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 -