TransCanada Power Marketing Seeks Clarification of Residential Customer Definition Under Revised New York UBPs

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January 26, 2011

TransCanada Power Marketing Ltd. applied for clarification and/or rehearing of the New York PSC's December decision revising the Uniform Business Practices to incorporate the ESCO Consumer Bill of Rights and related provisions, in order to ensure a consistent definition of a residential customer (98-M-1343).

As only noted in Matters (12/20), the PSC, in its revised UBP order, held that, "where the utility classifies a multi-metered account as commercial but the account contains a limited number of residential meters or service points, the customer should be considered a commercial customer."

"However, if a non-residential customer has multiple accounts, and the utility classifies one or more accounts as residential, the accounts classified by the utility as residential must be treated as residential for purposes of implementing [the Consumer Bill of Rights and related provisions]," the PSC said.

TransCanada sought clarification that the term "residential" as used in the UBP order has the same meaning and effect as that used by the Commission in its implementation of the Home Energy Fair Practices Act (HEFPA) rules.

Under the HEFPA rules, at a high level, residential customers are essentially defined as individual residential customers who apply for and take service, thereby excluding multi-unit dwellings or other similar accounts which may be served under a residential rate class, but for whom the account holder is a business or other non-residential entity.

TransCanada noted that accounts associated with multi-unit apartment buildings may be classified by the utility as residential even though the party that has contracted for supply with the ESCO is a commercial party, such as a landlord.  Applying the provisions of the Consumer Bill of Rights to such circumstances, such as the limits on termination fees, "would create a significant disincentive for ESCOs to serve this market, thus depriving commercial consumers of the benefits of competition, and would likely increase costs for the tenants as increased costs are passed through to them," TransCanada said.

"TransCanada believes if ESCOs must limit termination fees to $100, $200 or twice the estimated monthly amount for commercial customers, ESCOs will be subject to unnecessary financial risk for substantial sums of money on commercial transactions because hedges, used to mitigate risk and reduce costs to customers, will become ineffective, thereby increasing costs."

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