Georgia PSC Drops 90-Day Rule, Eyes Proposals

Under pressure from marketers and now from the state's attorney general about the legality of some of the rules, the Georgia Public Service Commission has dropped a proposal 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 this week, following an opinion by the Georgia attorney general's office, which said the "90-day rule" would likely not hold up in court. The attorney general's opinion stated that courts would expect Georgia to "utilize less draconian measures."

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 Daily GPI, Nov. 9; Aug. 31; Sept. 21, 1998).

The proposed 90-day rule also came under fire by marketers at an earlier public hearing, in which the state's largest marketer, Georgia Natural Gas, had called the rule "fraught with legal, technical and practical difficulties."

This 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 correct;"
  • 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 this 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 were given.

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