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PULP: Over Half of ESCO Volumes To Low-Income Customers Priced At Least 44% Higher Than N.Y. Utility's Default Service

August 31, 2016

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

The "vast majority" of low income customers obtaining their supply from an ESCO at National Fuel Gas Distribution in New York paid more than they would have if they had purchased it from the utility, the Public Utility Law Project of New York claimed in testimony in an NFGD rate case, citing average ESCO cost data made public by the utility under discovery.

"[M]ore than half of the gas volume ESCOs supplied to the Company’s low income customers during the period in question was priced at least 44.6% higher than gas supplied by the Company," PULP said

See PULP's data here:

Summary Chart

Additional Charts

Citing the data, PULP said that, "over consecutive twelve month periods (TMEs) ending from December, 2014 through April, 2016, low income customers obtaining gas supply from an ESCO paid ever-increasing percentages more for their gas than they would have from the Company."

"ESCO supplied gas cost 14.2% more than Company supplied gas for the TME ending December, 2014. By March, 2016, ESCO supplied gas was higher priced by 25.6%. And for the TME ending April, 2016, the cost of ESCO supplied gas was $2,637,783 or 25.0% more than Company supplied gas," PULP said

PULP further said that the data, "also shows that for the TME ended April, 2016, most of the ESCO gas volume sold to low income customers was at least 44% higher in price than Company supplied."

Quoting an NFGD description of the data, PULP said, "10.32% of Low Income residential NGS customer usage has paid 55.1% more than NFG costs and 50.17% of Low Income residential NGS customer usage has paid 44.6% more than NFG costs."

"Using average monthly bills as a proxy for monthly customers, I [PULP's witness] calculated that 11,728 customers (77.1% of the total of 15,219 average monthly customers) paid $2,787,591 (34.9%) more to an ESCO for gas than they would have if they had been supplied by the Company. Monthly, the typical customer in this group paid $19.81 more by choosing ESCO supply. Only a small minority saved money: 3,491 customers (23%) saved an average of 5.8% or $149,808. In this group, the typical customer saved $3.58 monthly," PULP said

"These exorbitant prices on more than half the volume of gas the ESCOs sell are contributing to the utility affordability problems of the Company’s low income customers because they result in an increase to monthly bills of the vast majority of low income customers by an average of almost $20 per month. This amount exceeds, on an annualized basis, the total assistance provided by the Company’s low income discount to HEAP recipients by 284% ($20 * 12 = $240 divided by $12.50 * 5 = $62.50). Therefore, for these customers, ratepayer funded low income discounts serve merely to subsidize ESCO overcharging of low income customers - and only partially at that," PULP said.

PULP cited the data in support of greater low-income funding, but said that its requested three months of additional discounts, "are likely to primarily act as a further subsidy of ESCO overcharging."

"[R]emedies for this problem are beyond the scope of this testimony and proceeding," PULP said

Case 16-G-0257

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