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Three NY ESCOs Seek Waiver To Serve Low-Income Customers With Guaranteed Savings Product

January 16, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Three New York ESCOs -- Ambit New York, LLC; Zone One Energy LLC; and National Fuel Resources, Inc. -- have filed separate petitions with the New York PSC for a waiver of the PSC's prohibition on ESCO service to assistance program participant (APP) customers in order to be able to offer a guaranteed savings product to APP customers.

Ambit Energy said in its petition that it has offered a guaranteed savings product for its customers since its entry into the New York market in 2007, and that, "Ambit's GSP [guaranteed savings plan] methodology and calculations have been fully vetted by the Commission."

Under Ambit's GSP, if the customer remains a customer of Ambit's Guaranteed Savings Plan for twelve consecutive months, the customer will save 1% annually versus the price the customer would have paid if the customer had been a full-service customer of the utility for the same period. Currently, Ambit's Terms and Conditions provide that, if the customer decides not to remain an Ambit customer for 12 consecutive months, Ambit Energy guarantees that the customer will pay no more for supply service than the customer would have paid as a full service customer of their incumbent utility for the same time period

Ambit sends out a notice to inform its GSP customers that their savings period is coming to a close, at least 30 days prior to the end of each customer's 12-month guaranteed savings period. After the savings period ends, and approximately 90 days later (based on meter read dates), Ambit Energy provides to its customers a cost analysis which provides the customer a summary of their savings with Ambit. If the customer did not realize an annual savings of at least 1%, based on their incumbent utilities' supply rates and charges, Ambit sends the customer a refund check along with their cost analysis. As a result, a customer is informed, approximately 90 days after their 12-month anniversary, whether they saved money with Ambit and, if they did not, they receive a refund check.

Ambit estimates that, since its introduction, Ambit's GSP product has saved New Yorkers in excess of $40 million when compared to incumbent providers.

In its petition, Zone One Energy LLC said that it has been providing New York City electric customers with a guaranteed savings product since the company first started selling electric supply in February 2015.

"The savings that Zone One Energy provides is based on applying a discount to what the customer would have paid had it purchased its electric supply under bundled service from the utility. The discount will be contractually specified as a percent reduction, and will vary from account to account based upon service classification and other associated factors. As such, Zone One Energy will be obligated to guarantee that the average rate that the customer pays is no more than the utility supply rate, less the contracted discount. The utility supply rate will be calculated using the same exact billing methodology that the utility would employ had the account purchased the same quantity of electricity under bundled service. Zone One Energy’s calculations will utilize the same rate tables, monthly adjustments and calculation methodologies that the utility would otherwise use, and apply the same taxes, in order to ensure that the discounted rate that is ultimately charged will indeed provide the agreed upon savings," Zone One Energy said

"If granted a waiver, we encourage the Commission to set up a protocol whereby ESCOs such as Zone One Energy must demonstrate their compliance with providing its low income customers with savings off their supply costs. This can be accomplished via the regular submission of billing data to the Commission or the associated utilities so savings can be verified. The timing of these data transfers can be either quarterly or monthly, or even randomly, if deemed appropriate by the Commission. Standardizations in the data transfer should be established in order to streamline the process, thereby creating efficiencies for both the ESCO and the verifying party," Zone One Energy said

National Fuel Resources, Inc. also submitted a waiver request related to the PSC's order. The details of National Fuel Resources, Inc.'s waiver request were filed under seal.

The New York PSC has extended the deadline for filing APP waiver requests, click here for our story on the new deadline

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