Energy Choice
                            

Matters

Archive

Daily Email

Events

 

 

 

About/Contact

Search

NEM: New York Should Not Institutionalize Disparity In Oversight of Distributed Resource Providers Versus ESCOs

June 8, 2017

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

Commenting on a New York PSC Staff white paper concerning PSC oversight of distributed energy resource suppliers (DERS) (see story here), the National Energy Marketers Association cautioned the PSC not to institutionalize disparity in treatment between DERS and ESCOs.

Staff’s latest white paper includes a revised proposal for a set of Uniform Business Practices unique to DERS (UBP-DERS).

NEM noted that the proposed UBP-DERS include expanding the marketing standards to include requirements for DERS regarding the training of marketing representatives, in-person contact with customers, and telephone contact with customers.

The UBP-DERS would be distinct from the UBPs applicable to ESCOs, which address similar (and more expansive) issues.

"NEM submits that the Commission should not grant non-ESCO DERS an unfair competitive advantage through the application of lower, less costly compliance obligations than are imposed on ESCOs through the existing UBP," NEM said

"ESCOs operating under the UBP must conform to extensive requirements for door-to-door, telephonic and internet enrollments, contract renewals, notice requirements and third party verification requirements, to name but a few. An ESCO selling commodity bundled with a DER product or service, or selling DER as a stand-alone product, would be at a significant competitive disadvantage in having to conform with the current UBP requirements coupled with UBP-DERS requirements. Creating this imbalanced compliance obligation, will cause ESCOs to incur higher costs to provide the same DER products and services as non-ESCO DER suppliers, thereby rendering ESCOs provision of these value-added services less economic and undermining ESCOs competitive value proposition to consumers. Neither the initial or supplemental White Papers offer any quantitative, substantive or rational basis to distinguish the compliance obligations imposed on these entities. Indeed, requiring ESCOs to conform to the regulatory compliance burden of the current UBP plus the UBP-DERS, while non-ESCO DERS would only have to comply with the UBP-DERS, to provide the same DER products and services is a distinction that cannot be justified," NEM said

While the white paper contemplates an eventual future consolidation of the ESCO UBPs and DERS UBPs, NEM said that, "[s]tarting off with a bifurcated approach to ESCO and non-ESCO DERS compliance will unfairly institutionalize the disparity in treatment between these entities, to the detriment of ESCOs and their customers."

NEM also opposed requirements for DERS to provide a comparison to utility prices in marketing materials.

"The supplemental White Paper and proposed revised UBP-DERS make a change to the prior proposal regarding DER marketing materials and sales agreements that include a reference to an estimate of future utility supply charges. Staff originally proposed that DERS marketing materials that make reference to utility supply charges “must use forecasts of energy commodity prices which reflect a multi-year average of actual historical prices or energy prices recently forecast by the applicable NYS utility.” Staff has revised that proposal such that, “estimates of future utility supply charges must be calculated based on actual utility supply charges over at least the past twelve months, as well as those actual utility charges plus and minus five percent.” NEM opposed the original proposal and opposes the revised proposal as well and for the same reason. It is inaccurate and misleading to institute the utility supply charge as the comparison point for any competitive products, services, information or technologies, including DER products and services. While Staff claims it 'will assist consumers in assessing the savings that can be expected from DER purchases,' this very metric undermines and misstates the potential perceived value of DER products and services," NEM said

"From a practical perspective, it is unclear how the determination of twelve months of utility supply charges will be made. Utility supply charges are subject to after-the-fact adjustments and reconciliations, and it is unclear how DERS will be able to factor those adjustments into the computation. These utility pricing adjustments prevent consumers from seeing real market conditions and distort the value of otherwise competitive products," NEM said

NEM also said that Article 2, Section 53 of the Public Service Law (on which the Staff white paper premises regulation of DERS marketing) does not apply to suppliers of distributed energy resources

NEM noted that Section 53 was added to Article 2, the Home Energy Fair Practices Act, by the Energy Consumer Protection Act of 2002, and, in doing so, NEM said that "[t]he legislature took deliberate and specific action to include ESCO commodity sales within HEFPA."

"The Commission cannot extend the applicability of HEFPA to entities supply[ing] DER without authorizing legislation," NEM said

"The legislature never intended Article 53 to apply to the supply of distributed energy resources, and the language included therein makes that clear. Article 53 provides that 'For purposes of this article, a reference to a gas corporation, an electric corporation . . . shall include, but is not limited to, any entity that, in any manner, sells or facilitates the sale or furnishing of gas or electricity to residential customers.' The initial White Paper rests its entire jurisdictional foundation on this quoted language without any analysis of whether it, in fact, is applicable to the supply of distributed energy resources," NEM said

In particular, NEM said that DER services such as demand response and energy efficiency, which reduce a customer's electricity usage, cannot be defined as falling under the scope of an entity that, "sells or facilitates the sale or furnishing of gas or electricity."

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
NEW! -- Operations Supervisor -- Retail Supplier -- Houston
NEW! -- Pricing Analyst -- Retail Supplier -- Houston
NEW! -- Director, Regulatory Compliance -- Retail Supplier -- Houston
NEW! -- Sales & Marketing Manager -- Retail Supplier
NEW! -- Pit Crew Analyst - Pricing, Contracting & Service Guru -- DFW / Irving
NEW! -- Sr. Energy Consultant
NEW! -- Manager of Regulatory Affairs -- Retail Supplier
NEW! -- Sales Support Specialist Energy Solutions -- Retail Supplier
NEW! -- Paralegal, Regulatory Affairs -- Retail Supplier -- Houston
NEW! -- EDI Transactions Manager -- Retail Supplier -- Houston

Email This Story

HOME

Copyright 2010-16 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.

 

Archive

Daily Email

Events

 

 

 

About/Contact

Search