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NY ESCOs Given Only 30 Days To Petition For Waiver of Low-Income Service Ban

December 19, 2016

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

The New York PSC has given ESCOs only 30 days from the effective date of the PSC's December 16 order prohibiting ESCO service to low-income customers to seek a waiver of the prohibition through the offering of a guaranteed savings product

EnergyChoiceMatters.com was first to report that the PSC's latest order adopting the prohibition on ESCO service to Assistance Program Participant (APP) customers included the potential for ESCOs to serve low-income customers through a guaranteed savings product. The PSC's written order, issued December 16, provides further details regarding this waiver provision.

"[T]he Commission remains open to the concept of allowing ESCOs to serve the APP market if they are willing to guarantee that they will save dollars for these customers and develop a process to ensure that the putative savings do in fact occur. Accordingly, if an individual ESCO wishes to offer a guaranteed savings program to APP customers it may petition the Commission for a waiver of the prohibition," the PSC said.

However, any ESCO seeking a waiver must do so within 30 days.

"[W]ithin 30 days of the issuance of this Order. ESCOs seeking such a waiver must be able to demonstrate their willingness to develop a program that ensures delivery of the claimed savings. These assurances should include at a minimum the following: (a) an ability to calculate what the customer would have paid to the utility; (b) a willingness and ability to ensure that the customer will be paying no more than what they would have been paid to the utility; and (c) appropriate reporting and ability to verify compliance with these assurances. In the event an ESCO requests such a waiver the Commission will review it and, in addition to the above elements, will consider other conditions it determines are necessary to protect consumers," the PSC said.

While the only waiver permitted under the current order is for a guaranteed savings product, the PSC said that it, as it evaluates ESCO product offerings more generally in its mass market review, "remains open to reconsidering aspects of the prohibition where ESCOs demonstrate the ability and desire to achieve savings for these [APP] customers.

"In the second track of that [mass market] process, a collaborative will be convened to continue consideration of value-added products and services for residential customers. If that effort identifies products which result in demonstrated savings to customers, the Commission will reconsider the prohibition on ESCO service to APPs with respect to such products," the PSC said

The PSC's December 16 order prohibiting ESCO service to APP customers otherwise adopts the prohibition and associated implementation mechanisms as set forth in prior PSC orders (including clarifications)

Notably, APP customers are defined as those who receive HEAP benefits and are enrolled in utility low-income programs.

As more fully described in our prior stories on the prior orders, with respect to APPs who are currently ESCO customers, within 60 days of the effective date of the December 16 order, the utilities will communicate to the ESCO which accounts the ESCO is no longer eligible to serve.

Within 30 days receiving the communication from the utility, the ESCO shall then de-enroll the identified accounts at the expiration of the existing agreement.

"With respect to customers on month-to-month contracts, the expiration of the agreement is at the end of the current billing period," the PSC said

"Regarding products where the term is month-to-month, but the customer receives a gift, such as two months of free service, if the customer remains with the ESCO for a designated period, such as six or 12 months, the ESCO should continue to serve the customer until the end of the gift term even though those agreements are month-to-month. This would also be true for agreements that guarantee savings with respect to the utility rate, to the extent they exist, and which effectuate the guaranteed savings through a true-up at the end of a specified time period. With respect to these types of products, the agreement, although month-to-month, will be deemed to expire at the end of the billing period on which the guaranteed savings true-up is provided to the customer. To do otherwise would deny the customer of a potential benefit that was a consideration in entering into the agreement. However, this is not to be construed as creating an ERVA that is an exception to the prohibition on APP service. Therefore, only those 'gift-term' agreements that were in effect prior to the issuance of this Order will be permitted to continue until expiration of the gift term," the PSC said

"[O]nce the ESCO receives the communication from the utility that they are no longer eligible to serve a customer, the ESCO shall de-enroll the customer at the end of the billing period in progress 30 days after receiving the communication from the utility," the PSC said

The PSC stressed that, "ESCO [sic] are still required to comply with the customer notice requirements of UBP §5.H.4.a, which requires an ESCO to provide customers 15 days’ notice of a drop back to utility service."

Consistent with its prior order, the prohibition on ESCO service to low-income customers does not apply to service through opt-out municipal aggregations.

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