The House Consumer Affairs Committee Monday held a hearing on the marketing practices of competitive electricity and natural gas suppliers under Pennsylvania competitive retail energy market act signed into law by Gov. Ridge in 1996.
Rep. Robert Godshall (R-Montgomery), Majority Chair of the Committee, opened the hearing by saying a postcard he recently received said unless he took action his energy bill would increase.
He said he thought the postcard was misleading and resulted in customers signing up for services they do not want giving competitive energy suppliers a bad name.
Gladys Brown, Chairman of the Public Utility Commission, noted just under 2 million electric customers receive service from competitive electric suppliers which supply 65 percent of the total electric load in the Commonwealth.
There are over 400 entities licensed as competitive electric suppliers, 133 of which sell electric generation services and 289 of which are engaged in brokering activities only. Approximately 105 of these suppliers are licensed to serve residential consumers.
The competitive natural gas market is less active, with just over 400,000 customers receiving service from competitive suppliers, representing 44 percent of the statewide natural gas load.
There are over 290 natural gas suppliers licensed by the Commission with 130 supplying gas commodity services and 160 engaged in brokering activity only. Approximately 155 of these suppliers are licensed to serve residential consumers.
The retail energy markets provide Pennsylvania consumers the opportunity to shop for and purchase an increasingly diverse array of energy products; including fixed price, variable price, renewable, and time-of-use products.
She noted the PUC’s PAPowerSwitch.com and PAGasSwith.com websites offer a convenient place for customers to shop for competitive energy suppliers.
However, the Commission has long-acknowledged that interest in shopping among consumers can vary widely.
Brown noted the Standard Offer Program on the electric side has offered customers a way to try a different energy supplier with a fixed price for 12 months. Nearly 900,000 electric customers have taken advantage of these programs.
She said the Commission has considered using a similar model program for the natural gas industry, but to date has not done so.
Brown said the PUC regulates residential marketing practices under its regulations which specify requirements on supplier marketing, but place a particular focus on door-to-door and telemarketing activities.
She said the Commission is continually looking at its regulations as the market evolves and new products and services become available. Most recently the Commission in December launched a rulemaking to again consider electric supplier disclosure rules.
Tony Cusati, Chair of the PA State Electricity and Natural Gas Caucuses Of the Retail Energy Supply Association, said members of his organization follow five principles in their marketing programs--
-- Not engaging in unfair, deceptive, or misleading practices;
-- Not making false or misleading representations;
-- Use of plain language;
-- Provide written information; and
-- Product or service offerings contain information designed to be understood by the customer.
Specific issues that Cusati wanted to see addressed included notifying the commission of any misleading or false marketing materials, continuously improving the shopping experience involved in working with PA PowerSwitch and PA GasSwitch, and improving the competitive retail energy markets through ideas like Supplier Consolidated Billing.
F. Mitchell Dutton, Regulatory Counsel for AEP Energy, Inc., said he believes Pennsylvania has been a business friendly environment that promotes competitive retail electric markets in a transparent and fair way.
Leah Gibbons, Director of Regulatory Affairs for NRG Energy, Inc., said she believes the PUC has been a leader in protecting consumers in Pennsylvania and echoed support for requiring Supplier Consolidated Billing as an option for suppliers.
Tanya McCloskey, Acting Consumer Advocate, Office of Consumer Advocate, noted the PUC has been engaged in several initiatives to enhance the competitive retail markets as well as address concerns that have arisen in the markets.
She said her Office has worked extensively on consumer education and shopping for competitive electric and natural suppliers, but said the markets are still negatively affected by confusing advertising material that misleads consumers.
Click Here to watch a video of the June 18 hearing.
Rep. Robert Godshall (R-Montgomery) serves as Majority Chair of the Committee and can be contacted by calling 717-783-6428 or sending email to: rgodshal@pahousegop.com. Rep. Thomas Caltagirone (D-Berks) serves as Minority Chair and can be contacted by calling 717-787-3525 or sending email to: RepCaltagirone@pahouse.net.
(Based in part on reporting by PA Legislative Services.)
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