History of HEFPA


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THE HISTORY OF THE HOME ENERGY FAIR PRACTICES ACT

HEFPA

AND THE ENERGY CONSUMER PROTECTION ACT OF 2002

Background
The Energy Consumer Protection Act of 2002
Recent Articles on HEFPA and ECPA 2002
ECPA 2002 Links
Early HEFPA Articles
Court Decisions, PSC Orders, Comments and Pleadings Involving HEFPA
HEFPA Statutes
HEFPA Regulations
HEFPA Summaries of Rights and Remedies and Other Materials

Background

The Energy Consumer Protection Act of 2002 was supported by PULP, AARP, and a coalition of new providers of energy services. ECPA 2002 was passed unanimously by both houses of the State Legislature in June, 2002. It will take effect 180 days after it is signed by the Governor. The bill was sent to the Governor December 9,2002. He has until December 20 to act on it.

The Home Energy Fair Practices Act (HEFPA) is New York's utility consumer ``bill of rights," adopted in 1981 to establish and consolidate in Article 2 of the Public Service Law the basic rights and remedies of New York's residential utility energy consumers. It is one of the strongest consumer protection statutes for electric and gas customers in the nation, and is the linchpin of our State's universal service policy.

Beginning in 1996, the New York Public Service Commission (PSC) approved alternative gas and electric companies that have begun to sell electric energy, natural gas, and other services to residential utility customers. Some of the new gas and electric companies (for example, Con Edison Solutions, NYSEG Solutions, Keyspan Energy Services) are wholly owned subsidiaries of familiar large New York utilities. Some are owned by out of state utilities, while others are independent of any traditional utility company.

Without any change in the law or official HEFPA regulations, the PSC issued in 1996 the first of a series of orders allowing new gas companies, called ``gas marketers," to serve residential customers without complying with HEFPA. See ``State Forgot Consumer Protections in Deregulating Gas,"

In Opinion 97-5, the PSC decided in 1997 that ``energy services companies" or ``ESCOs" selling electricity are not subject to the consumer protection requirements of the Home Energy Fair Practices Act, and adopted a relaxed set of requirements for electricity ESCOs. In doing so, the PSC argued that State policy required only that each consumer have some supplier available to it from which the consumer could receive service under HEFPA standards. Since the traditional utilities would, for the present time, still provide HEFPA compliant service to their remaining customers, the PSC approved the new companies and found them eligible to serve residential customers without complying with HEFPA.

Declaratory judgment actions were brought by PULP, AARP, the Chairman of the Assembly Energy Committee, and residential utility consumers to obtain judicial clarification of the applicability of HEFPA to the new providers of residential electric and gas service. These actions, however, were dismissed by the state appeals courts for lack of standing, without reaching the merits.

The Energy Consumer Protection Act of 2002 Top

In 2001, the State Assembly passed a bill to clarify that HEFPA applies to all elements of residential electric and natural gas service, no matter which company provides it. In 2002, both houses of the legislature unanimously passed the Energy Consumer Protection Act of 2002 (ECPA), which differs in detail but not in objective from the Assembly bill of 2001.

Under ECPA, all of the protections defined by HEFPA are made applicable to the transactions between the competitive suppliers and residential consumers. With respect to the commencement and continuation of service, these include rules with respect to deposits, budget billing, estimated bills, plain language bills, third-party notices, deferred payment agreements and other protections found in HEFPA for households experiencing medical emergencies, for households with elderly, blind or disabled customers, and for households that might experience a loss of service in a cold weather season. Finally, this bill allows the residential customer taking service from a competitive supplier who has a billing or service dispute with that supplier under HEFPA to take that complaint for hearing and written determination to the Public Service Commission.

Recent Articles On HEFPA and ECPA 2002 Top

AARP Presses Pataki to Sign Measure - Bill Passed in June Would Help Consumers Who Buy Electricity From Competitive Suppliers - 12-20-02

Energy Consumer Protections Bill Awaits Pataki Signature - The Business Review 12-12-02

ELECTRICITY DEREGULATION - 'Power-fully' difficult choices - NYSEG clients must opt for power supplier by year's end -Buffalo News - 10/20/02

First Decision For Consumers Is Whether They Want Fixed Or Variable Power Rates - Buffalo News - 10/20/2002

AARP, Energy Consumer Advocates Partner with Energy Service
Industry to Call for Approval of Energy Consumer Protection Act - 10-10-02

AARP: Sit Tight On Energy Service - Press & Sun-Bulletin - 10-10-02

Utilities' Ad Campaigns Urge Ratepayers To Consider Alternatives - Associated Press - 10-7-02

AARP Supports Electricity Customers' Rights Bill - Schenectady Gazette - 10-02-02

Battle Brewing Over Consumer Protections Legislation - 9-14-02

NY Senior Action Newsletter - 05-31-02

More penalties loom for National Fuel - 9/30/01

National Fuel cited in death of woman - 9-28-01

State Forgot Consumer Protection in Deregulating Gas Buffalo News; 12/10/00

Retail Choice: A Race to the Bottom, Fortnightly, 1/1/98, p. 8.

ECPA 2002 Links Top

AARP Press Release - AARP Members Will Urge Governor Pataki to Sign into Law ``The Energy Consumer Protection Act of 2002" Deadline approaches for the Governor to take action on the unanimously passed legislation. 12-18-02

New York City Mayor Supports Signing of ECPA - 12-11-02

ECPA 2002 Sent to Governor - 12-10-02

Energy Consumer Protection Act of 2002 - Full Text (S6778-B)

AARP Press Release - AARP Mobilizes Thousands of Its Active Members to Call Governor Pataki to Sign into Law the ``Energy Consumer Protection Act of 2002 - 10-21-02

Protect Energy Customers - Daily Gazette Editorial - 10-10-02

AARP Press Release - AARP Calls Upon Governor to Approve the "Energy Consumer Protection Act of 2002," Call for immediate action because of major media campaigns by public utilities encouraging people to switch energy providers.
10/1/02

Consumer Federation of America (CFA), Consumers Union (CU) and National Consumers Law Center (NCLC) Letter of Support - 9-29-02

Consumer Energy Council of America (CECA) Letter of Support - 9-24-02

Utility Workers Union of America - Local 1-2 Letter of Support - 09-23-02

The New York Energy Consumer Protection Act of 2002.

PULP's Memorandum of Support for the ECPA bill.

AARP's Memorandum of Support for the ECPA bill.

New York Statewide Senior Action Council Memorandum of Support for the ECPA Bill

Bill insert newsletter from Niagara Mohawk suggesting that in dealing with alternative energy suppliers, customers "should be cautious, shop for alternatives, and consult an attorney before signing any legal document."

Photos of AARP campaign to apply HEFPA to all residential utility service

AARP's Comparison of ESCO and HEFPA service

AARP's Consumer Survey

Summary of HEFPA Rights

Early HEFPA Articles Top

New state legislation urged on gas, electricty shutoffs - Times Union 1/14/81

Senate in Albany Votes Rights Bill for Utility Users - New York Times 7/3/81

Utility Consumer - Bill of Rights - New York StateWide Senior Action Council - 7/81

PSC Monthly Report - 7/81

Carey signs consumer `bill of rights' - Associated Press - 8/7/81

Photo of the Signing

Consumers' rights regarding utilities - Syracuse herald 12/27/81

`Bill of Rights' Is Adopted for NY Utility Consumers - Newsday- 3/10/82

Utility Consumers Gain New Rights - New York Times - 3/11/82

PSC Approves Consumer Protection Rules - New York Times - 3/14/82

Court Decisions, Pleadings and PSC Orders Involving HEFPA Top

PSC Order Allows ESCOs to Require Non-interest-bearing Deposits and Prepayments Barred by HEFPA - 5-09-02
"ESCOs should be allowed to request deposits of their customers. . . . allowing ESCOs and their customers to negotiate appropriate deposits is reasonable. We will revisit this issue if abuses become apparent." * * * * "We believe, however, that a ban on all prepayments might stifle market innovation and deprive customers of some of the potential benefits of competition." * * * * " We will allow more time for market responses to develop before considering whether it is necessary to fix an interest rate for ESCO deposits." CASE 00-M-0504 - Proceeding on Motion of the Commission Regarding Provider of Last Resort Responsibilities, the Role of Utilities in Competitive Energy Markets, and Fostering the Development of Retail Competitive Opportunities - Unbundling Track, Order Concerning Esco Deposits and Prepayments, (Issued and Effective May 9, 2002).

PULP Motion to Intervene in NFG HEFPA Penalty Proceeding - 10-09-01

PSC issues Orders National Fuel to Show Cause Why Penalties Should Not be Assessed for Violations of the Home Energy Fair Practices Act In Connection with the Death of a Customer. - Order to Show Cause - 9/27/01

CPB Brief Supporting Application of All Statutory Consumer Protections (HEFPA) to ESCOs
``The CPB commends the Hearing Officers for a thorough and well-reasoned RD that adopts the CPB's fundamental position that all Energy Service Companies ("ESCOs") should be required to provide all of the general consumer protections required of utilities under the Public Service Law ("PSL") and be required to serve customers in a non-discriminatory manner. In our view, these changes are necessary to increase consumer confidence in retail energy markets, achieve movement toward retail competition, and secure the competitive benefits for consumers envisioned by the Public Service Commission ("PSC" or "the Commission") when it initiated this proceeding. We urge the PSC to adopt the RD on these points. Case 00-M-0504, Proceeding on Motion of the Commission Regarding Provider of Last Resort Responsibilities, the Role of Utilities in Competitive Energy Markets, and Fostering the Development of Retail Competitive Opportunities, New York State Consumer Protection Board Brief on Exceptions Regarding the Future of Retail Energy Markets in New York State" (8/10/2001)

Attorney General Says Electric And Gas Consumers Should Not Be Stripped Of Statutory And Regulatory Protections. 5-4-01
"Failing to require ESCOs to provide an adequate level of consumer protections to their customers will also lead to customer confusion--particularly among residential customers, who may assume that they enjoy the same consumer protections with an ESCO as they did with their incumbent utility. Customer confusion may lead to frustration and dissatisfaction with deregulation, which would undermine the goals of promoting and encouraging a competitively vibrant retail market. Thus, both utilities and ESCOs should be required to provide all applicable HEFPA protections to residential customers and all applicable protections to non-residential customers under applicable non-residential rules."

The Electric ESCO Court Decision, 263 A.D.2d 879 (3d Dept. 1999), lv. denied 94 N.Y.2d 755 (1999).

Gas Marketer Court Decision, 252 A.D.2d 55 (3d Dept. 1998).

ENRON's Affidavit Supporting Elimination of HEFPA for Competitive Gas Suppliers - 1-2-97

Oral Argument on Behalf of ENRON Supporting Elimination of HEFPA in Gas Marketers Case - (Transcript - Alb. Co. Sup. Ct.) 2-13-97

PULP's Appellate Division Brief in the Gas Marketer Case.
On May 26, 1998, PULP filed a brief on appeal with the Appellate Division, Third Department in a case challenging the New York PSC's regulatory regime for competitive "gas marketers." The PSC is allowing new competitors in the natural gas market to operate without complying with the Home Energy Fair Practices Act, a "bill of rights" enacted by the legislature in 1981 for residential gas and electric customers. The PSC's new rules allow the marketers to charge deposits and limit customer rights in their contracts, including the right to have the PSC decide complaints over bills and services. The brief seeks to overturn an April, 1996 decision of the Albany County Supreme Court which dismissed the complaint for lack of "standing."

Energy Association court petition alleging that the Public Service Commission lacked power to eliminate statutory consumer protections (HEFPA) for customers of new electric and natural gas companies. The case was dismissed as not ripe. The utilities abandoned their appeal after reaching settlements with the PSC allowing the utilities to form holding companies with unregulated retail "ESCO" subsidiaries that do not provide HEFPA protections.

Letter from the Department of Law regarding HEFPA and Electric Competition - 9-26-96

PSC Rehearing Order Allows Gas Marketers to Operate Without Following HEFPA Statutes
"For purposes of HEFPA, gas utility service includes sale of the gas itself(the "commodity") as well as the transportation of that gas. Customers obtaining both services from the utility have HEFPA protections on both services. Customers purchasing the commodity from a marketer have HEFPA protection on only the utility transportation segment. Accordingly, customers desirous of availing themselves of the HEFPA rule on, for example, deposits, may do so by remaining a utility service customer." Case 93-G-0932 - Proceeding on Motion of the Commission to Address Issues Associated with the Restructuring of the Emerging Competitive Natural Gas Market. Order Resolving Petitions for Rehearing (September 13, 1996).

PSC Order Eliminating HEFPA Rights and Remedies for Customers of Gas Marketers (PSC Case 93-G-0932) 3-28-96

PSC Summary of ENRON, PULP CPB and other parties' comments on elimination of HEFPA for Gas marketers, PSC Case 93-G-0932. (1996)

Comments of PULP Opposing Staff Proposal to Eliminate HEFPA Protections for Customers of Gas Marketers - 2-14-96

Affidavit Concerning Notice and Procedure for Considering Elimination of HEFPA - 10-30-96

Chronology of PSC Proceedings in Case 93-G-0932 in which Gas Marketers were exempted from HEFPA by the PSC - (1996)

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