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Updated: PSC Orders That Municipal Aggregations Must Provide Guaranteed Savings Versus Default Service To Serve Low-Income Customers

PSC Approves New Muni Aggregation Covering Seven Municipalities (Thus Far), Including City of ~30,000


(Earlier) Draft New York PSC Order: Municipal Aggregations Must Provide Guaranteed Savings Versus Default Service To Serve Low-Income Customers

(Earlier) Draft Would Approve New Muni Aggregation Covering Seven Municipalities (Thus Far), Including City of ~30,000

October 18, 2017

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

Updated: 11:30 a.m. 10/18/17

The PSC generally adopted the draft order discussed below

During a discussion at today's meeting, Staff said that the prohibition on muni aggregations serving APP customers, except where savings is guaranteed, will apply prospectively. Similar to how existing ESCO contracts were treated, Sustainable Westchester will continue to be allowed to serve APP customers, without a savings guarantee, under its existing ESCO contract. SW will be subject to the requirement for guaranteed savings to serve APP customers when entering into any new contract

Note: the draft discussion document on which our initial reporting was based specifically listed the, "City of Binghamton", in multiple instances, as being part of the MEGA filing package and having exercised Municipal Home Rule Law authority in order to initiate a CCA program. However, MEGA had sought authority for the Town of Binghamton. There were also other apparent discrepancies in how the included municipalities were described versus what MEGA had included (the draft listing the Town of Elmira vs the City).

A PSC press release listed the municipalities authorized to implement a CCA as follows: City of Elmira (Chemung County) and the towns of Oneonta (Otsego County), Montour (Schuyler County), Horseheads (Chemung County), Union and Binghamton (Broome County), as well as the Village of Montour Falls (Schuyler County).

The city of Elmira has a population of ~30,000

Earlier:

A draft discussion document (draft order) scheduled to be considered at today's New York PSC meeting would "clarif[y]" that the prohibition on ESCO service to assistance program participant (APP) customers, except where the customer is guaranteed savings versus default service, extends to opt-out municipal aggregations

The draft discussion document would make such clarification in proposing to approve, with certain modifications, the municipal aggregation, or community choice aggregation (CCA) implementation plan of the Municipal Electric and Gas Alliance, Inc. (MEGA)

The draft discussion document stated that, thus far, the following municipalities have approved municipal aggregations, with MEGA as their administrator: othe Town of Oneonta, Otsego County; the Towns of Horseheads and Elmira, Chemung County; the City of Binghamton and the Town of Union, Broome County; and the Town of Montour and the Village of Montour Falls, Schuyler County. (see note above about erroneous municipalities listed in draft discussion document)

Most notable from the draft order is the draft finding that municipal aggregations would only be permitted to serve APP customers in cases where the aggregations guarantee savings versus default service.

The draft discussion document noted that the PSC's prior APP order concerning a prohibition on ESCO service to APP customers, except where a waiver for a guaranteed savings product is granted, "explicitly exempts CCA programs from the prohibition but does not specifically state whether the guaranteed savings requirement extends to CCA programs."

The draft discussion document would provide that, "In this Order, the Commission clarifies that the guaranteed savings requirement does extend to CCA programs."

"Therefore, if MEGA intends to serve APPs, it must ensure that those customers are enrolled in a product that provides guaranteed savings by the ESCO or ESCOs that it selects to serve its customers," the draft discussion document provides

"Because CCA programs are exempted from the prohibition, neither MEGA nor its selected ESCO are required to apply to the Commission for a waiver in order to enroll APPs on the guaranteed savings product. However, MEGA and its selected ESCO shall make a compliance filing, prior to mailing opt-out letters, describing the guaranteed savings product that will be offered to APPs and demonstrating: (a) an ability to calculate what the customer’s total bill would have been if the commodity had been provided by the utility; (b) a willingness and ability to ensure that the customer will be paying no more than what they would have paid to the utility; and (c) appropriate reporting and ability to verify compliance with these assurances. Staff shall review this filing to ensure that it is consistent with the requirements in the Low-Income Order," the draft discussion document provides

"Because the Low-Income Order is implemented through a block placed by the utility on the accounts of APPs and customers with a block on their account are normally considered ineligible customers for the purpose of data exchanges between the utility and the CCA, modifications to those data exchanges are necessary to facilitate the participation of APPs in CCAs that offer guaranteed savings products for them. For a CCA that indicates that it intends to serve APPs, the utilities shall include, in creating the initial aggregated data set, data related to customers with utility-initiated blocks on their accounts and should also specifically break out the number of customers that fall into this category and the consumption of those customers. Subsequently, as part of the customer contact information, utilities shall provide a separate list containing contact information for customers with utility-initiated blocks on their accounts so that the CCA can ensure that those customers are enrolled in the guaranteed savings product. The CCA should also develop a tailored opt-out letter for those customers that explains the product they will be enrolled in, if they choose not to opt-out, and file that letter as part of the compliance filing regarding APP service described above," the draft discussion document provides

Turning to other issues, the draft discussion document would find that MEGA’s formation of Aggregation Groups to implement its opt-out aggregations is consistent with the PSC's CCA Framework Order

Utilities had raised concern with MEGA's use of aggregation groups, arguing that it was not consistent with requirements for individual municipalities to remain responsible for various requirements. The draft discussion document would reject these arguments

"MEGA, in its role as CCA Administrator, will be permitted to add municipalities to its Aggregation Groups, provided that it complies with the approved Master Implementation Plan and files a certification of local authorization for each municipality," the draft discussion document would provide

The draft discussion document would also reject the utilities’ objections to ESCOs participating in CCA outreach efforts under MEGA's plan. "The CCA Framework Order states that ESCOs are permitted to establish a direct relationship with CCA customers subject to the details of their contract with each municipality," the draft discussion document would provide

However, the draft would clarify that, "the customer list provided to a municipality and/or MEGA for purposes of the opt-out process must be used for that purpose only."

Furthermore, the draft discussion document would provide that, "MEGA’s Master Implementation Plan addresses the need to ensure that CCA customer data, such as contact information, is not used for inappropriate purposes, such as solicitation of business unrelated to the goals and objectives of a CCA program. However, once a CCA is formed after the opt-out process, a municipality interested in offering CCA participants other energy-related value-added services may do so through the ESCOs providing supply, through other DER providers, or both."

Additionally, the draft discussion document would provide that, "MEGA will also be required to file with Staff any request for proposal (RFP) seeking ESCOs or other suppliers for commodity supply or any other services."

"In addition, MEGA shall continue outreach and education once an ESCO is selected and before the opt-out period ends to ensure that residents are informed of the prices of commodity and service being offered by the contracted ESCO. This will ensure that residents have an opportunity to seek additional information and become well-informed regarding the details of the program’s rate before deciding whether to opt-out. Therefore, at least one additional meeting must be held in each municipality after an ESCO is selected and prior to opt-out letters being mailed to residents," the draft discussion document would provide

The draft discussion document would also clarify here that drafts of the opt-out letter shall be provided to DPS Staff at least five business days to allow Staff the appropriate time to review.

Concerning the billing of non-commodity services which may be offered by the CCA, the draft discussion document notes that the issue of billing non-supply distributed energy services is currently under consideration in another docket. "Until this issue is further examined, CCA Administrators, DER providers, or ESCOs working with a CCA Administrator are permitted to bill a member that elects, on an opt-in basis, to participate in a DER program or purchase a DER product separately. In the event a CCA Administrator, DER provider, or ESCO working with a CCA Administrator is able to work with a utility to develop a form of consolidated billing for those services, a proposal must be filed for the Commission’s consideration before implementation," the draft discussion document would provide

The draft discussion document would provide that customer account numbers shall not be shared with the CCA until after the opt-out process

"While customer account numbers were originally envisioned as useful information in the CCA Framework Order to clearly identify customers who were to be enrolled in the program after the opt-out process, the Commission now finds that the account numbers are not essential to identify customers to conduct the opt-out phase," the draft discussion document would find

Regarding a utility data sharing agreement (DSA) for CCAs, the draft discussion document would find that the DSA should not require the CCA Administrator to obtain and retain the customer’s written permission to receive customer specific information. "That requirement is not consistent with the opt-out regime that applies to the CCA program," the draft discussion document would provide

Case 16-M-0015

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