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NY PSC Secretary Grants Limited Extension for ESCO Compliance With Low-Income Service Moratorium, Misinterprets APP Order in Doing So

August 15, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Stating that a requested 90-day extension for ESCO compliance is unnecessary, the Secretary of New York PSC has extended, by only 30 days, the deadline by which ESCOs must drop to default service customers initially identified by the utilities as no longer being eligible for ESCO service, due to their status as Assistance Program Participant (APP) customers.

Ordering Clause 7 of the PSC's July 15 order banning ESCO service to APP customers provides that, "Every energy service company eligible to serve customers in New York State shall, within 60 days of the effective date of this Order, de-enroll any customer accounts identified by the electric and gas distribution utilities pursuant to Ordering Clause 2 and 5 of this Order, provided that existing contracts will continue until their expiration."

ESCOs have noted that utilities are not required to submit lists of ineligible customers until 60 days after the effective date of the July 15 order (the same date by which ESCOs must de-enroll impacted customers), as ESCOs sought an extension for compliance with the requirement to drop customers to default service to the extent ESCOs are required to execute such drops on the same day they receive the information from the utilities.

Focusing solely on the Ordering Clause 7's language that, "existing contracts will continue until their expiration," the Secretary states "ESCOs are not required to de-enroll customers on the same day that they receive the list of customers identified by utilities as ineligible to be served by an ESCO, but instead must honor existing agreements."

"Therefore, de-enrollment would occur at the expiration of the existing agreement between the ESCO and the customer and not, as the Requestors [ESCOs] contend, on the same day they are notified which customers are ineligible to be served," the Secretary states

While the Secretary's reasoning may be sound with respect to fixed price contracts, the PSC's July 15 APP order unequivocally states that, "With respect to customers on variable rate, month-to-month contracts, the expiration of the agreement is at the end of the current billing period."

For these variable rate, month-to-month customers, "once the ESCO receives the communication from the utility that they are no longer eligible to serve a customer, the ESCO shall de-enrolled the customer at the end of the billing period, as it exists at that time," the PSC's July 15 APP order unequivocally states.

Depending on such variable rate, month-to-month customers' billing period, it is arguable that in some cases, ESCOs, absent any extension granted by the Secretary, would be required to de-enroll customers on the same day as notified by the utility, if such date also happens to be the end of the billing period for that customer

Moreover, adopting the Secretary's reasoning would render certain language in the PSC's Ordering Clause #7 from the July 15 order unnecessary, as the clause states that, "Every energy service company eligible to serve customers in New York State shall, within 60 days of the effective date of this Order, de-enroll any customer accounts identified by the electric and gas distribution utilities pursuant to Ordering Clause 2 and 5 of this Order, provided that existing contracts will continue until their expiration." If the PSC did not anticipate any immediate drops to default service (as arising from the immediate drop of monthly variable customers as described above), the PSC would not have needed to include the 60 day deadline in Ordering Clause #7, as it merely could have stated that de-enrollments shall occur at contract expiration.

In any case, despite stating that the PSC's July 15 order does not require ESCOs to de-enroll customers on the same day that they receive the list of customers identified by utilities as ineligible to be served by an ESCO, the Secretary stated, "an additional 30 days is granted to every energy service company eligible to serve in New York State to comply with Clause 7 of the Commission’s Order."

"An extension of 30 days will be granted to afford additional time in the event that a customer agreement expires shortly after the list of customers identified by utilities is received by the ESCO," the Secretary stated

As noted above, Ordering Clause 7 provides that, "Every energy service company eligible to serve customers in New York State shall, within 60 days of the effective date of this Order, de-enroll any customer accounts identified by the electric and gas distribution utilities pursuant to Ordering Clause 2 and 5 of this Order, provided that existing contracts will continue until their expiration."

Ordering Clause 2 directs utilities to provide to ESCOs a list of currently ineligible customers, and Ordering Clause 5 directs utilities to communicate any newly ineligible customers on a rolling basis.

The Secretary denied ESCO requests for extensions related to other ordering clauses, noting that those ordering clauses directed the utilities to take specific actions, and said that, as no utilities have sought an extension of such clauses, there is no basis to grant an extension

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