PSC-18-16-00013-P Amendments to the Uniform Business Practices of ESCOs

5/4/16 N.Y. St. Reg. PSC-18-16-00013-P

NEW YORK STATE REGISTER

VOLUME XXXVIII, ISSUE 18

May 04, 2016

RULE MAKING ACTIVITIES

PUBLIC SERVICE COMMISSION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. PSC-18-16-00013-P

Amendments to the Uniform Business Practices of ESCOs

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 amendments to the Uniform Business Practices with respect to eligibility criteria of energy service companies.

Statutory authority:

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

Subject:

Amendments to the Uniform Business Practices of ESCOs.

Purpose:

To ensure consumer protection for ESCO customers.

Substance of proposed rule:

The New York State Public Service Commission (Commission) is considering amendments to the Uniform Business Practices (UBP) with respect to the criteria for the eligibility of energy service companies (ESCOs). The proposed changes, summarized below, are found partially in a report filed in Case 15-M-0127 by the Staff of the Department of Public Service on July 28, 2015 (Report), and partially in a Notice Seeking Comments on Resetting Retail Energy Markets for Mass Market Customers issued in Cases 15-M-0127, 12-M-0476 and 98-M-1343 on February 23, 2016 (Notice).

The Report proposes the following changes to the UBP:

1. Revisions to the application requirements for ESCOs seeking to gain eligibility including disclosure of decisions or investigations in other states that affect, or may affect, the ESCO’s ability to operate, identification of methods by which the Applicant intends to market to customers in New York, and the number of complaints on file with public utility commissions in other states. This information is intended to assist Staff in its review of applications to serve as an ESCO in New York, to ensure that applicants can comply with Commission requirements.

2. New requirements that ESCOs operating in New York have at least three years of experience in both financial risk management practices and customer service. An ESCO may demonstrate such expertise through the use of contractors.

3. A new requirement that ESCOs seeking eligibility should be assessed an application fee.

4. A new requirement to allow for denial of an eligibility application. Pursuant to this modification, simply completing the application alone would not automatically result in approval to operate in New York, as it does now. Instead, Staff may recommend that the Commission deny an entity’s application, with good cause shown, such as evidence of poor performance in other jurisdictions founded on decisions or regulatory action in other jurisdictions.

5. New standardized definitions of “fixed price” and “green energy.” The proposed definition of fixed price is “all-inclusive prices that will remain the same for the term of the contract.” ESCOs who market fixed price products would be required to do so only with products that conform to that definition. The proposed definition of green energy is "electricity from technologies identified by the Commission as RPS [Renewable Portfolio Standard] eligible," and limits use of that term to products conforming to that definition.

6. A new requirement that entities claiming to sell green energy must define to the customer in advance, the specific energy source fuel types of the electricity to be provided that are claimed to constitute the green energy.

7. New requirements that that ESCOs be required to use a standard contract for energy commodity service for residential customers, and that the “combined residential sales agreement” attached to the Report be utilized. These requirements are proposed in order to enable consumers to readily understand and compare contracts for energy commodity service.

8. Development of specific standardized contract language for energy commodity services on key contract provisions for non-residential customers, including: pricing and early termination fees; consumer protections; and procedures applicable to address disputes.

9. Modifications so that ESCOs deemed eligible to provide commodity service must begin serving customers within two years from the date of Staff’s eligibility letter. ESCOs which have not done so would have their eligibility to operate in New York rescinded and would have to reapply. These revisions are proposed to conserve the Staff and utility resources required to ensure compliance with application and other requirements for ESCOs deemed eligible but not serving customers.

10. An amended dispute resolution process to address disputes between ESCOs and utilities. The dispute resolution process now applicable to ESCO-utility disputes would be modified in several respects to enhance efficiency, including by establishing a strict end-date to the process, creating a standard simple form on the agency’s website to be used for all informal complaints, and establishing an expedited process to be used for emergencies that would reduce the steps needed to take action.

11. New provisions regarding the oversight of energy brokers to address an increasing number of complaints in which consumers allege that energy brokers provided inaccurate or misleading information concerning ESCO products and services. The proposed modifications would require ESCOs to identify and provide contact information for entities, including energy brokers, which market to customers on behalf of the ESCO, or sell lists of potential customers to the ESCO.

12. Development of a process by which existing ESCOs seeking to maintain their eligibility to operate in New York can complete a Supplemental Application which reflects any new requirements approved by the Commission. Under the proposal, ESCOs would have 90 days after a Commission Order on ESCO Eligibility to submit a completed Supplemental Application to the Department, or file with the Secretary a request for an extension of up to 90 days, including any justification for the additional time. ESCOs not submitting completed applications in the time required would be subject to having their authority to provide service in New York rescinded by the Commission without further process.

The Notice proposes the consideration of the following additional issues related to the UBP:

13. Changes to the to the three-day period for residential customer rescission/cancelation of an agreement with an ESCO.

14. Application of the rescission/cancelation period to small non-residential customers.

15. Whether and under what circumstances ESCOs should be required to post performance bonds or other forms of demonstrated financial capability.

16. Reconsideration of the framework for ESCO oversight under the Public Service Law.

17. What penalties may apply to ESCOs that violate the UBP or other Commission Orders or provisions of the PSL.

The Commission may adopt, reject or modify, in whole or in part, the relief proposed, 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-0127SP3)