STAFF CONTACT :
BILL
SUBJECT
DATE
This bill would add a new subdivision 5 to Section
44 of the Public Service Law in an effort to
prevent “slamming”, or the switching of a customer account
to another company without such
customer's consent.
The bill states that “a customer account shall not be switched
to a different energy provider
without the express consent of such customer.” The term “express
consent” is vague and needs to
be defined. The bill does not specify if written confirmation is required
or if a “voice-log” from a
customer call constitutes consent. A voice-log is when a customer calls
a company and affirms to
take service from another provider, which is recorded and stored for
a limited time on a database.
Line 4 of the bill states that “The terms and conditions of
service for a customer shall not be
changed without the express consent of such customer, except changes
applicable to all
customers of a service classification, ....” Beyond gaining consent
for customers that choose to
switch from an incumbent utility to an ESCo(Energy Service Company),
this language would also
apply to customers that wish to switch from an ESCo back to an incumbent
utility. And in this
case, if a customer finds a lower rate from another provider but misplaces
or fails to return a
written consent form, they will continue to be subject to higher payments
from the current
provider.
Currently, it is common practice for customers to be given a mutually
agreed upon contract
stating the price, terms and conditions of service when establishing
service with an ESCo. That
letter requires a customer's signature verifying that they wish
to take service from an ESCo.
These ESCos must abide by the same consumer protection rules as all
other energy providers as
required through the Uniform Business Practices order adopted by the
PSC. It is important to
note that a customer can terminate service with an ESCo at any time
and default to the
incumbent utility or contract with another ESCo of their choice at
any time. Typically, the ESCo
sends an annual renewal letter to the customer two and a half months
in advance of the end of
their contract for service. Those renewal letters restate the agreement
and the price, any change
in terms and conditions of service, and a date by which the customer
can opt out. The letter does
not require a customer's signature as with the initial letter
that established the terms of service.
A.7428/S.5240 should be amended to make it clear that renewals do not
require “express
consent”. Under the language of the bill currently, if customers
fail to respond to annual renewal
letters, they will automatically be defaulted to the incumbent utility,
even if they do not wish to do
so. At the same time, incumbent utilities are not required to gain
annual consent from their
customers. Subjecting ESCos to such a requirement would add significant
costs and establish
uncertainty that will adversely impact retail access and overall customer
choice.
For the foregoing reasons, The Business Council opposes the bill and
requests that it not be
approved.