BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1159|
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THIRD READING
Bill No: SB 1159
Author: Sher (D)
Amended: 4/21/99
Vote: 21
SENATE ENERGY, U. & C. COMMITTEE : 8-0, 4/13/99
AYES: Bowen, Baca, Brulte, Kelley, Mountjoy, Peace, Solis,
Speier
NOT VOTING: Alarcon, Hughes, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Electrical restructuring: electric service:
changes
SOURCE : Author
DIGEST : This bill deletes the third-party verification
requirement for residential customers when a change in
electric service provider is made via the Internet or via
written transaction.
ANALYSIS : Current law establishes procedures for a
customer to change electric service providers and requires
the electric service provider to contract with a
third-party to verify that the customer intended to change
electric service providers.
This bill deletes the third-party verification requirement
for residential customers when the change is made via the
Internet or via written transaction. When the change is
CONTINUED
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made via the Internet, this bill require the customer to be
asked to respond to a separate screen acknowledging their
desire to change electric service providers. When the
change is made via written transaction, this bill requires
the customer to sign an acknowledgement that they do indeed
want to change electric service providers.
Current law says that a change in electric power provides
by an aggregator does not trigger the third party
verification/confirmation procedures in current law.
This bill deletes this provision.
This bill requires the aggregator or provider of electric
power to keep a record of the verification or confirmation
for two years and to make those records available, upon
request, to the customer and to the California Public
Utilities Commission (PUC).
This bill authorizes the PUC to require third-party
verification for all residential changes described, if
certain findings are made.
Comments
For telephone customers, the unauthorized switching of a
customer's long-distance telephone company has been a
rampant and persistent problem. This problem, known as
slamming, has been the most common complaint received by
the PUC over the past several years. A series of federal
and state laws have been enacted to attempt to get a handle
on the problem and the change in state law that seems to be
the most responsible for a decrease in slamming complaints
is the requirement for third-party verification.
Under this requirement, a long-distance telephone company
must use a third-party to verify the customer's desire to
switch. Concerns about similar slamming problems arising
in the newly-competitive electric industry prompted a
similar third-party verification requirement to be imposed
when competition was first permitted in 1998.
The author believes the current verification requirements
are too strict and lead to customer frustration, and can
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delay, or in some cases prevent, a customer from switching
electric service providers. To overcome these problems,
this bill eliminates third-party verification when a
customer changes electric service providers through the
Internet or in writing. Under those circumstances, this
bill requires customers to confirm their desire to switch
providers by using a separate screen to confirm a switch
order in the case of the Internet and, in the case of a
written order, by requiring a separate signature set off in
a box.
Because the author believes slamming problems arise
primarily in a telemarketing setting, this bill retains
current law's third-party verification requirements when a
customer is telemarketed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/18/99)
California State Council of Laborers
Clean Power Campaign
Green Mountain Energy Resources
New Energy Ventures, Inc.
Office of Ratepayer Advocates
Southern California Edison Company
Sempra Energy
ARGUMENTS IN SUPPORT : The supporters of this bill argue
that the third-party verification requirements are
unnecessary, causing unwanted telemarketing and unnecessary
delay in switching electric service providers. This bill,
according to the supporters, do not unduly dilute customer
protection because the third-party verification requirement
remains for telemarketers. Further, according to the
supporters, this bill benefits electric service providers,
because their cost of acquiring new customers will be
reduced.
NC:cm 5/18/99 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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