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New York ALJs Will Allow PSC Staff To Conduct Discovery On ESCO Profitability In Serving Large C&I Customers

ALJs Affirm Retail Market Evidentiary Review Limited To Mass Market, But Find Discovery Related To Large C&I Market Appropriate


May 24, 2017

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

The presiding ALJs in the New York PSC's evidentiary review of the retail energy markets have affirmed that the proceeding is limited to reviewing the mass market, but found that discovery related to the large C&I market is appropriate

The Retail Energy Supply Association and other ESCO intervenors had opposed discovery requested from Department of Public Service Staff related to the large C&I market, arguing that the scope of the proceeding was limited by the PSC to the mass market.

In a ruling, the ALJs agreed that, "the scope of these proceedings is, in fact, limited to an investigation into the retail market for residential and small non-residential customers."

"The expressly stated purpose of this Track I evidentiary proceeding is to consider: 'whether ESCOs should be completely prohibited from serving their current products to mass-market customers' and 'whether the regulatory regime, rules and Uniform Business Practices (UBP) applicable to ESCOs need to be modified” to implement such a prohibition or other remedial measures to transform the mass-market aspect of the retail access market,'" the ALJs said.

"We reiterate that the Commission has determined that, as currently structured, the competitive retail market is functioning well only for large C&I customers, while mass-market customers have been susceptible to unfair business practices and may not be receiving the benefit of any value-added services. Accordingly, the Commission commenced this track of these proceedings to investigate, among other things, what measures can and should be taken to reset or restructure the market for residential and small non-residential customers. In that connection, the December Notice clearly advised the parties that the Commission was going to consider various possible retail market transformations to ensure that mass-market customers 'receive valuable services and pay just and reasonable rates,'" the ALJs said

However, the ALJs said that discovery related to the large C&I market is appropriate

"To the extent that RESA and others seek to limit the scope of information subject to discovery in these proceedings, however, the Commission’s regulations make discovery available with respect to 'all information' that is 'relevant and material to [these] proceeding[s],' as well as 'any information likely to lead to such information.' Thus, even though the scope of these proceedings is limited to evaluation of the retail market for mass-market customers, discovery nonetheless is available with respect to a much wider range of data and information, so long as such information is likely to lead to information relevant and material to the investigation into why the retail market appears to be failing mass-market customers and what, if anything, can be done to improve it," the ALJs said

"In furtherance of that goal, the December Notice set forth 20 broad topics for testimony and exhibits, including topics specifically related to whether ESCOs should be subject to PSL Article 4 regulation and the question of whether, and how, ESCOs have been operating profitably," the ALJs noted

"In that regard, we are satisfied by Staff’s proffered justification for seeking information related to large C&I customers and ESCO profitability. As Staff asserts, the examination of data related to the retail market for large C&I customers may reveal valuable information to illuminate why that aspect of the market appears to be functioning well but the mass-market aspect is not. Data regarding ESCO profitability may reveal information relevant to, among other issues, the Commission’s concerns about mass-market customer abuses, including potential overcharges," the ALJs said

"Accordingly, in the interest of compiling as complete a record as possible for the Commission to consider in these proceedings, we decline to limit discovery in these proceedings to exclude data regarding large C&I customers and ESCO profitability," the ALJs said

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