PSC-14-16-00008-P Resetting Retail Markets for ESCO Mass Market Customers

4/6/16 N.Y. St. Reg. PSC-14-16-00008-P

NEW YORK STATE REGISTER

VOLUME XXXVIII, ISSUE 14

April 06, 2016

RULE MAKING ACTIVITIES

PUBLIC SERVICE COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PSC-14-16-00008-P

Resetting Retail Markets for ESCO Mass Market Customers

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

The Commission is considering imposing limitations upon energy service company eligibility to provide services, prices for commodity-only services, and the range of value-added services with respect to residential and small non-residential customers.

Statutory authority:

Public Service Law, sections 5(1), 65(1), (2), (3), 66(2), (3), (5), (8), (9) and (12)

Subject:

Resetting retail markets for ESCO mass market customers.

Purpose:

To ensure consumer protections with respect to residential and small non-residential ESCO customers.

Substance of proposed rule:

The Commission is considering imposing limitations upon energy service company (ESCO) eligibility to provide services, prices for commodity-only services, and the range of value-added services with respect to residential and small non-residential electric and natural gas customers (together, mass market customers). The Commission is also considering imposing limitations upon the prices that ESCOs may charge for commodity-only services to mass market customers, and also upon the range of value-added services that they may offer to mass market customers. The Commission is considering whether energy service companies (ESCOs):

1. May only enroll mass market customers and renew expiring agreements with existing mass market customers based on forward-going contracts that either (a) guarantee savings in comparison to what the customer would pay on an annual basis as a full service utility customer (or if a customer for periods less than a year, for the period in which the ESCO provided the customer’s energy); (b) provide an electricity product derived from at least 30% renewable sources including biomass, biogas, hydropower, solar energy, and wind energy, and including renewable attributes; or (c) provide some other defined energy-related value-added service.

2. Must receive affirmative consent from a mass market customer prior to renewing that customer from a fixed rate or guaranteed savings contract into a contract that provides renewable energy but does not guarantee savings.

3. Must enroll mass market customers currently served through month-to-month variable rate agreements in a compliant product at the end of the current billing cycle or return the customers to utility supply service.

4. Must file a certification by the Chief Executive Officer (CEO) or equivalent corporate officer of the ESCO certifying that any enrollments will comply with the provisions stated above.

The Commission is also considering what period of time, if any, should be afforded to ESCOs to adjust their practices before any such revisions become effective. The Commission is also considering enhanced enforcement provisions to address ESCO violations of the Uniform Business Practices (UBP) and whether ESCOs eligible to operate in New York should be directed to comply with these enhanced and all other UBP provisions. The enhanced provisions include:

1. The ability for the Commission to proceed directly with an Order to Show Cause for eligibility revocation, or any less severe action it determines is appropriate, against any ESCO that has a single UBP violation.

2. Revisions to the UBP that would explicitly detail the Commission’s authority to impose consequences on ESCOs where there is a material pattern of consumer complaints regarding matters under the ESCO’s control, such as marketing practices, even where those complaints do not reveal any violations of the UBP.

3. Modifications to the UBP that would explicitly state that the Commission may impose consequences on ESCOs that violate any state, federal, or local law, rule, or regulation with respect to marketing. Moreover, that modification to the UBP shall also cover instances even where there is not a companion federal, state or local law, rule or regulation prohibiting such marketing, if there is evidence that the mass market customer has posted such a sign and the ESCO proceeded with marketing at the door of the establishment.

The Commission is also considering whether Electric and gas distribution utilities that have tariff provisions providing for retail access should file tariff amendments or addenda to incorporate or reflect in their tariffs the UBP provisions described above. The Commission is also considering the following issues:

1. Whether prospective ESCO sales to mass market customers, including renewal of expiring contracts, should be limited to products that include guaranteed savings or a defined energy-related value-added service. If not, precisely how should this requirement be broadened or narrowed?

2. What specific products or categories of products should constitute energy-related value-added services? For example, if energy efficiency products are to qualify, should a specific minimum energy savings be required and if so, of what amount? If certain commodity-only products are to qualify, such as fixed price products or green energy products, should any restrictions be placed on the prices for such products and, if so, how should those restrictions be determined?

3. Whether other requirements, in addition to those identified in question 1, above, should be imposed on ESCO marketing or sales to mass market customers.

4. What changes, if any, should be made to the three-day period for residential customer rescission/cancellation of an agreement with an ESCO. Should this period be extended to 30 days?

5. Whether a rescission/cancellation period should be applied to small non-residential customers. If so, what period is appropriate?

6. Whether and under what circumstances ESCOs should be required to post performance bonds or other forms of demonstrated financial capability. If so, what magnitude is appropriate and how can this be administered most efficiently?

7. Whether the Commission should reconsider the framework for ESCO oversight under the Public Service Law (PSL) and, if so, what changes should be made.

8. What penalties may apply to ESCOs that violate the UBP or other Commission Orders or provisions of the PSL (for example, the application of PSL §§ 25 and 25-a).

The Commission may adopt, reject or modify, in whole or in part, the matters proposed, may consider alternative proposals, and may resolve related matters.

Text of proposed rule and any required statements and analyses may be obtained by filing a Document Request Form (F-96) located on our website http://www.dps.ny.gov/f96dir.htm. For questions, contact:

John Pitucci, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Kathleen H. Burgess, Secretary, Public Service Commission, 3 Empire State Plaza, Albany, New York 12223-1350, [phone], email: [e-mail]

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement, Regulatory Flexibility Analysis, Rural Area Flexibility Analysis and Job Impact Statement

Statements and analyses are not submitted with this notice because the proposed rule is within the definition contained in section 102(2)(a)(ii) of the State Administrative Procedure Act.

(15-M-0127SP2)