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NY DPS Staff: ESCOs Should "Immediately" Take Action To Comply With Low-Income Service Prohibition, Return APP Customers To Utility Supply

Says Process Should Proceed Based On Information Already Provided By Utilities

September 13, 2017

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Reporting by Paul Ring • ring@energychoicematters.com

In a September 12 filing, New York Department of Public Service Staff disagreed with requests filed by several ESCOs, who had objected to Staff's interpretation that the process for returning Assistance Program Participant customers to utility supply should commence on September 25, and further said that the process should proceed based on the information already provided by the utilities (rather than updated lists sought by ESCOs)

"Although the ESCOs express concerns and complain about difficulties, the present situation is of their own making. As such, the ESCOs should immediately take every action to comply with the Commission’s Order as well as return low-income customers to utility service. It is worth noting that for the period January 2014 through June 2016 low-income customers in New York were overcharged by ESCOs in the amount of approximately $96 million – or an average of $3.1 million per month. Additional delay is contrary to the public interest," Staff said

"As a result of actions and requests by ESCOs, the transfer date has already been deferred by 6 months. The December 16, 2016 Order initially provided for the transfer of low-income customers to commence no later than March 16, 2017. That Order provided for a methodical approach for that transfer. In light of litigation initiated by the National Energy Marketers Association, the Retail Energy Supply Association, and various ESCOs before the Albany County Supreme Court, the Commission’s Secretary extended the implementation of the December 16, 2016 Order while the legal challenges were pending before that court. On June 30, 2017, the Albany County Supreme Court issued a Decision and Order upholding the Commission’s Prohibition Order, rejecting the challenges presented by the National Energy Marketers Association and the Retail Energy Supply Association, and denying an application for contempt brought by the National Energy Marketers Association against the Commission. Thereafter, the Commission’s Secretary made clear to all concerned entities that implementation of the December 16, 2016 Order would begin on July 26, 2017, with the transfer of customers from the ESCOs to the utilities to commence no later than August 25, 2017," Staff said

"Consistent with the Secretary’s notice, utilities provided information to ESCOs to facilitate the transfer of low-income customers to utility service. Utilities provided these lists on or before July 26, 2017. Thirteen days later on August 8. 2017, three ESCOs and a trade association asked the Appellate Division to stay the implementation during an appeal of the Albany County Supreme Court’s decision. A single justice issued a temporary order restraining the Commission from implementing the December 2016 Order and referred the stay motion to a panel of justices. On September 1, 2017, a panel of four Appellate Division justices unanimously denied the motion for a stay. The Appellate Division’s denial of the stay motion returned the litigants to where they were as of August 9 – which was 16 days before the August 25 transfer date, and one day before the ESCOs were to provide additional advance notification to customers," Staff said

"One argument offered to support a further extension is a speculative allegation that the lists provided by utilities to the ESCOs 45 days earlier – in late July – are no longer useful. Department Staff finds this argument unpersuasive. A customer is identified as an assistance program participant because the utility received a Home Energy Assistance Program (HEAP) payment on the customer’s behalf. HEAP runs from November to April. Customers would not have received a HEAP payment in August. Therefore, there would be no appreciable difference between the list the utilities compiled and provided to the ESCOs in July and a list that is compiled by the utilities today," Staff said

"Another argument presented in support of an extension is that the ESCOs purposefully did not review the information and lists sent to them by the utilities. IDT states that licensed attorneys instructed ESCOs to ignore or destroy the information sent by the utilities in July. These ESCOs argue that they now do not have sufficient time to inform customers that they will begin to be transferred to utilities on September 25. This again is a situation entirely of the ESCOs’ own making. On August 9 (the day the temporary court order was signed), the ESCOs were only one day away from having to send out advance notices so that they could comply with the Commission’s December 16, 2016 Order. Arguably, as of that date, the ESCOs should have already sent those notices in order to provide the customers 15 days’ notice. Moreover, the Appellate Division denied the motion on September 1, 2017, and the Department sent out its communication on September 7, 2017. Thus, the ESCOs effectively received additional time to facilitate the transfer of customers to the utilities. Having elected not to take steps to comply and facilitate the transfer of customers, IDT, Spark, Kiwi, and the other ESCOs are responsible for the consequences of their decisions. The utilities already have sent letters notifying the customers of the transfer from the ESCOs to utility service, see Order at p. 27, ¶5, and, thus, the customers have already received notice. Instead of seeking further delay, the ESCOs should also notify customers," Staff said

"With the denial of the stay motion and the lifting of the temporary restraining order, the implementation of the December 2016 Prohibition Order may continue. Accordingly, utilities and ESCOs must continue to implement the December 2016 Prohibition Order. Consistent with the Secretary’s July 18 notice and taking into account the limited duration of the August 9 temporary restraining order, it is Staff’s interpretation that the utilities and ESCOs shall begin returning low-income ratepayers to the utility service on or before Monday, September 25, 2017 – which was 18 days from Staff’s September 7 communication to the energy service companies and utilities in New York, and 24 days from the Appellate Division’s September 1, 2017 Decision and Order denying the stay motion presented by the National Energy Marketers Association, Bluerock Energy, Inc., Residents Energy, LLC, Verde Energy USA New York, LLC. As such, the ESCOs should immediately take every action to comply with the Commission’s Order as well as return low-income customers to utility service. Also, consistent with the Prohibition Order, ESCOs are now prohibited from enrolling new low-income customers in ESCO service," Staff said

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