A recent article laments the slow pace of retail competition for residential gas sales in New York ("Blue Flame Blues: Gas Pilots Sputter at Burnertip," Oct. 1, 1997, p. 22). Besides the meager financial incentive for a New York residential customer to switch gas companies, there is another factor contributing to the slow headway being made by gas marketers: The New York Public Service Commission failed to establish a level playing field with just and reasonable terms of sale. Instead, the commission built a two-tier system allowing degraded competitive service lacking in protection for customers.
In its March 1966 decision requiring LDCs to unbundle gas commodity sales from transportation service to residential customers, the New York PSC held that new competitors selling gas are free to ignore the customer protection statutes consolidated in New York's Home Energy Fair Practices Act (NYPSL §§ 30, et seq.). The commission allowed marketers to determine in their contracts what customer rights and remedies will be, and abdicated its customary administrative role to adjudicate individual customer complaints against the new gas companies.
What followed was a race to the bottom. One-sided boilerplate residential contracts allow gas sellers to reject customers for no reason, and permit sellers to demand unlimited deposits at any time during the contract. A customer withholding payment of a disputed gas charge could simply be terminated on 15-days notice by the seller, and the deposit liquidated to satisfy the disputed claim.