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Direct Energy: Analysis Shows New Yorkers Could Have Saved $18 Billion By Shopping For ESCO

Direct Energy Cites Errors In Utility Data Relied Upon For ESCO-Default Service Comparisons


September 18, 2017

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

In testimony in the New York PSC's evidentiary review of the retail energy mass markets, Direct Energy presented an analysis showing that New Yorkers could have saved $18 billion by shopping for an ESCO from 2011-2016

Direct Energy compared the lowest "clean" ESCO electric variable and 12-month fixed product offers posted on the New York power to choose website for the period of 2011 to 2016 to electric utility residential default variable tariff rates for the same time-period. A "clean" product is an ESCO offer where both the offer price and term are defined and the offer price does not change at any point throughout the defined term.

The analysis compared costs if the customer had selected the lowest relevant ESCO product each month versus the utility rate, for 2011-2016

"The analysis shows that had electric residential customers chosen the lowest clean ESCO variable price offer posted on power to choose each month a typical residential customer would have saved an an [sic] average of $123 and $212 per year depending on utility and the total New York wide market savings could have reached over $18 billion," Direct Energy said in testimony

"The analysis further shows that had electric residential customers chosen the lowest clean ESCO 12-month fixed price offer posted on power to choose New York wide market savings could have been over $1.6 billion," Direct Energy said

Direct Energy also cited certain errors in the data provided by the utilities which filed comparisons of ESCO versus default service costs on a total bill basis

"In addition to the missing and incomplete data previously discussed I found that many of the data records were suspect and since the underlying work papers used to compile this data were not provided I question at least some of the data’s validity," Direct Energy's witness said

"For example, I found a data record where the derived monthly utility commodity bill for a residential low income customer was $241.08 and the corresponding ESCO bill was $3,288,144 ... Obviously, this data record is faulty since a residential customer would not have incurred a $3.2 million ESCO bill for home use," Direct Energy's witness said

"However, I was only able to identify it because it is an extreme case. I have no way of knowing if less extreme cases are necessarily correct. As such, I do have to question the data’s validity," Direct Energy's witness said

Other issues cited by Direct's witness included:

• Records where the ESCO weighted average price in dollars per kWh was less than zero.

• Records where total customer usage was zero.

• Records where the utility weighted average bill price was five times or more the matching ESCO weighted average bill price.

• Records where the ESCO weighted average bill price was five times or more the matching utility weighted average bill price.

• Records where the ESCO weighted average price was greater than $500 per MWh or $5 per kWh.

• Records where the ESCO weighted average price was greater than $5 per Therm.

• Records where the ESCO weighted average price was greater than $5 per CCF.

Nearly 1000 records in the data included one of the above issues

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