6.1. Electric Service is a Necessity (DRA)

While Direct Access makes electric service competitive and, therefore, an appropriate subject for market-determined rates, electric service continues to be an essential service and "affected with a public interest".

6.2 Protection Against Redlining

Existing California law embodied in the Unruh Act prohibits all business establishments from engaging in any form of arbitrary discrimination whatsoever, and the intent of the law has been liberally construed both as to types of prohibited discrimination and protected groups. Vulnerable consumers, including the poor, small residential and language and racial minorities, have been found to fall under Unruh's purview.

There is concern that certain new providers to the market may choose not to offer energy services to residential and small commercial customers with load demands less than 20 kW, who are in certain geographical areas. Similar circumstances were experienced in California's insurance industry. While it is permissible to limit services to large industrial customers, for example, it is not legal to exclude certain classes of customers because of geographical areas, coinciding with racial/ethnic concentrations.

Thus, the Commission should require providers to submit data both at the time of their registration with the Commission, and on an annual basis, on customer applications for service and the basis for credit determination. Further, the Commission should promulgate regulations analogous to those adopted by the Insurance Commissioner, or the federal Community Reinvestment Act, which require all providers whose business revenue in California exceeds a given amount to file information by zip code, including: the number, percentage, race or national origin, and size of customers (residential, small business or industrial) served in various communities accompanied by a map showing those customer concentrations, including the rates being offered each; the number and percentage of direct mail and telephone solicitations for new business in various communities, including zip code and racial/national origin identification of the customer; and the number and percentage of applications, with zip code and race or national identification, for which the energy provider declined to provide direct access service.

This data would enable the Commission to ensure that all customers benefit from deregulation through access to choices about their electricity provider and/or aggregator. Additionally, it will ensure that certain geographical locations are not charged higher rates than others for like services. Finally, it will minimize the likelihood that certain groups of customers, such as the poor or racial minorities, will by necessity be "captive" customers of the local utility by virtue of not having access to similar choices offered to other like customer groups. Requiring providers upon initial licensing to specify what types of customers they intend to serve will assist the Commission in monitoring that unlawful redlining does not occur. Additionally, retail energy suppliers must maintain with the Commission written policies on applications for service and the basis for its determination of credit. The policy must describe the criteria for becoming a customer of the supplier, and the criteria must be filed upon application for license/registration and kept updated at all times.

A retail energy supplier, including aggregators and meter suppliers, may hold themselves out as serving customers with a particular set of end-uses or load curves, or who meet other criteria related to the generation source and pricing policy of the supplier, so long as such criteria do not have the intended effect of discriminating among customers on grounds prohibited by the Unruh Act or Equal Credit Opportunity Act. (See previously submitted discussion of fair credit and terms.)

6.3. Uniform pricing & service

Introduction re: need for certain uniformity in contracts, connection and disconnection rules, customer information and metering.

6.3.1 Contracts for Sale of Electricity

Every retail electric supplier will provide a written contract to a residential or small commercial customer for the retail sale of electricity which shall contain the following disclosures and minimum terms:

a) Recurring and non-recurring charges must be disclosed in a uniform manner to be determined by the Commission. The total monthly recurring price shall be disclosed as a total centers per kWhr basis. Up front or non-recurring charges shall be totaled and the effect of these charges on the recurring price of electricity shall be disclosed.

(b) The customer's right to redress will be explained in a uniform manner to be determined by the Commission.

c) How the supplier handles customer's personal information, including an explanation of how the customer can control release of his or her sensitive personal information.

d) Explanation of the customer's options and rights regarding switching of service to another provider or the UDC and any fees or costs charged under the contract for switching service.

e) Practices used by the ESP for determining credit worthiness, and disconnection practices when credit has been revoked by the ESP.

f) An explanation of the customer's obligation to pay CTC charges.

g) Explanation the ESP's adopted code of conduct and where copies can be obtained, or where a code of conduct has not been adopted by the ESP, and citation to that effect.

6.3.2 Non-discriminatory Credit & Deposit Rules

Electric service providers should be required to offer non-discriminatory terms and conditions of service in relation to access to electric service. Electric service, by any ESP, should be equally-available to all similarly-situated potential customers. The CPUC has an interest in preventing "redlining". (see above)

Greenlining will provide an outline list of credit and deposit minimums (or maximums) that should be compulsory.

6.3.3. Metering Uniformity

Metering and Communication equipment should be controlled by those parties which can operate it safely, and maintain its effectiveness, all in the most efficient manner. The Customer, the ESP, the UDC, and the public-at-large all have an interest in the equipment's safe and effective operation; so Operating and Performance Standards are necessary to insure that all parties' legitimate interests are protected. However those standards should not unfairly preclude any customer group from selecting customer or ESP ownership options available to others.

6.4 Service Limiters

In countries where energy services have been deregulated, some energy service providers have moved to service limiting meters as a means of reducing delinquencies and collection costs. These meters come in different variations and have varying cut-off mechanisms, but all have one common characteristic: they facilitate pre-payment for electric service.

If as a result of restructuring, these kinds of meters were required for certain customer segments, a very significant change in the quality of service currently enjoyed by Californians would result. Currently, all electric customers are entitled to render payment after having received service. Where a customer's credit is at issue, several months deposit may be required. However, because energy demands are difficult to predict, prepayment for electric service has traditionally not been required because of the risks that anticipated demand may be wrong, leaving customers with over usage without service. For that reason, all parties to these workshops agree that California should avoid requiring any customer to use service limiting meters.

However as an option controlled by the customer, service limiting meters should be allowed. Customers who have proven to be credit risks are today required to deposit with their utility an amount equal to two months billing. That money is held by the utility for up to one year, without interest. Some customers may rather contract with an ESP who installs service limiting, or pay as you go (PAY-Go) meters, thereby avoiding that deposit.

Other customers may be interested in these meters as well. PAY-Go meters eliminate the need to perform meter reading, data processing, billing, payment processing, and collection activities. These savings, when passed to the consumer, create an incentive for both good and bad credit customers to make the switch.

At a time when deployment of such meters are sought by providers, the Commission should hold a rulemaking to establish the conditions for such use; the protections to be accorded customers choosing PAY-Go meters; and installation, operations, and maintenance practices

6.5 Landlord/Tenant Issues

Electric Service is regarded as an absolute necessity for all persons by the law. Real property owners are legally required to have electric service installed at their property before it may be occupied, whether by the owner or by any other person. (Civil Code Sec. 1951.5) However in a restructured industry, there are legitimate questions as to who would own the electric meter or be responsible for the meter in a rental arrangement.

Currently, electric service is often provided to the property owner, not the property tenant. Tenants, of course, enjoy certain rights in billing if they, in fact, are specifically charged for electric service used. But owners exercise reasonable control over the nature of that electric service, including the decision whether they or their tenants are to be the Electric Service customer. Therefore, in many cases, property rights in a premises tend to determine control over goods and services appurtenant to the premises, regardless of whether those appurtenant facilities are owned or not.

With the deregulation of telephone maintenance, customers were put in a position to choose whether to own the phone, and type of phone service. The landlord is responsible only for the inside wiring, but nothing else. Similarly, choice of electric service brings with it the opportunity for the customer to choose the type of electric service and the meter to be used. In master-metered arrangements, clearly this choice will be limited. However, in individually metered arrangements, it would seem that each customer should have the choice of meter and the responsibility for maintenance of that meter. The landlord should not be able to impede this choice. For example, with communal ownership properties, such as condominium complexes, individual owners or tenants of units should be able to select a different ESP than the one chosen by the majority ownership for the communal property. Although the majority will have control over communal areas, individuals must maintain control over the property only they use.

This issue is a compelling one due to the possibly illegal tie-in arrangements that have developed in the provision of Cable TV service and other telecommunications services. Telecommunications providers have entered into arrangements where they install wiring and infrastructure for a residential or small business complex in such a way as to preclude other providers from offering service to those residents. In fact, many providers have entered into written contracts expressly excluding other providers from serving the complex and requiring property managers to enforce this provision. Such arrangements are probably illegal and should not be tolerated in the nascent electric industry.

Thus, the operation of an electric metering or communications system can be specified along any appropriate performance standard.