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1.1.1 Introduction

This book takes a broad look at regulated utility companies—gas, electric, water, and telephone—and unregulated companies that deliver home energy products—propane, home heating oil, wood, coal, and kerosene—from the consumer advocate’s perspective. Traditionally, many providers of natural gas, electricity, and telephone service have been closely regulated as utilities by the individual state, in terms of price, major investments in new plant, or infrastructure (to widely varying degrees in each state), and service quality. Far fewer water companies have been closely regulated because so many of them are municipally owned. State laws that regulate utilities tend not to cover municipal entities. Rural electric cooperatives also are in large part exempt from state regulation.

Most of the companies that provide “deliverable fuels,” such as propane, wood, coal, kerosene, and home heating oil, are not regulated as to the prices they charge, the deposits they may seek, or the terms and conditions of service. When no extensive state regulation applies to a specific form of utility or fuel, existing consumer protection laws of more general applicability become particularly important. Due to the fundamental differences between regulated and unregulated companies and between “delivered fuels” and electricity and gas, these topics are often discussed separately throughout this book.

From the mid-1990s through the early 2000s, there was a trend in states to consider and, in many cases, adopt “deregulation” or “restructuring” of the utilities that have traditionally been closely regulated. Utility deregulation added complexity in two ways. First, there are now largely unregulated companies within the electric, gas, and telephone industries that exist side by side with (and may be corporate affiliates of) traditional regulated companies. It has become even more important to determine the exact nature of the company serving a particular customer. Second, it is harder to learn which rules or regulations apply because, despite the rhetoric of “deregulation,” there may now be two sets of regulations that apply to a given industry—a set of traditional regulations that apply to the incumbent company and a new set of less detailed and less extensive regulations that apply to new competitive companies.

The recent growing awareness and concern over climate change has led to a renewed national, regional and state interest in the promotion of conservation and a movement away from fossil-fuel-dependence to an increased interest in renewable fuels. These are trends that will have a profound impact on the affordability and accessibility of essential energy and utility services for low-income consumers.

This treatise attempts, to some extent, to address these industries and issues. It examines the application of utility regulation to the consumer customer, the implications of the current trend toward deregulation, and consumer protections for all types of consumers, regardless of who is providing the utility or energy service.