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Protecting Consumers in Pennsylvania’s Retail Energy Market: The Push for Responsible Supplier Practices

By: Frank Caliva, RESA’s National Spokesperson

The Electricity Generation Customer Choice and Competition Act of 1996 marked a significant milestone in opening Pennsylvania’s retail power market. This historic legislation allowed consumers to have a choice in their energy suppliers, granting them greater control over their electric and natural gas bills and products.

Today, 27 years later, over 1.8 million consumers in Pennsylvania receive their energy services from competitive suppliers. With more than 200 licensed retail suppliers vying to offer electricity and natural gas products and services to homes and businesses, not only do consumers get a choice in their provider, but it can help save money on their monthly energy costs and offers renewable products and plans. Additionally, energy employment has created thousands of jobs for Pennsylvania workers.

The Retail Energy Supply Association (RESA) recently read an article in The Philadelphia Inquirer about a local Philly resident who said they answered their door and heard a sales pitch about switching to a different energy company to save on their monthly energy costs. According to the homeowner, after hearing about the deal, they did not sign a contract but did agree verbally to switch companies. The homeowner said the pitch they agreed to – a cheaper energy bill – did not materialize.

At the beginning of the summer, the Pennsylvania Office of Consumer Advocate (OCA) and the Office of the Attorney General (OAG) issued a press release to Pennsylvanians to explore their options and shop for energy in response to increased prices and to be cautious about door-to-door energy sales. RESA, the nation’s largest trade association of retail energy suppliers, strongly supported this announcement. We are also one of the staunchest supporters behind Representative Kyle Mullins’ sponsorship of House Bill 1578, Protecting Consumers: Training and Bonding for Retail Energy Suppliers, which was introduced at the 2023 General Assembly Session and referred to the Committee on Consumer Protection, Technology and Utilities last month.

If passed, HB 1578 will mandate all retail electric and natural gas suppliers, along with their representatives marketing their products in Pennsylvania, to undergo an online training education course and successfully pass an exam for certification by the Public Utility Commission (PUC). The legislation explicitly states that suppliers would cover all costs to implement and administer this program through fees assessed by the PUC. Furthermore, the legislation will include an increased bond requirement of $1 million with the commission for any natural gas or electricity supplier that engages in person-to-person retail residential class sales at a residence.

According to Mullins’ memorandum on April 17, “This legislation…include[s] a requirement for increased bonding or financial guarantee to help ensure that the actions of a few suppliers don’t sabotage the good intentions of all stakeholders that have endorsed a customer’s right to shop for their energy supplier over the past two decades,” wrote Mullins. “This is an attempt to further exclude those ‘fly-by-night’ companies from doing business in the Commonwealth. Please join me in this effort to protect consumers and promote upstanding utility companies providing electric and gas service in Pennsylvania.” 

“Pennsylvania residents have access to many ethical third-party energy suppliers. It’s unfortunate when a few ‘bad actors’ impact hundreds of companies that go above and beyond what’s required to ensure consumer protections are upheld,” said Frank Caliva, RESA’s national spokesperson. “RESA strongly supports Representative Mullins, PUC, OAG and OCA efforts to safeguard the good intentions of competitive suppliers from being undermined by the actions of a limited number of companies.”

The PUC created the website, which provides information on licensed suppliers, products, plans and more to help consumers decide what works best for their needs. Researching and shopping for options, plans and products is very important when selecting a plan that works best for one’s budget and energy usage.

RESA advocates for consumers to have the freedom to choose their energy provider. The organization believes consumer education is essential and encourages consumers to carefully read and understand all contract terms before committing.

This article also appeared on PennLive/Patriot-News: