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Update: New York Order On Regulation of Distributed Energy Resource Providers Provides Details On Required Consent, Standard Disclosures

October 20, 2017

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Copyright 2010-17
Reporting by Paul Ring •

As first reported by yesterday, the New York PSC adopted several customer protections and rules governing the marketing and sale of distributed energy resources (DER), via a set of uniform business practices, and a final order posted by the PSC provides further details regarding the new rules

The DER UBPs define Distributed Energy Resources (DER) as, "A broad category of resources including end-use energy efficiency, demand response, distributed storage, and distributed generation."

The DER UBPs define Distributed Energy Resource (DER) Supplier as, "A supplier of one or more DERs that participates in a Commission-authorized and/or utility or DSP-operated [Distributed System Platform] program or market."

Community Distributed Generation (CDG) Providers and On-Site Mass Market DG [distributed generation] Providers are included within the definition of DER suppliers

A CDG Provider is defined as, "An entity that is acting or planning to act as a CDG Sponsor for one or more CDG projects, or that is otherwise engaged in soliciting customers, members, or subscribers for a CDG project or CDG projects, through its own employees or agents, on its own behalf. A CDG Sponsor is the entity that organizes, owns, and/or operates a CDG project."

A contractor or other third party that provides services to CDG providers but does not meet that definition will not be considered a CDG provider or be required to register with the Department.

An On-Site Mass Market DG Provider is defined as, "An entity that is engaged in soliciting mass market customers for a project or service that involves the installation of distributed generation equipment, such as solar panels, on the property of those mass market customers, through its own employees or contractors, on its own behalf rather than as a contractor."

Mass Market Customer is defined as, "A customer that is within a distribution electric utility’s residential or small commercial service class and is not billed based on peak demand." Where a DER supplier or DER supplier marketing representative does not have sufficient information to determine whether a customer is a mass market or a large customer, that customer should be treated as a mass market customer unless and until the DER supplier or DER supplier marketing representative acquires sufficient information and determines that the customer is a large customer.

Under the PSC's order, all DER suppliers shall obtain a customer’s consent to a sales agreement prior to billing a customer or enrolling a customer in a DSP, utility, NYSERDA, Commission, or Department-run or authorized program.

"The sales agreement may be a written contract signed by the customer or the customer’s verbal or electronic authorization to enter into an agreement with the DER supplier for the products and services specified," the DER UBPs provide

As discussed in our story yesterday, additional requirements will apply to CDG Providers and on-site mass market DG providers

Among other things, CDG Providers and on-site mass market DG providers must file a registration with the PSC, which will be subject to the PSC approval for new providers

All active CDG and on-site mass market DG providers shall file a completed registration form, including a sample contract or contracts and sample bill or bills, by December 1, 2017.

The PSC will not impose an approval requirement on CDG and on-site mass market DG providers that are already in operation. Instead, Staff will review each registration and will contact the CDG or on-site mass market DG provider if any deficiencies or issues of concern are identified. If the CDG or on-site mass market DG provider fails to remedy those deficiencies or issues of concern, Staff should bring the matter to the Commission for consideration.

For new CDG and on-site mass market DG providers that begin operations in the State of New York on or after December 1, 2017, the Department shall review each registration package submitted within 30 days of submittal and notify the registrant, in writing, either that the registration is accepted as complete or that deficiencies exist in the registration package. New CDG and onsite mass market providers shall not market directly to customers until their registration has been approved.

As part of their registration filing with the PSC, CDG and on-site mass market DG providers shall include a sample contract or contracts for their generally available products or services with their registration filing. The sample contracts may contain placeholders or otherwise indicate that certain terms may vary from customer to customer. Sample contracts are required only for materially distinct categories of products and CDG and on-site mass market DG providers are not required to file new or updated sample contracts based on the modification of individual terms for particular customers, nor are CDG and on-site mass market DG providers required to file sample contracts reflecting individually negotiated agreements with non-residential customers.

Similarly, CDG and on-site mass market DG providers will be required to file sample bills for each materially distinct category of products and update those sample bills when material changes are made to their standard terms or format.

A completed Standard Customer Disclosure Statement shall be provided to all customers of CDG or On-Site Mass Market DG Providers as part of the sales agreement.

The information to be included in the Standard Customer Disclosure Statement, which will be developed by Staff, is included in Attachment 1 of the DER UBPs (click here, pages 80-81)

When marketing materials or information conveyed to mass market customers or potential mass market customers includes savings estimates, CDG and mass market on-site DG providers must include, in addition to any other forecasts used, a forecast using the following baseline: a three-year average of actual historical utility rates for the three most recent calendar years for which data is available, for the customer’s actual utility and service class. The provider may choose to apply an assumed escalation rate of up to 3% per year to this baseline in generating a forecast; if the provider does so, it must disclose the escalation rate used. The forecast generated must estimate savings for the same potential contract term as any other forecast provided. This forecast must be presented with similar prominence to other forecasts and all forecasts must be appropriately labeled to permit customers to understand their source.

The DER UBPs include various marketing standards applicable to in-person and telephonic solicitations by CDG and on-site mass market DG providers. Such marketing representatives who contact mass market customers in person at a location other than the provider’s place of business for the purpose of selling any product or service shall, before making any other statements or representations to the customer and among other requirements, introduce him or herself with an opening statement that identifies the provider which he or she represents; identifies him or herself as a representative of that specific provider; explains that he or she does not represent the distribution utility; and, explains the purpose of the solicitation.

Similar information must be disclosed in telephonic solicitations

All CDG and on-site mass market DG providers who have marketing representatives conducting door-to-door marketing must maintain a daily record, by zip code, of the territories in which the provider’s marketing representatives have conducted door-to-door marketing. The information should be in a form that can be reported to Staff upon request, and should be retained by the Provider for a minimum of six months.

Case 15-M-0180

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