Georgia PSC to Fine Negligent Marketers Under Proposal
Under pressure from marketers and now from the state's attorney general
about the legality of some proposed rules, the Georgia Public Service Commission
dropped a plan last week to require natural gas marketers to forgive monthly
bills sent to customers more than 90 days late. Instead, the PSC unveiled
a new package of rules that among other things would heavily fine marketers
for repeated and willful noncompliance.
The PSC fell back from its earlier proposals in a public hearing, following
an opinion by the Georgia attorney general's office, which said the "90-day
rule" likely would not hold up in court. The attorney general's opinion
stated that courts would expect Georgia to "utilize less draconian
measures." Assistant Attorney General Daniel Walsh suggested that
the proposal should instead "be narrowly tailored to the harm incurred
by the consumers the proposed rule seeks to protect."
Commissioner Bobby Baker, who had proposed the original rule, said the
state's marketing companies consistently made errors despite continuing
assurances that they would correct the problems. However, another commissioner,
Lauren "Bubba" McDonald, had called Baker's proposal unconstitutional,
saying it would basically be a free gas program for some consumers. Georgia'
PSC has faced consumer complaints about billing, especially late billing
and inaccurate statements, since the state deregulated natural gas two
years ago (see NGI, Nov. 13; Sept.
4; Sept. 21, 1998).
The proposed 90-day rule also came under fire by marketers at an earlier
public hearing this month, in which the state's largest marketer, Georgia
Natural Gas, had called the rule "fraught with legal, technical and
Last week, the PSC staff unveiled its new package of rules to address
the continuing billing discrepancies. Under one new proposal, the PSC would
allow consumers to have as much time to pay a late bill as it took for
the marketer to send it, minus interest and penalties. Marketers also would
be required to itemize charges on the monthly bills to make it easier for
consumers to compare competitive marketer rates. PSC proposals would also
require the following:
Bills have to be mailed or posted electronically within 45 days of marketers'
receipt of meter readings from Atlanta Gas Light Co. and be "substantially
Bills have to specify the cost per therm of natural gas charged by the
marketer, the amount of AGL distribution charges, separate interstate pipeline
capacity charges and the marketer's customer service charge.
PSC also is considering imposing penalties for repeated or willful noncompliance,
which would include suspending or revoking an operating certificate and
fines of up to $15,000 per violation and $10,000 per day that the violation
continues. However, the PSC proposal does not set a benchmark for the number
of times a company has to violate the rules before the PSC acts.
Undeterred by the attorney general's opinion, Commissioner Baker said
he thought the new set of rules would work. Even McDonald, who had opposed
some of the earlier rules, also was optimistic about the new package. Both
Baker and McDonald support a proposal requiring marketers to give 25 days'
written notice to increase customer service charges, despite protests from
marketers. Gas marketers contended in hearings this week that many customers
have chosen variable prices that permit charges to fluctuate with volatile
wholesale gas and commodity prices.
"Twenty-five days in advance, we don't know what the commodity
rate will be," said Robert Remar, an attorney for the state's leading
marketer, Georgia Natural Gas Services.
The hearings last week were more subdued, and marketers are generally
supportive of the revised package, especially the dropped 90-day rule.
Georgia Natural Gas Services Inc., which came under fire earlier this month
for back billing questions, told the commission it would support the measures,
including the 25 days' written notice provision. Energy America LLC also
said it would support the measures. Shell Energy Services told the commission
it still would like to offer amendments to some proposals, but no specifics
PSC set a hearing and vote on the revised package for Dec. 21.
Carolyn Davis, Houston