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N.Y. PSC Approves State's First Opt-Out Municipal Aggregation

February 27, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The New York PSC has approved, as a demonstration project, an opt-out municipal aggregation for Westchester County to be developed by Sustainable Westchester (SW).

"[I]t is appropriate to approve a CCA [community choice aggregation] demonstration project, in order to gain experience with CCA programs and explore their potential benefits for consumers, municipalities, and the utility system," the PSC said.

"However, the SW Petition lacks the detail necessary to fully evaluate some of the proposed provisions of its CCA program. For now, a determination will not be made on issues related to the establishment of an energy efficiency tariff, demand response and micro-grid development and financing, the insertion by municipalities of communication material into utility-issued bills, or the Open Underwriting Resource Service fund," the PSC said.

The PSC also called SW's proposed ten day opt-out period, "inadequate." For this pilot project, the opt-out period shall be at least twenty days, the PSC ruled.

"The Commission has had a longstanding policy, underlying the Uniform Business Practices and implementation of retail choice programs, that affirmative customer consent is required in order for a customer to change suppliers. However, the economies of scale and bargaining power that large-scale opt-out aggregation programs create are expected to translate into tangible benefits for customers. In order to help ensure costs savings or rate stability for CCA participants, the Uniform Business Practices are waived to the extent necessary to allow for the enrollment of customers and transmittal of customer information by the utility to the ESCO without express customer consent only for this specific CCA demonstration program," the PSC said.

SW had sought a four-year pilot, but the PSC said that it would be premature to approve a pilot for four years, instead directing that SW file an annual report on the CCA.

The PSC directed utilities to provide aggregated customer data for residential and small commercial customers who are not currently taking service from an ESCO to the municipalities that have been properly authorized to implement the CCA pilot.

Before ruling on whether any costs should be recovered for providing this data, the PSC directed ConEd and NYSEG to provide specific costs and justification for recovery.

Upon selection of an ESCO the municipality or its consultant should request from the utilities the information necessary to send the opt-out letter, including, at a minimum, customer names, addresses, and account numbers. Discrepancies between the customer information provided by the utility and similar information retained by the municipality should be resolved by the municipality, the PSC said

"It is the municipality's responsibility, however, to notify its residents and small commercial customers of its decision to establish a CCA Program, to inform them of the contract terms with an ESCO, and to inform them of the opportunity to opt-out of the CCA program. The municipality could send the opt-out letter itself or provide a co-branded opt-out letter from the municipality and the ESCO that will be providing the services. The letter should, at a minimum: explain community choice aggregation and the ESCO contract in detail; identify the methods by which the customer can opt-out of the CCA Program; and provide information on how the customer can access additional information about CCA on the municipality's website. A draft standard form letter shall be submitted to DPS Staff for review before it is mailed," the PSC said.

The PSC said that SW may recover administrative costs of the CCA through the aggregation rate, but may not under the pilot impose additional surcharges to fund various distributed energy resources.

Case 14-M-0564

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