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DeAngelo, Eustace, Mazzeo, Pintor Marin & Benson Consumer Protection Bills Requiring BPU to Establish Standards for Third-Party Energy Suppliers Clears Senate

(TRENTON) – Two bills sponsored by Assembly Democrats Wayne DeAngelo, Tim Eustace, Vince Mazzeo, Eliana Pintor Marin and Daniel Benson to require the Board of Public Utilities (BPU) to protect consumers by establishing standards and procedures for consumer interaction with third-party electric power and gas companies cleared the full Senate on Thursday.

The legislation is a response to testimony the Assembly Telecommunications and Utilities Committee received from consumer utilities advocates and utilities partners on the need for regulation of third-party providers.

“The deregulated market leveled the playing field for third party competitors and gave consumers the opportunity to shop around for the best rate,” said DeAngelo (D-Mercer/Middlesex), chair of the Assembly Telecommunications and Utilities Committee. “However, it also has raised concerns for many regarding regulation. This legislation will begin to strengthen consumer protection for residents who choose a third party electric power or gas service as their energy provider.”

“Consumers are currently navigating an unregulated third party utilities market,” said Eustace (D-Bergen/Passaic). “There needs to be more transparency in the process. We want consumers to continue to make their own choices with clear rules and regulations in place to guard residents who enter into these contracts with suppliers.”

One measure (A-3849) requires the BPU to provide consumer information on third-party electric power and gas supplier pricing and services. Under the bill, the BPU will provide consumers with access to comparison information for electric generation and gas supply services, in addition to other information the board finds appropriate.

“Consumers, especially seniors, ought to have the opportunity to choose utility companies that provide them with quality service at a rate they can afford,” said Mazzeo (D-Atlantic). “This legislation will help protect New Jersey’s ratepayers from unreasonable rate increases and changes to the terms of their contracts.”

The other measure (A-3851) directs the BPU to establish contract standards between customers and third-party electric power and gas suppliers. Under the bill, a contract between a customer and the supplier is to use a 12-point font and state in a 12-point font whether the contract is for a fixed rate or a variable rate. The measure would also require contracts to include an explanation of the difference between a fixed rate and variable rate that is easily understandable by the general public.

“Numerous consumers in New Jersey have testified that they were unaware that they had variable rate contracts and that such contracts could result in them paying rates double or triple what they believed they had agreed to,” said Pintor Marin (D-Essex). “By providing ratepayers with clear outlines of their contracts in terms they can understand, this legislation will go a long way toward increased consumer protection.”

“Consumers who switch to third-party utility companies often are looking to save money, but unfortunately, they later realize that variable rates written into their contracts may end up costing them significantly more over the long run,” said Benson (D-Mercer/Middlesex). “This legislation will make it easier for customers to understand from the start how they will be charged for energy usage.”

The bill also requires suppliers to provide customers with a one-page information sheet summarizing the pertinent terms of the contract in English and Spanish. In addition, the legislation prohibits suppliers from providing the customer’s telephone number, e-mail address or mailing address to other suppliers if the customer’s telephone number appears on the federal or state do-not-call list. The bill would apply to contracts formed or renewed after the bill’s effective date.

The two measures, which passed unanimously in the Assembly in May, were advanced by the Senate Environment and Energy Committee in September. The Senate approved both measures 38-0.