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Impacted ESCO Coalition Seeks Extension Of Compliance Deadline For New York UBP Revisions, Citing Ambiguity With Application Of New Definition Of Marketing Which Encompasses "Direct In-Person Contact" (Including Applicability To Informal Personal Communications)

February 15, 2018

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

The Impacted ESCO Coalition (IEC) filed a request with the New York PSC for an extension of time to comply with Section 1 of the recently revised Uniform Business Practices (UBP) which modified the definition of "marketing" under the UBP to include, "direct in-person contact."

Under the PSC's January 19 Order revising the UBPs, marketing is now defined as, "The publication, dissemination or distribution of informational and advertising materials regarding the ESCO’s services and products to the public by print, broadcast, electronic media, direct mail, telecommunication, or direct in-person contact," with the term, "direct in-person contact," newly added

"It is unclear whether the revised definition of marketing would apply to kiosk sales or informal personal communications between individuals that would result in enrollment with an ESCO, and therefore the IEC requests additional time to allow requests for rehearing and/or clarification to be submitted and ruled on by the Commission," the IEC said

The IEC sought an extension of 90 days with regards to compliance with the new definition of marketing to allow for requests for rehearing and/or clarification to be submitted and ruled on by the Commission:

The IEC also sought 45-day extensions with regards to the following other provisions of the revised UBPs:

1) Budget Billing (amendments to UBP Section 5.L.2, regarding voluntary budget billing and levelized payment plans);

2) Third Party Verification & Enrollments (extension of TPV requirements to the enrollment of small non-residential customers resulting from door-to-door sales, telephonic enrollment and scheduled appointments under the revision to UBP Section 5.B.2; UBP Section 5, Attachment 1.A; UBP Section 5, Attachment 2.A); and

3) Marketing (amendments to UBP Section 5.B.4, to require Sales Agreements be in a font size of 10 or larger; changes to the information to be displayed on the badges of ESCO marketing representatives under the revisions to UBP Sections 10.C.1.b.1 and 10.C.1.d.)

Regarding the budget billing requirements, the IEC said, "An extension of time for compliance will aid ESCOs in understanding the scope of changes associated with amended UBP Section 5.L.2. Specifically, the amended language in UBP Section 5.L.2. requires ESCOs to offer voluntary budget billing under which the ESCO 'is responsible for determining the budget bill amount and must evaluate each budget billed account on a quarterly basis for conformity with actual billing.' Currently, there are no EDI transaction sets for Rate Ready billing that would support this quarterly requirement, nor do the Rate Ready-based utilities have the systems in place to support ESCOs intervention into the budget billing process. In other words, ESCOs are not provided with the requisite data from the utilities about the customer’s budget bill amount for the supply portion of the bill to perform the newly-required quarterly evaluation. To date, Rate Ready utilities have handled budget billing on behalf of ESCOs and their customers using their own budget billing protocols."

"UBP Section 5.L.2 would also require voluntary ESCO budget billing plans to 'provide that bills clearly identify consumption and state the amounts that would be due without levelized or budget billing.' Currently, there are no EDI transactions with the Rate Ready utilities that would support providing that information. The availability of an EDI transaction to provide this information from Bill Ready utilities is being investigated. Additionally, it is unclear whether utilities have the space available on the consolidated bill to include this information," the IEC said

"Implementation of the changes required under UBP Section 5.L.2 will require significant stakeholder time and resources to evaluate and accomplish, including development of EDI transactions and billing processes. For these reasons, the IEC submits that a forty-five (45) day extension for ESCO compliance is reasonable," the IEC said

Regarding the TPV requirement, the IEC seeks clarification with regards to the definition of "small non-residential customer."

"The definition of 'small non-residential customer' included in footnote 4 of the Order references the definition in a 2014 Order, which was subject to Petitions for Rehearing or Clarification, stayed by the Commission, and then ultimately withdrawn from the UBP in 2015. The 2016 Reset Order then adopted a definition of 'small non-residential customer' that differed from the 2014 Order with respect to natural gas customers; however, the 2016 Order was subsequently vacated and remitted to the Commission for further proceedings," the IEC said

"The 2014 Order definition would present an additional problem for ESCO compliance with respect to small non-residential natural gas customers, because of its broad reference to 'a natural gas customer in a service classification that provides firm service.' In practice, the ESCO is not able to ascertain by EDI transaction whether a customer is firm or non-firm, and therefore subject to the TPV requirement, prior to submitting an enrollment," the IEC said

"Moreover, the question of whether there should be a specific definition of 'small commercial,' and the exact parameters thereof, is currently being briefed as part of the evidentiary hearing. Therefore, the IEC requests clarification of the term as used in the UBP, or in the alternative, that the Commission uses the definition as determined through the evidentiary hearing process," the IEC said

Regarding the font size changes, the IEC said, "An extension of forty-five (45) days would greatly assist companies to ensure compliance with the requirement to have all contracts in a minimum size 10 font. ESCOs routinely have several different sales agreements to reflect different products and services, and the extension of time will also allow them to fully review all sales agreements to ensure they are fully compliant with the new UBP."

In a separately filed request, Direct Energy Services, LLC, on behalf of itself and its affiliates doing business as Energy Service Companies ("ESCOs") in New York (collectively, "Direct Energy") requested a thirty (30) day extension in the date for compliance with two requirements established in the Commission’s Order Adopting Revised Uniform Business Practices issued in this proceeding on January 19, 2018 (the "Order") as they apply to small nonresidential customers:

(1) the requirement of UBP §5.B.4 that the standard Sales Agreements for large nonresidential customers be written in a font size 10 or larger; and

(2) the requirement for verification of sales agreements with small nonresidential customers employing the services of Energy Brokers.

Direct Energy said in its request that, "Direct Energy has had no difficulty converting its standard Sales Agreements for residential and small nonresidential customers to size 10 font. However, its Sales Agreements for large nonresidential customers are provided to the customer in electronic format and contain embedded links to Direct Energy’s billing system that require substantial programing to change. Direct Energy anticipates that this programming work will be completed on or before March 22, 2018. Accordingly, Direct Energy respectfully requests a thirty (30) day extension in the due date for converting its standard Sales Agreements for large nonresidential customers to size 10 font."

Direct Energy said in its request that, "Direct Energy is in the process of developing the forms and procedures required for verification of sales to mass market customers resulting from scheduled appointments. For Direct Energy, the vast majority of these transactions involve small nonresidential customers, as Direct Energy does not presently employ scheduled appointments for residential customers. While Direct Energy anticipates that its own sales force will be able to comply with these new requirements as they apply to small non-residential customers, a portion of such sales involve Brokers retained by the customer. Direct Energy plans to train the Brokers that it works with to comply with these new requirements, but has concluded that this training cannot be developed and implemented by February 19, 2018. Accordingly, Direct Energy respectfully requests an additional thirty (30) days to implement this training."

Direct Energy also supports the request of the Joint Utilities for clarification and an extension of time to comply with the requirements of UBP §5.L.2 requiring ESCOs to calculate budget bills for customers connected to utilities operating rate-ready billing systems.

"Direct Energy supports the portions of the Joint Utilities’ February 13, 2018 Request for Clarification and Extension of Time ('Request') seeking clarification that in the case of utilities with rate-ready billing systems, budget billing should be performed by the utility rather than by the ESCO. As the Joint Utilities note in their Request, ESCOs do not have timely access to the information required to prepare budget bills, and nothing in section 38(1) of the Public Service Law prohibits ESCOs from contracting for the performance of these services with the utilities that are the only entities in a position to prepare such budget bills. Accordingly, Direct Energy supports both the clarification of UBP§5.L.2 and the 30 day extension of time requested by the Joint Utilities in their Request," Direct Energy said

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