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RESA Says NY PSC Secretarial Notice Instituting Review of Retail Mass Market Exceeded Secretary's Authority

Says DPS Staff Inquiries on ESCO Profitability, C&I Data Exceed Proceeding's Scope

April 13, 2017

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

The Retail Energy Supply Association filed a motion with the New York PSC to suspend the evidentiary and collaborative tracks initiated in the PSC's retail energy market review, "on the ground that they are being conducted pursuant to a Notice that exceeds the authority of the issuing party, the Secretary of the Commission."

"The Notice instituting these proceedings was issued by the Secretary to the Commission, with no apparent authorization from the Commission or any of the Commissioners," RESA alleged in its motion

"The Notice, therefore, violates the procedural requirements of the Public Service Law ('PSL') and the Commission’s Rules and Regulations (16 N.Y.C.R.R)," RESA alleged in its motion

"Under PSL Section (11), '[a]ny investigation, inquiry or hearing which the commission has power to undertake or to hold may be undertaken or held by or before any commissioner or before any specially authorized officer or employee of the commission.' Similarly, PSL Section 66(11) provides the Commission with the power 'either as a commission or through its members, or through an officer or employee specially authorized to conduct an investigation or hearing to subpoena witnesses, take testimony and administer oaths to witnesses in any proceeding or examination instituted before it...' Section 4.1 of the Commission’s Rules and Regulations also reads: '[h]earings will be held in cases where required by law and in such other cases as the Commission may direct.' 16 N.Y.C.R.R § 4.1. Thus, the statutes and rules governing the Commission’s conducts specifically grant the authority to commence an evidentiary proceeding to the Commission," RESA said in its motion (all emphasis in story added by RESA)

"Under PSL Sections 8 and 11, the Commission also has power to delegate authority in appropriate circumstances to staff. PSL Section 8 specifically provides: 'The chairman, by certificate filed in the office of the commission may from time to time, specially authorize any officer or employee of the commission to conduct any investigation or hearing, which the commission is authorized to conduct, to take testimony in respect of the subject or matter under investigation, and report the testimony to the commission, and in the conduct of such investigation or hearing such officer or employee shall have all the powers of a commissioner,'" RESA said in its motion

"However, nowhere in these proceedings was there any official delegation of power to the Secretary to initiate hearings," RESA said in its motion

"As it relates to notice, 'The time and place of each hearing may be determined by the Commission, the Secretary, or the presiding officer. Notice of hearings, specifying time, place, and purpose, will be given in accordance with statutory requirements and such additional requirements as the Commission, the Secretary, or the presiding officer may direct.' Although the Secretary is authorized to provide notice of the Hearing, prior to the Secretary’s Notice, as discussed above, there was no public filing of a Certificate to indicate that the Chairman had directed the Hearing and/or specially authorized the Secretary to direct a Hearing. Therefore, the Notice is invalid, and further proceedings should either be suspended until a proper Notice is issued, or held in abeyance while the parties seek further relief from the Commission on this issue," RESA said in its motion

Alternatively, should the ALJs decline to suspend the proceedings, RESA moved to limit the scope of the proceedings to exclude issues relating to large commercial and industrial customers and ESCO profitability.

RESA said that on February 21, 2017, Department of Public Service Staff propounded an Information Request on utilities seeking comparative bill information for large commercial and industrial customers

"RESA is seriously concerned over the ramifications of Staff’s attempt to broaden the scope of these proceedings. Accordingly, RESA asks the ALJs to clarify that the scope of the proceedings is limited to issues relating to mass-market customers, and that issues relating to large C&I customers are not proper subjects of discovery or testimony," RESA said in its motion

"The Notice defined the scope of the issues for these proceedings. Nowhere in the Notice is there any indication that that scope embraced concerns relating to large C&I customers. To the contrary, the Notice could not have been clearer that the sole focus is on residential and small non-residential customers, which it defined as 'mass-market customers', and not on non-mass market large C&I customers," RESA said in its motion

Furthermore, RESA said that, on April 3, 2017, DPS Staff propounded an Information Request to all ESCOs seeking extensive information on ESCO profitability, asserting that the Notice required that ESCO profitability for a recent period of time be examined in this proceeding

"RESA acknowledges that the Notice (at par. 12) invites comment on whether ESCOs’ price offerings 'ha[ve] been profitable or resulted in a loss to the ESCO.' However, ESCO profitability would only be a relevant subject of inquiry if ESCOs were subject to Commission regulation under PSL Article 4, which they are not. Moreover, subjecting their profitability to regulatory scrutiny would defeat the primary purpose of precluding Article 4 regulation of ESCOs. For those reasons, the ALJs should rule that ESCO profitability is not a proper subject for discovery or testimony in these proceedings," RESA said in its motion

"While the Notice calls for an examination of whether Article 4 should be applied to ESCOs, subjecting ESCOs to oversight of their profitability would put the cart before the horse by applying that Article to ESCOs before the Commission completes that examination," RESA said in its motion

Concerning RESA's motion, the PSC's press office said that motion will be reviewed and considered and responded to in an appropriate manner.

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