Section 1F: Consumer protections; rules and regulations
Section 1F. The department is hereby authorized and directed to require electric companies organized pursuant to this chapter to accommodate retail access to generation services and choice of suppliers by retail customers, unless otherwise provided by this chapter. The department shall promulgate rules and regulations to provide retail customers with the utmost consumer protections contained in law, including, but not limited to, the following provisions:
(1) The department shall license to do business in the commonwealth all generation companies, aggregators, suppliers, energy marketers, and energy brokers in accordance with the provisions of subparagraphs (i), (ii), and (iii). The department shall maintain a list of all licensed generation companies, aggregators, energy brokers, energy marketers, and suppliers, which shall be available to any consumer requesting such information through the department for a reasonable fee.
(i) All generation companies shall submit a license application to the department for approval to sell electric power or provide generation services within the commonwealth. Such application shall include the following: the company's technical ability, as defined pursuant to regulations promulgated by the department, to generate or otherwise obtain and deliver electricity and provide any other proposed services; documentation of financial capability of the applicant to provide the proposed services; a description of the company's form of ownership; and documentation regarding any valid purchase power contracts between the company, the company's affiliates, or the company's parent or subsidiary, and any electric company formed pursuant to the provisions of this chapter. A license shall not be granted unless and until all of the above information is provided with the payment of a fee, the amount to be determined by the department.
(ii) All private, non-profit, or co-operative aggregators established pursuant to sections 135 and 136 seeking to do business in the commonwealth shall submit a license application to the department, subject to rules and regulations promulgated by the department and subject to the payment of a fee, the amount to be determined by the department.
(iii) All energy brokers, energy marketers, and other suppliers seeking to do business in the commonwealth shall submit a license application to the department, subject to rules and regulations promulgated by the department and subject to the payment of a fee, the amount to be determined by the department.
(2) Pursuant to this paragraph, the department shall promulgate rules and regulations which shall include, but not be limited to, the following provisions: (i) a requirement that all distribution companies, generation companies, aggregators, marketers and suppliers notify their customers in writing of the terms of their agreement to provide service at the time service is initiated, a formal procedure allowing a customer to file a complaint against a distribution or generation company, aggregator, or supplier; and (ii) a formal dispute resolution procedure developed in consultation with the Massachusetts office of dispute resolution, which shall include options for mediation, arbitration, facilitation or other dispute resolutions methods. Under such procedure, the department or a professional neutral provided by the Massachusetts office of dispute resolution and approved by the department will assist in resolving disputes between any customer and a distribution or generation company, aggregator, or supplier against which a complaint is issued, subject to a penalty determined by the department, including any fines authorized by paragraph (7). No distribution or generation company may disconnect or discontinue service to a customer for a disputed amount if that customer has filed a complaint which is pending with the department.
(3) The department is hereby authorized and directed to establish rules and regulations to (i) promote effective competition; (ii) to investigate disputes; (iii) to institute a complaint mechanism for the resolution of disputes, including, but not limited to, those arising from alleged vertical or horizontal market power abuses; (iv) to hear such disputes in the first instance at an informal level and, if requested, at a formal hearing before the department; (v) to refer complaints to the attorney general where appropriate; and (vi) to impose fines or penalties, including when appropriate a reduction in return on equity of a regulated distribution company, for violations of any regulations establishing the corporate rules of conduct.
(4)(i) The department shall require that distribution companies provide discounted rates for low income customers comparable to the low-income discount rate in effect prior to March 1, 1998. Said discount shall be in addition to any reduction in rates that becomes effective pursuant to said subsection (b) of said section 1B on March 1, 1998, and to any subsequent rate reductions provided by a distribution company after said date pursuant to said subsection. The cost of such discounts shall be included in the rates charged to all other customers of a distribution company. Each distribution company shall guarantee payment to the generation supplier for all power sold to low-income customers at said discounted rates. Eligibility for the discount rates established herein shall be established upon verification of a low-income customer's receipt of any means tested public benefit, or verification of eligibility for the low-income home energy assistance program, or its successor program, for which eligibility does not exceed 200 per cent of the federal poverty level based on a household's gross income. Said public benefits may include, but are not limited to, assistance which provides cash, housing, food, or medical care, including, but not limited to, transitional assistance for needy families, supplemental security income, emergency assistance to elders, disabled, and children, food stamps, public housing, federally-subsidized or state-subsidized housing, the low-income home energy assistance program, veterans' benefits, and similar benefits. The department of energy resources shall make available to distribution companies the eligibility guidelines for said public benefit programs. Each distribution company shall conduct substantial outreach efforts to make said low-income discount available to eligible customers and shall report to said division, at least annually, as to its outreach activities and results. Outreach may include establishing an automated program of matching customer accounts with lists of recipients of said means tested public benefit programs and based on the results of said matching program, to presumptively offer a low-income discount rate to eligible customers so identified; provided, however, that the distribution company, within 60 days of said presumptive enrollment, informs any such low-income customer of said presumptive enrollment and all rights and obligations of a customer under said program, including the right to withdraw from said program without penalty.
In a program year in which maximum eligibility for the low-income home energy assistance program, or its successor program, exceeds 200 per cent of the federal poverty level, a household that is income eligible for the low-income home energy assistance program shall be eligible for the low-income discount rates required by this subparagraph.
The department is hereby directed to increase the low-income discount eligibility rate from 175 per cent of the federal poverty level to 200 per cent of the federal poverty level, as found in regulation 220 CMR 14.03(2A).
(ii) A residential customer eligible for low-income discount rates shall receive the service on demand. Each distribution company shall periodically notify all customers of the availability and method of obtaining low-income discount rates. An existing residential customer eligible for a low-income discount on the date of the start of retail access who orders service for the first time from a distribution company shall be offered basic service by that distribution company.
The department shall promulgate rules and regulations requiring utility companies organized pursuant to this chapter to produce information, in the form of a mailing, or other approved method of distribution, to their consumers, to inform them of available rebates, discounts, credits, and other cost-saving mechanisms that can help them lower their monthly utility bills, and send out such information semi-annually, unless otherwise provided by this chapter.
(iv) There shall be no charge to any residential customer for initiating or terminating low-income discount rates, default service, or standard offer service when said initiation or termination request is made after a regular meter reading has occurred and the customer is in receipt of the results of said reading. A distribution company may impose a reasonable charge, as set by the department through regulation, for initiating or terminating low-income discount rates, default service, or standard offer service when a customer does not make such an initiation or termination request upon the receipt of said results and prior to the receipt of the next regularly scheduled meter reading. For purposes of this subsection, there shall be a regular meter reading conducted of every residential account no less often than once every two months. Notwithstanding the foregoing, there shall be no charge when the initiation or termination is involuntary on the part of the customer.
(5)(i) Before service is initiated by a generation company, aggregator, or supplier to any customer, the generation company, aggregator, or supplier shall disclose information on rates and other information to a customer in a written statement which the customer may retain. The department shall promulgate rules and regulations prescribing the form, content, and distribution of such information to be disclosed, which shall include, but not be limited to, the following: the disclosure of the rate to be charged; whether the generation company or supplier operates under collective bargaining agreements and whether such generation company or supplier operates with employees hired as replacements during the course of a labor dispute; any charges, fees, penalties, or other conditions imposed upon a customer should he or she choose to purchase power from another generation company, aggregator, or supplier during the term specified in the contract; the fuel mix and emissions of the generation sources; whether a credit agency will be contacted; deposit requirements and the interest paid on deposits; due date of bills and all consequences of late payment; consumer rights where a bill is estimated; consumer rights of third-party billing and like arrangements; consumer rights to deferred payment arrangements; low-income rates; limits, if any, on warranty and damages; the applicable provisions of this section; the provisions for default service; a toll-free telephone number for service complaints; any other fees, charges, or penalties; and the methods by which a consumer shall be notified of any changes to any of these items. A generation company, a supplier, or an aggregator licensed by the department to do business in the commonwealth pursuant to this section shall prepare an information booklet describing a customer's rights under the provisions of this chapter. Such company, supplier, or aggregator shall annually mail this booklet to its customers.
(ii) A generation company, an aggregator, or a supplier shall be allowed to advertise the percentage of its power or energy portfolio that is generated by employers that operate under collective bargaining agreements or that operate with employees hired as replacements during the course of a labor dispute or that connotes or signifies to the ratepayer the relative environmentally beneficial effects of the power or energy sold by said generation company, an aggregator, or a supplier pursuant to rules and regulations promulgated by the department.
(iii) In addition to the disclosure requirements provided for in subparagraphs (i) and (ii), the department shall promulgate such rules and regulations prescribing information to be disclosed by a generation company in any advertising or marketing of electricity rates, which regulations shall include, but not be limited to, disclosure of the rate to be charged in bold print in the case of print advertisements or through clear spoken language in the case of television or radio advertisements and on any monthly billing materials. The department shall coordinate with the attorney general to avoid duplication and to ensure consistency with the attorney general's regulations.
(6) The department shall promulgate uniform labeling regulations which shall be applicable to all suppliers as a condition of licensure pursuant to paragraph (1). Such information to be required by regulation in said labeling shall include price data, information on price variability, and customer service information and information about whether the generation company or supplier operates under collective bargaining agreements and whether such generation company or supplier operates with employees hired as replacements during the course of a labor dispute, fuel sources, and air emissions of sulfur dioxide, nitrogen dioxides, carbon dioxide, heavy metals, and any other emission which the department may determine causes significant health or environmental impact and for which sufficiently accurate and reliable data is available. The department shall require that such an electricity information label provide prospective and existing customers with adequate information by which to readily evaluate power supply options available in the market. Electricity suppliers shall be required to present such information, including information about the environmental characteristics of the sale of electric power products and services and whether the generation company or supplier operates under collective bargaining agreements and whether such generation company or supplier operates with employees hired as replacements during the course of a labor dispute to customers, in conformance with department requirements as to form and substance, and shall comply with federal and state laws governing unfair advertising and labeling.
(7) The department shall establish a code of conduct applicable to the provision of distribution and transmission services and the retail sale of electricity to all customers, including, but not limited to, rules and regulations governing the confidentiality of customer records, metering, billing, and information systems, and conformance with fair labor practices. The department is authorized and directed to oversee quality and reliability of service and to require that quality and reliability are the same as or better than levels that exist on November 1, 1997. The department is authorized and directed to retain or make increasingly protective of retail ratepayers the rules adopted by the department and codified at Title 220 of the Code of Massachusetts Regulations, sections 25, 27, 28, and 29, and the policies reflected in the department's adjudication of customer complaints, and, notwithstanding anything in this chapter to the contrary, shall continue to apply them to generation and thus to all generation companies, generation facilities, aggregators, and suppliers. The department is authorized and directed to promulgate rules and regulations to establish service quality standards for each distribution, transmission, and gas company, including, but not limited to, standards for universal service, customer satisfaction, service outages, telephone service, billing service, and public and employee safety. Any person, firm, electric or generation company, supplier, or other corporation doing business in the commonwealth who violates any provisions of said code or of any rule or regulation promulgated by the department pursuant to sections 1A to 1H, inclusive, or any provision of chapter 93A, pursuant to authority established by section 102C, shall be subject to a civil penalty not to exceed $25,000 for each violation for each day that the violation persists; provided, however, that the maximum civil penalty shall not exceed $5,000,000 for any related series of violations. Any such civil penalty shall be determined by the department after a public hearing. In determining the amount of the penalty, the department shall consider the following: the appropriateness of the penalty to the size of the business of the person, firm, or corporation charged; the gravity of the violation; and the good faith of the person, firm, or corporation charged in attempting to achieve compliance after notification of a violation.
(8)(a)(i) Each customer choosing a generation company or its affiliate, subsidiary, or parent company, or a supplier or aggregator shall be required to affirmatively choose such entity. It shall be unlawful for a generation company, supplier or aggregator to provide power or other services to such a customer without first obtaining said affirmative choice from the customer.
(ii) For the purposes of this section, the term ''affirmative choice'' shall mean the signing of a letter of authorization, third party verification, or the completion of a toll-free call made by the customer to an independent third party operating in a location physically separate from the telemarketing representative who has obtained the customer's initial oral authorization to change to a new electricity service provider.
(iii) For the purposes of this section, the term ''third party verification'' shall mean an appropriately qualified and independent third party operating in a location physically separate from the telemarketing representative who has obtained the customer's oral authorization to change to a new electricity service provider, such authorization to include appropriate verification data, such as the customer's date of birth and social security number; provided, however, any such information or data in the possession of the third party verifier or the marketing company shall not be used, in any instance, for commercial or other marketing purposes, and shall not be sold, delivered, or shared with any other party for such purposes.
(iv) For the purposes of this section, the term ''letter of authorization'' shall mean a separate document, or an easily separable document whose sole purpose is to authorize a generation company, aggregator, or supplier to initiate a primary generation company, aggregator, or supplier change. The letter of authorization must be signed and dated by the consumer requesting the primary generation company, aggregator, or supplier change.
(v) The letter of authorization shall not be combined with inducements of any kind on the same document.
(vi) At a minimum, the letter of authorization shall be printed with a readable type of sufficient size to be clearly legible and must contain clear and unambiguous language that confirms:
(A) the consumer's billing name and address;
(B) the decision to change electricity service from the current generation company, aggregator or supplier to the prospective generation company, aggregator or supplier;
(C) that the consumer understands that only one generation company, aggregator or supplier may be designated as the consumer's competitive supplier; and
(D) that the consumer understands that any primary generation company, aggregator or supplier selection the consumer chooses may involve a charge to the consumer for changing the consumer's primary generation company, aggregator or supplier.
(vii) Letters of authorization shall not suggest or require that a consumer take some action in order to retain the consumer's current generation company, aggregator or supplier.
(viii) If any portion of a letter of authorization is translated into another language, then all portions of the letter of authorization must be translated into that language.
(ix) Each customer choosing a generation company or its affiliate, subsidiary, or parent company, a supplier or aggregator shall have the right to rescind, without charge or penalty, the choice of generation company, aggregator, or supplier no later than midnight on the third day following the customer's receipt of a written confirmation of an agreement to purchase electricity and a statement of the terms and conditions of service as described in subparagraph (i) of paragraph (5). Upon switching of a customer's service provider, there shall be included in the customer's next monthly statement for distribution service an acknowledgment of the service switch, along with information on how to file a complaint regarding an unauthorized switch.
(b) A customer may initiate a complaint that his retail electricity service has been switched by or to another service provider without his prior authorization. Said complainant shall file the complaint with the department within 30 days after the statement date of the notice indicating that the customer's retail electricity service has been switched. The department shall, within 10 business days of receiving the complaint, request from the customer a copy of the customer's electricity bill, the name of the original service provider, the name of the new service provider, and any other information the department may deem relevant. The customer shall, within 15 business days of the department's notifying the customer, submit to the department the requested information. Within 15 business days of receiving the request of information from the customer, the department shall send (i) to the customer, a letter acknowledging receipt of the information; (ii) to the original service provider, a letter informing it of the pending complaint and requesting it to provide information relevant to the service switch; and (iii) to the new service provider, a letter informing it of the pending complaint, requesting the proof of the customer's affirmative choice to switch his service provider, and requesting it to provide other information the department deems relevant. The original service provider and the new service provider shall, within five business days of the department's request, return the requested information to the department. Within 25 business days after receiving a copy of the customer's third party verification and all relevant information as required herein, the department shall determine if the customer authorized the new service provider to switch the customer's service.
(c) If the department determines that the new service provider does not possess the required proof of the customer's affirmative choice, the department shall calculate and require the new service provider to refund the following: (i) to the customer, the difference between what the customer would have paid to the previous service provider and actual charges paid to the new service provider; (ii) to the customer, any reasonable expense the customer incurred in switching back to the original service provider; and (iii) to the original service provider, any lost revenue, which shall consist of the amount of money the original service provider would have received for the service used by the customer during the time the customer received services from the new service provider if the customer's service had not been switched. This amount shall gross, irrespective of expenses, what the original service provider would have reasonably incurred providing the services to the customer. The department shall promulgate rules and regulations for the implementation of this subsection.
(d) Any generation company, supplier, or aggregator determined by the department to have switched any customer's service provider without proper authorization from the customer one or more times in a 12 month period shall be subject to a civil penalty not to exceed $1,000 for the first offense and not less than $2,000 nor more than $3,000 for any subsequent offense per customer. In determining the amount of the civil penalty, the department shall consider the nature, circumstances, and gravity of the violation, the degree of the respondent's culpability, and the respondent's history of prior offenses.
(e) Any generation company, supplier, or aggregator determined to have switched any customer's service provider without proper authorization more than 20 times in a 12 month period may, after a full hearing and determination by the department that such generation company supplier or aggregator intentionally, maliciously or fraudulently switched the service or more than 20 customers in a 12 month period, be prohibited from selling electricity in the commonwealth for a period of up to one year. In determining the length of suspension, the department shall consider the nature, circumstances and gravity of each violation and the degree of the culpability of the generation company, supplier or aggregator.
(f) The department shall track instances in which a generation company, supplier, or aggregator switched a customer's electricity service without the customer's prior authorization. The department shall keep a record of all unauthorized switches which occurred during a calendar year. Beginning with calendar year 1999, the department shall, by March 31 of each year, file an annual report with the joint committee on government regulations and the house and senate committees on ways and means detailing the total number of unauthorized switches, enforcement procedures undertaken by the department against such slamming tactics, so-called, the total amount of dollars returned to customers, the total amount of dollars collected in civil penalties pursuant to subsection (c), and the overall impact of the provisions of this section.
(9) Distribution companies which have at any time in the past three years billed their commercial or industrial customers, including institutional customers, in part on a demand basis, shall, in response to a customer's written request, provide such customers with a complete and accurate historic record of monthly demand profiles. Distribution companies shall be required to exercise best efforts to furnish such data to the customer on a timely basis. At a distribution company's election, the data may be provided in written form or electronically; provided, however, that, in the case of an electronic response by the distribution company, the distribution company shall be allowed to bill the customer for the out-of-pocket cost of providing such electronic record. The historic record of monthly demand shall be for a period not less than the most recent 12 months and shall include, at a minimum, the highest demand level observed over the month as well as the average monthly demand sustained over the month. To the extent deviations in the definition of the month are consistent with the distribution company's prior billing practices, such adjustments shall be permitted and so noted. To the extent the distribution company has imputed a demand usage profile in any or all prior periods, the distribution company shall indicate where prior measurements have not been based on actual recorded usage. In those instances where a distribution company has applied an imputed method for purposes of estimating a customer's demand profile, such distribution company shall describe the method used to define monthly demands.
(10) The department shall ensure that all written complaints under this section received from customers and the public regarding gas providers are investigated and a response to the complainant provided in a timely manner. The department shall establish a publicly accessible database which shall, to the greatest extent possible and incorporating customer privacy concerns, contain all complaints received, noting the category of complaint, the date it was received, the steps taken to address it and that date it was resolved.