New York Energy Consumer Protection Act Now Law

Governor George Pataki signed into law the Energy Consumer Protection Act of 2002, which gives New Yorkers who buy natural gas or electricity from an unregulated energy services company the same consumer protections they have as utility customers. The Act was passed unanimously by the state legislature in June.

Consumer advocates such as the AARP had pushed for Pataki to sign the bill, arguing that it would provide consumers with much-needed protections against being burned by financially shaky marketers and set important limits on the deposits and fees that customers might face.

A Pataki spokesman said the Act will not only safeguard energy consumers, but also promote greater competition among energy companies. Opponents had argued that the legislation will stifle the state's fledgling competitive market for electricity and natural gas by making it more expensive for marketers to operate and limiting their ability to offer innovative services and products. The law makes marketers subject to the same fee limits that utilities now face, capping late payment charges at 1.5 percent of the balance. They also will be required to offer budget billing programs to all customers. While many marketers now offer deferred billing programs, they currently are not mandated.

Marketers also will be barred from collecting deposits unless a consumer has a history of delinquent payments. Prepayments, which allow marketers to collect from customers in advance, would not be allowed, eliminating the ability of independent suppliers to offer products like the one that caused Iroquois customers to lose hundreds of dollars when the company failed. The law also gives marketers the ability to shut off service to customers who don't pay their bills under the standards set by the existing consumer protection legislation, known as the Home Energy Fair Practices Act. Marketers now are able to turn delinquent customers back to the utility, which then is responsible for deciding whether to shut off service according to the existing guidelines.

Source: The Buffalo News, Associated Press

Page Last Updated: December 5, 2007