2011 -- S 0284 SUBSTITUTE A

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LC01103/SUB A

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2011

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A N A C T

RELATING TO BUSINESSES AND PROFESSIONS - PROPANE GAS SALES

     Introduced By: Senators P Fogarty, Gallo, Tassoni, Goodwin, and Nesselbush

     Date Introduced: February 16, 2011

     Referred To: Senate Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-83-1 of the General Laws in Chapter 5-83 entitled "Propane Gas

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Sales" is hereby amended to read as follows:

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     5-83-1. Requirements for guaranteed price plans, price protection and prepaid

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contracts. -- (a) A contract for the retail sale of propane gas that offers a guaranteed price plan,

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including a ceiling price cap plan contract and any other similar plan, must be disclosed in a way

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to clearly define the terms and conditions of the price plan. The disclosure of terms and

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conditions must be in plain language, must immediately follow the language concerning the price

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or service that could be affected and must be, if initiated verbally, confirmed in writing no more

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than fourteen (14) days from the initiation date using no less than twelve (12) point boldface type

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of uniform font. The disclosure of terms and conditions, must include, but not be limited to, any

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additional fees or costs for securing the guaranteed price, as well as, any early termination fees.

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      (b) A solicitation for the retail sale of propane gas that offers a guaranteed price plan,

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including a ceiling price cap plan and any other similar plan, must be confirmed in writing no

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more than fourteen (14) days from the solicitation date, and the terms and conditions of that offer

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must be disclosed in plain language.

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      (c) A propane gas dealer that pays for media or print advertising of a price shall offer

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said price for a period of no less than twenty-four (24) hours or until the next advertised price is

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so publicized, whichever occurs first.

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      (d) No prepaid propane gas contract shall require any consumer commitment to purchase

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propane gas pursuant to the terms of such contract for a period of more than twelve (12) months.

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      (e) Any violation of this chapter section shall render the terms and conditions of the

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aforementioned contract null and void.

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     SECTION 2. Chapter 5-83 of the General Laws entitled "Propane Gas Sales" is hereby

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amended by adding thereto the following sections:

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     5-83-2. Surcharge disclosure and actual cost estimates. -- (a) As used in this chapter,

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“consumer” or “residential consumer” means a direct purchaser of propane for consumption and

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not for resale as the primary source of fuel for residential heating and/or domestic hot water to

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one or more dwelling units within a structure having not more than four (4) dwelling units.

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     (b) No propane gas dealer shall charge a residential consumer any fee above the delivered

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cost per gallon of propane unless the fee was disclosed prior to delivery in a consumer contract or

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dealer notice, and is itemized in an invoice provided to the consumer. Propane gas dealers shall

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provide a written explanation of the fee and disclose the actual or best estimate of the amount of

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the fee to be charged in connection with the next delivery within five (5) business days of a

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consumer’s request for such information at no expense to the consumer.

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     (c) Upon the request of an individual, a propane gas dealer shall promptly disclose, over

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the telephone or in writing, the estimated price per gallon of propane and any charges that are

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applicable to the individual based on stated usage, the price and terms of leasing, loaning or

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purchasing storage containers through the seller, and other pertinent information, provided that

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nothing in this subsection shall be interpreted as creating a business relationship between an

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individual and a propane gas dealer.

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     5-83-3. Propane storage container financing and denial of service. -- (a) If a propane

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gas dealer, in its sole discretion, agrees to finance a consumer’s purchase of a propane storage

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container, the financing shall be subject to the provisions of Rhode Island general laws chapter 6-

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27, entitled “Truth in Lending and Retail Selling.”

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      (b) Propane storage containers may only be filled by the owner or upon the owner’s

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authorization. When the propane storage container is owned by the consumer, a propane gas

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dealer shall not refuse to deliver propane to the consumer-owned container if the consumer:

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     (1) Satisfies the dealer’s credit and payment requirements;

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     (2) Enters into a written service agreement if required by the dealer in the regular course

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of business;

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     (3) Is located within the dealer’s delivery territory;

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     (4) Provides proof of ownership of the container;

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     (5) Arranges for a safety check of the propane system and the installation and operation

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of the system are determined by the dealer to comply with NFPA 54 (National Fuel Gas Code)

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and NFPA 58 (Storage and Handling of Liquefied Petroleum Gas Code) of the National Fire

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Protection Association; and

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     (6) Complies with appropriate safety requirements as required by the dealer.

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     5-83-4. Emergency contact information. -- The firm name and emergency telephone

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number of a gas dealer that delivers propane to a stationary DOT cylinder and/or an ASME tank

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with an aggregate capacity of less than four thousand (4,000) gallons water storage capacity shall

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be affixed and legibly maintained in a visible location on or near all such stationary propane

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containers in text at least one-half (1/2) inch in height.

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     5-83-5. Termination of service. -- (a) When a business relationship is terminated

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between a residential consumer and a gas dealer that has leased or loaned a propane storage

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container to the consumer, the propane gas dealer shall:

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      (1) At the consumer’s request, remove the propane gas storage container that it owns

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from the consumer’s premises by the latest of the following dates:

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     (i) Twenty (20) days from the termination or thirty (30) days from the termination in the

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case of an underground tank;

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     (ii) In the case of a cash customer, twenty (20) days from receipt of payment of all

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amounts due to the gas dealer by the consumer; or

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     (iii) As soon as weather conditions and access to the propane storage container allow.

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     (2) Within thirty (30) days after removal of a dealer-supplied propane gas storage

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container, reimburse the consumer for any propane gas remaining in the container at the retail

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per gallon price that was paid by the consumer, less any amounts due from the consumer to the

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dealer;

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     (3) Be authorized to charge a consumer commercially reasonable fees, as applicable, for

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propane storage container excavation and pump out if an existing contract between the consumer

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and gas dealer allows the dealer to charge such fees;

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      (4) Be authorized to charge a consumer a disconnect or tank removal fee in an amount

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that is commercially reasonable based on labor, transportation, restocking and similar costs, if the

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fee has been disclosed to the consumer in a written agreement and if:

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     (i) For storage containers situated above ground, the container has been located on the

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consumer’s premises for less than three (3) years; or

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     (ii) For storage containers situated underground, the container has been located on the

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consumer’s premises for less than five (5) years.

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     (b) A provision of an existing contract that allows a gas dealer to charge a consumer

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disconnect or tank removal fee with respect to a container that has been located on the

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consumer’s premises for more than three (3) years shall remain valid and enforceable until the

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date the contract expires or June 1, 2012, whichever is sooner.

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     5-83-6. Violations. -- Any person or entity who sells propane gas to be used for

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residential use that knowingly violates this chapter may be fined in an amount not more than five

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hundred dollars ($500).

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     SECTION 3. This act shall take effect upon passage.

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LC01103/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS - PROPANE GAS SALES

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     This act would add several consumer protection sections to the provisions of the general

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laws regulating propane gas sales.

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     This act would take effect upon passage.

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LC01103/SUB A

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