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New York Consumer Protection Unit Intends to Propose Online Calculator of ESCO, Utility Costs at NiMo
August 28, 2012
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Copyright 2010-
The Utility Intervention Unit (UIU) of the New York State Department of State's Division of Consumer Protection said in the comments to the PSC that it intends to propose that Niagara Mohawk offer an online calculator on its website, "to assist current ESCO customers to determine whether it was beneficial for them to have switched to an ESCO."
UIU's statement came in support of releasing data contained in interrogatory responses from NiMo in response to the Public Utility Law Project (PULP), in NiMo's electric and gas rate cases (12-G-0202 et. al.). PULP had requested that NiMo provide, "any internal analysis of whether residential customers receiving commodity service from ESCOs whose charges are billed by Niagara Mohawk paid more or less than full (bundled) service customers for their electric or gas service for 2008 through 2011 and monthly for 2012 to date." In its response, Niagara Mohawk explained that its analysis compared the July 2011 and December 2011 ESCO customer billings to Niagara Mohawk's commodity costs for the same period.
PULP followed up that response by asking Niagara Mohawk to provide, "a price comparison of single bill residential ESCO natural gas and electric service with residential bundled service from National Grid for the most recent 24 month period."
The Retail Energy Supply Association objected to the interrogatories on several grounds, arguing that the interrogatories relate to private confidential billing information compiled by NiMo on behalf of each ESCO participating in the consolidated billing program, and that Agreement for Billing Services and For the Purchase of Electric/Accounts Receivable specifically states in Section 14.7 that it, "is not intended to confer any rights whatsoever on any third parties."
RESA also said that, "[t]here is also no rationale supporting the materiality or relevance of this data to the issues under review in this proceeding which involves setting the prospective rates of Niagara Mohawk."
New York PSC Staff has said that, "Given the broad standard for the scope of discovery in Part 5 and the very open nature of a rate case proceeding, it is premature to allege that PULP's discovery request is irrelevant as we have yet to see what PULP or other parties propose in testimony."
UIU said that disclosure of the information in the NiMo responses to PULP, "would provide New York's retail access consumers easily comparable pricing information for the very first time in more than a decade."
"The UIU intends to propose in its testimony modifications to various aspects of Niagara Mohawk's operations based on these data."
UIU said that the data should not be granted confidential protection because, although the data is ESCO-specific, NiMo's response does not identify ESCOs by name (and refers to them as Suppliers 1-45). PULP also noted that the information reflects total costs for commodity service, rather than specific ESCO prices.
"Financial harm to consumers by not disclosing this information trumps any scintilla of competitive harm to unspecified companies that may result from disclosure," UIU said.
"The data shows that in July 2011 and December 2011 a significant percentage, perhaps as much as three-quarters, of residential customers (including low-income customers) purchasing commodity from ESCOs paid in some cases greater than $20 more than they would have paid had they purchased commodity from Niagara Mohawk. This is disturbing," UIU said.
"It appears that for many ESCOs the amount of 'overcharge' on commodity completely negated the low-income discount on delivery. This suggests that the cost of the low-income programs, which are subsidized by the general body of ratepayers, is not well spent. While it may be argued that a generic retail access proceeding is the most appropriate forum to address the implications of the data, this analysis is relevant to this proceeding insofar as the data inform the UIU's position on the design and operation of Niagara Mohawk's outreach and education and low-income programs," UIU said.
"For instance, the UIU may propose in its testimony that Niagara Mohawk's customer service representatives should provide low-income customers a summary of the data so that these customers understand that purchasing commodity from ESCOs may not be cost effective," UIU said.
"Additionally, the implications of the data would support a proposal that, to begin the move toward price transparency, Niagara Mohawk should develop and launch an online bill calculator on its website to assist current ESCO customers to determine whether it was beneficial for them to have switched to an ESCO," UIU said.
"Central Hudson and National Fuel Gas Company have historical bill comparison tools on their websites that provide current ESCO customers the ability to compare what they paid over a period of 24 months with their ESCO and what they would have paid had they remained with their respective utility. The UIU intends to proposal that Niagara Mohawk provide a similar consumer tool," UIU said.
"The foundation concept of retail access is that free market competition would benefit consumers by providing lower rates and better service than the utilities are able to offer. Retail access exists primarily to benefit consumers; its purpose should not be to protect ESCOs from competition. Customers are protected and markets work more smoothly when various firm's prices are readily available in a manner that makes it easy to compare prices," UIU said.
Copyright 2010-
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