Fact Sheet 22:
Electricity and Your Privacy:
Deregulation in California

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Copyright © 1998-2016
Privacy Rights Clearinghouse
Posted January 1998
Revised January 2003

Note: "Direct access," where customers can purchase electricity from an "electric service provider," or ESP, instead of regulated electric utilities, was suspended on September 20, 2001, by the California Public Utilities Commission Decision (D.) 01-09-060. This means that direct access is not available to new customers. This also means that this Fact Sheet is no longer relevant for California consumers.

We have decided to retain this publication on our web site as a cautionary tale for consumers who live in other states where the electricity market is deregulated, as well as for policymakers who are considering the privacy implications of deregulating or restructuring electricity markets.

Remember, as you read this publication, it is now out of date and no longer relevant for California consumers.

Legislation passed into law in 1996 is supposed to bring competition to the electric service industry in California. In the past, there has been only one company providing electric service to a given area. These monopoly providers were: San Diego Gas & Electric Company, Southern California Edison, and Pacific Gas and Electric; plus four smaller investor-owned utilities: Sierra Pacific, PP&L, Mountain Utilities, and Bear Valley Electric.

These companies are now called Utility Distribution Companies (UDCs). As of March 1998, consumers in these service areas (covering about 70% of the state's ratepayers) are able to choose among several electric generation companies, called Electric Service Providers (ESPs), in a restructured, competitive marketplace. Municipal utilities can also decide to allow competition into their service territories. If your electricity is supplied by a "muni," you may want to contact the customer services department to find out if you can now choose an ESP.

For more information about the laws and regulations behind restructuring, read Public Utilities Code Section 394, www.leginfo.ca.gov/calaw.html, and California Public Utilities Commission (CPUC) Decisions, including 98-03-072 and 97-10-031, www.cpuc.ca.gov

What does electric restructuring mean for consumers? You now can choose which company sells you the electricity for your home or small business.

But choice can bring confusion. How will consumers determine which company offers the best deal, well-suited to their needs? You can make your choice based on several factors. The cost of electricity is one factor, of course, but not the only one. You might be interested in companies which offer more environment-friendly services (for example, wind, solar and hydroelectric power). And a company's value-added options might be attractive to you, for example, "smart" meters that let customers know how much energy they're using at different times of day, or smart home appliances that operate at times when energy is cheaper.

Another factor to consider when you select an Electric Service Provider is its privacy protection practices. This guide will help you ask the right questions when shopping for an energy company -- questions about personal information required of the applicant, Social Security number disclosure, credit reporting practices, "slamming," and telemarketing sales calls.

Remember, you are not required to switch to an ESP. If you are more comfortable receiving electric service from your UDC, you may do so.

What impact does electric industry deregulation have on my privacy?

There is the potential for abuse of consumers by new companies entering the electricity market. Important items to watch for include compilation of marketing lists, credit check abuses, and overly aggressive solicitation practices by companies seeking to attract new customers.

When I apply to receive electricity from an Electric Service Provider, what information will I be asked to provide?

Most ESPs will require you to be signed up with your existing electric utility company, or UDC, prior to switching (for example, San Diego Gas & Electric). The ESP will then require either your last bill or the following information, which may be derived from the bill -- your account number, your rate schedule, and your electric meter number. Additionally the ESP may require your Social Security number, discussed below.

Can I refuse to give any of this information?

Depending upon the practices of the company you select, your last electricity bill may be required. If you do not have service currently, the company will require you to sign up with the UDC, such as San Diego Gas & Electric. That's because the Utility Distribution Company owns the power lines that the ESP will be using to deliver service to you. After signing up with the UDC, you may then opt to switch your electricity generation service to one of the ESPs.

Am I required to disclose my Social Security number?

You are not required to disclose your Social Security number (SSN). But, if you don't, you may be required to pay a deposit. The amount of the deposit cannot exceed three times the estimated average monthly cost of the class of service for which you applied. (California Public Utilities Code Section 394.4(g)) Utilities ask for the SSN so they can check your credit report to determine your past history of paying credit card bills and loan payments. If you choose not to provide your SSN, the ESP might ask for another form of identification such as your driver's license.

Will the energy company check my credit report?

Yes, unless you provide it with a deposit. As explained above, ESPs may perform a credit check on potential customers to discern their creditworthiness. This information is kept confidential and can only be used to decide whether or not to accept you as a new customer. If you pay a deposit to avoid submitting your SSN and having your credit checked, you are entitled to receive the deposit back, plus interest, after one year, so long as you make all your payments on time and in full.

What happens if I am rejected as a customer?

If your application is rejected by the ESP, you will be notified by mail that you do not qualify as a customer. The ESP must tell you within 30 days why your application was turned down. (California Public Utilities Code section 394.5(c)) If the rejection is based on information in your credit report, an "inquiry" will show up on your credit report. You will have the opportunity to obtain a free copy of your credit report. (See PRC Fact Sheet 6 on credit reports.) You will still be able to obtain electric service from your UDC.

How can I be protected from "slamming," when an Electric Service Provider switches my account without my permission?

The California Public Utilities Commission has established safeguards to prevent slamming of residential customers. If your ESP is switched without your consent, report it to the CPUC at the address given below. The CPUC will investigate the matter. If it finds a pattern of abuse, the CPUC will suspend or revoke the company's license to do business in California.

The CPUC has established verification procedures to prevent slamming. ESPs are required to use an outside party to verify that the customer has given proper consent to change from one company to another. The third-party verifier may tape-record your verbal consent to switch to another ESP. According to California law, the company must notify you if the conversation is tape recorded; or it must put a "beep" tone on the line. (See PRC Fact Sheet 9 on wiretapping and eavesdropping.) Third-party verification is not required if the consumer initiates the call to the ESP.

The verifier may also ask you to provide other relevant customer information to check your identity. The information obtained by the verifier must be held in confidence and may not be used for marketing purposes. Unauthorized release of your personal information is grounds for a civil suit against the verifier.

How do I prevent electric industry telemarketers from calling me?

You may place your name on the "Don't Call Me" list maintained by the CPUC (Public Utilities Code Section 394.7). ESPs that conduct telemarketing to solicit new customers must remove any names from their telephone lists that appear on the "Don't Call Me" list. To sign up, write the CPUC at this address. You may use the form attached to this publication. (The "Don't Call Me" form is not yet on the CPUC or the PRC web site. The CPUC currently only accepts such requests in writing.)

  • California Public Utilities Commission, Consumer Affairs Branch,
    "Don't Call Me List," 505 Van Ness Ave., San Francisco, CA 94102

Be sure to include your name, address, and telephone number(s). The person signing the letter must be the billed customer for the telephone number(s) which you indicate.

The CPUC's "Don't Call Me" list is updated quarterly. If an Electric Service Provider calls you after your name is added to the list and posted on the quarterly update, it must pay you $25 for each call. Be sure to record the date and time that you were called. Ask the person calling you for his/her name and the company making the call. This information must be included in the complaint which you file with the CPUC (see address of the Consumer Affairs Branch above).

Can my Electric Service Provider release any information about my account to anyone else, such as my usage pattern, payment history, or credit information?

No. The information about you maintained by the ESP (and by the UDC as well) is confidential unless you consent in writing to its release (CPUC Decision 97-10-031). But if you fall behind on your monthly payments, the ESP may notify a credit reporting bureau. It may also sell your past-due account to a collection bureau which will then contact you to make payment. (To avoid having your account "charged off" to a collection company, contact the ESP when you first know you are going to have trouble making payments. The company might be willing to establish a payment plan.)

You have a right to obtain a copy of your own customer profile information, upon request, from the UDC. Customer-specific information includes name, service and billing address, phone number, account number, historical metered electricity usage, voltage level of service, the utility tariff for that customer class, the load profile, and basic metering information. You can request this information twice a year without charge. Each UDC keeps at least one year's worth of billing information on file.

The CPUC has ordered the UDCs to make nonconfidential customer information available to the ESPs in order to facilitate their entry into the deregulated market. Customer names have been stripped from this data base, and the data is compiled into groups of no fewer than 15 customers, according to their Postal ZIP code. For more information about this and other matters regarding customer information, see the CPUC's News Release No. 108 (October 9, 1997) on its web site.

Who do I contact if I have a complaint about an Electric Service Provider?

Contact the California Public Utilities Commission, Consumer Affairs Branch at the address provided above. The toll-free number of the Consumer Affairs Branch is (800) 649-7570. You may obtain more information about how to submit complaints by listening to a variety of recorded messages. The CPUC requires complaints to be submitted in writing. You may also file your complaint from the CPUC's web site, www.cpuc.ca.gov

How can I learn more about changes to the electric industry in California?

The CPUC has established a consumer education campaign, called "Knowledge Is Power," to inform Californians about changes to the electric service industry.

  • You may call the CPUC's Electric Education Call Center, at its toll-free number, (800) 253-0500. Small businesses may call (800) 789-0550. Assistance is provided in English, Spanish and several Asian languages. The Center is staffed from 8 a.m. to 8 p.m. Monday-Saturday.
  • The TDD number for hearing-impaired residents is (800) 933-3119.
  • Another source of information is the CPUC Consumer Services Division's electric restructuring hotline:
    (800) 555-7809. You can learn, for example, if an ESP is registered in California.
  • The CPUC's own web site contains additional information about deregulation, www.cpuc.ca.gov
    It also includes a list of registered ESPs.
  • Be sure to read the "Frequently Asked Questions about Consumers' Choices in Electric Services," available by writing the Consumer Affairs Branch (see address above), or by visiting the web site, http://www.cpuc.ca.gov/static/industry/electric/electric+markets/historical+information/faqs.htm
  • For a list of environment-friendly, or "green," ESPs, contact the California Energy Commission: (800) 555-7794, www.consumerenergycenter.org/renewable/choosing/providers.html

Two consumer watchdogs provide valuable information on electric restructuring in California.

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