. Such guidelines shall be 11 published in the Pennsylvania Bulletin and shall be subject to 12 review by the Office of Consumer Advocate. The guidelines shall 13 not be subject to review pursuant to section 205 of the act of 14 July 31, 1968 (P.L.769, No.240), referred to as the Commonwealth 15 Documents Law, section 204(b) and 301(10) of the act of October 16 15, 1980 (P.L.950, No.164), known as the Commonwealth Attorneys 17 Act, or the act of June 25, 1982 (P.L.633, No.181), known as the 18 Regulatory Review Act, and shall be effective for a period of 19 not more than two years from the effective date of this act. 20 After the expiration of the two-year period, the guidelines 21 shall expire and shall be replaced by regulations promulgated, 22 adopted and published as provided by law. 23 Section 8. Penalties. 24 (a) Civil penalties.--In addition to proceeding under any 25 other remedy available at law or in equity for a violation of a 26 provision of this act or a rule or regulation adopted or order 27 issued under this act, the commission may assess a public 28 utility service provider or any person, firm or corporation 29 representing a public utility service provider or any entity in 30 the business of providing a public utility service a civil 19990H0229B0224 - 13 -
1 penalty of not more than $40,000 for the first offense and a 2 civil penalty of not more than $500,000 for any second or 3 subsequent offense. In assessing the amount of civil penalty the 4 commission shall consider any mitigating circumstances. No civil 5 penalty shall be assessed unless the person charged has been 6 given notice and opportunity for hearing in accordance with law. 7 (b) Criminal penalties.--Any public utility service provider 8 or any person, firm or corporation representing a public utility 9 service provider or any entity in the business of providing a 10 public utility service found in violation of this act or any 11 rule or regulation adopted or order issued by the commission 12 under this act shall be subject to criminal penalties under 66 13 Pa.C.S. § 3302 (relating to criminal penalties for violations). 14 (c) Injunctive relief.--Whenever there is a violation of 15 this act or any rule or regulation adopted or order issued under 16 this act, the commission may apply to the Commonwealth Court or 17 to any other court having jurisdiction for a temporary or 18 permanent injunction to restrain a person from the continuance 19 of such violation. 20 Section 9. Enforcement by Attorney General. 21 (a) Recovery of civil penalty.--The commission may take such 22 action as may be necessary to collect any civil penalty it 23 imposes under this act and, on behalf of any customer, any 24 damages awarded the customer under section 7. Such action may 25 include referral of the matter to the Attorney General, who 26 shall recover the amount of civil penalty assessed or damages 27 awarded by action in the appropriate court. 28 (b) Pattern of conduct.--Whenever the commission finds that 29 a public utility service provider or any person, firm or 30 corporation representing a public utility service provider or 19990H0229B0224 - 14 -
1 any entity in the business of providing a public utility service 2 has engaged in a pattern of conduct in violation of the 3 provisions of this act or has refused or failed to resolve a 4 customer complaint within the time-frame established by the 5 commission, the commission may refer the matter to the Attorney 6 General for resolution. 7 (c) Unfair trade violation.--A violation of this act shall 8 be deemed a violation of the act of December 17, 1968 (P.L.1224, 9 No.387), known as the Unfair Trade Practices and Consumer 10 Protection Law. 11 Section 10. Applicability. 12 The provisions of this act shall not apply: 13 (1) In cases where a customer's public utility service 14 is discontinued by an electric generation supplier or a 15 natural gas supplier and, subsequently, provided by a 16 provider of last resort because no other supplier will 17 provide the discontinued service to the customer. 18 (2) In cases where a customer contracts for electric 19 generation service or natural gas supply service and it is 20 not delivered or if a customer does not choose an alternative 21 electric generation supplier or natural gas supplier. 22 (3) In cases where a customer chooses an alternative 23 supplier and subsequently desires to return to the local 24 distribution company for generation service. 25 (4) To a provider of wireless telecommunication service 26 until such time as the commission may determine that the 27 provisions of this act apply to such service. 28 Section 11. Effective date. 29 This act shall take effect in 60 days. L10L66SFL/19990H0229B0224 - 15 -