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Report: Opt-Out Municipal Aggregation in New York Can Be Implemented Without Legislation
The only barriers to implementing opt-out municipal aggregation in New York are existing Uniform Business Practices wholly within the jurisdiction of the PSC, meaning that the PSC is empowered to authorize opt-out municipal aggregation if it so desires, notes a working group report on the PSC's Reforming the Energy Vision Proceeding.
Market participants must remember that New York is unique among the restructured states in that the PSC, not the legislature, was responsible for the restructuring of New York's energy markets. While certain legislation was subsequently implemented addressing discrete issues (such as consumer protection, including HEFPA and consumer bill of rights), the PSC still ultimately has authority to dictate many of the fundamental designs of the market.
One of these areas is apparently customer enrollment with ESCOs.
Specifically, a working group report, which is not a consensus document but a summary of various issues discussed by the group, identified the existing Uniform Business Practices as currently prohibiting opt-out municipal aggregation. To be fair, the report is not a legal treatise on the issues surrounding opt-out municipal aggregation in New York, so we stress conclusions from the report's discussion are our own.
However, the report did not identify any statutory barriers to aggregation, nor did it suggest that legislation would be required to authorize opt-out aggregation. Again, while the report was not intended to be a comprehensive look at potential aggregation barriers, to the extent there were clear and undisputed statutory barriers to opt-out municipal aggregation, we think they would have merited a mention. The silence of the report on statutory issues, to us, speaks volumes.
Legislation to unequivocally authorize opt-out municipal aggregation, statewide, had been proposed (A7896, S5500), but a bill addressing statewide municipal aggregation was not passed before close of the session. We have seen reports that a pared down version of the bill, which allows a pilot municipal aggregation(s) in Westchester County only, awaits the Governor's signature, but per the working group's overview, it would seem any such legislation is superfluous, and there is no legislative barrier to opt-out municipal aggregation.
This is consistent with recent slamming investigations against certain ESCOs, in which the PSC has alleged slamming as violation of the UBP, but did not cite any statutes implicated by the slamming behavior.
Here's what the report did say concerning implementation of opt-out municipal aggregation, or community choice aggregation (CCA):
"The Commission has promulgated a set of Uniform Business Practices (UBP) which governs the relationships between customers, ESCOs, and utilities. The UBP would not apply directly to municipalities undertaking CCA, but the restrictions that they create would impact the ability of ESCOs and utilities to work with CCA programs. For example, the UBP defines and forbids 'slamming' which is defined as '[a] change of a customer to another energy provider without the customer's authorization'. The UBP also establish detailed processes for the transition of a customer to an ESCO. In an opt-out CCA, customers would be switched to an ESCO without having expressly authorized the switch; ESCOs may worry that would constitute slamming. The UBP also contain provisions on the transfer of customer information and requires express customer consent. Municipalities undertaking CCA programs will need data on the customers in their jurisdiction in order to negotiate with ESCOs, provide proper notifications, and implement agreements. The UBP rules do not allow transfers of data from distribution utilities to municipalities, or any other third parties, without the customer's consent. UBP rules on transfer of customers and customer information would need to be modified to accommodate the CCA process."
"In order to implement CCA, the Commission's Uniform Business Practices would need to be modified to allow the provision of customer data to a municipality and an ESCO and the enrollment of customers with an ESCO without customer authorization. CCA is a method of migrating large numbers of customers to an ESCO," the report concludes.
ADVERTISEMENT Copyright 2010-
July 9, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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