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NEM Seeks Rehearing Of New York Order Revising UBPs

Raises Concern On Changes Governing Assignment Of Contracts, In Addition To Changes Regarding Budget Billing, TPVs

February 20, 2018

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

The National Energy Marketers Association (NEM) has filed with the New York PSC a petition for clarification and/or rehearing of the PSC's Order adopting revised uniform business practices issued on January 19, 2018

Several of the issues raised by NEM in its petition were previously raised in requests to stay the deadline for compliance with the revised UBPs, such as issues concerning the definition of small non-residential customer and budget billing requirement, and are more fully discussed in our story concerning such requests.

NEM specifically requested Commission clarification and/or rehearing of the following revisions to the UBP:

1) The changes required under UBP Section 5.L.2. on voluntary ESCO budget billing and levelized payment plans are not warranted, cannot be accommodated under the current utility Rate Ready billing and would require extensive other billing process changes to implement. The current system for ESCO budget billing is working.

2) The definition of “small non-residential customer” should be reconsidered and clarified. It would prohibit technical implementation of the new TPV requirement under UBP Section 5.B.2. and should be deferred for consideration in the on-going Track I proceeding.

3) The TPV script question at UBP Section 5, Attachment 1, A.17, pertaining to a consumer’s participation in a low-income assistance program should not be incorporated into the UBP at this time given pending litigation. If such question is retained, it should be expressly limited to residential enrollments.

4) The change in wording to UBP Section 5.J.1. pertaining to ESCO assignment of sales agreements should be withdrawn because of the material change in compliance obligations created thereunder that are contrary to state law and the likely consumer confusion resulting from the change.

5) The ESCO representative badge information requirements as set forth in the Order should be expressed consistently with the requirements set forth in UBP Sections 10.C.1.b.1. and 10.C.1.d.

6) The inclusion of a compliance standard at UBP Section 2.D.5.o. that incorporates the undefined term “value added services and products” that is the subject of the on-going Track I proceeding should be deferred pending the outcome of that case.

As only reported by EnergyChoiceMatters.com, the revised UBPs also only allow assignment of an ESCO customer contract where the contract specifically allows for such action and customer notice is provided. Previously, assignment was allowed if the contract allowed assignment or the customer was provided notice. In assignments, the ESCO must provide an opportunity for each customer to choose another ESCO or return to full utility service

In its request for rehearing of this change, NEM said, "the Commission states of the change to Section 5.J.1. - 'nor will it affect the ability to make an assignment from one ESCO to another' - despite the fact that by changing the language to the term 'and' it is now requiring that assignments be authorized in the customer sales agreements. Such a requirement is contrary to New York law providing that generally, contracts are freely assignable. New York law provides that 'any claim or demand can be transferred' except in certain enumerated circumstances not relevant here, when such transfer is 'expressly prohibited' by statute or 'would contravene public policy.' [Gen. Obligs. Law § 13-101.] None of the exceptions are applicable here. The language revision to the UBP that effectively requires that 'the assigned sales agreements clearly authorize such assignment' is therefore contrary to New York state law and should be withdrawn."

As noted above, NEM previously raised issues with the definition of small non-residential customers in its petition for clarification, in which it highlighted inconsistencies as well as challenges with respect to the definition for gas customers

NEM in its rehearing request further said that, "The definition of small non-residential electric customer should also be reconsidered and clarified. Regarding the 2014 Order definition of small non-residential electric customers as 'an electricity customer in a utility service classification that does not have a demand rate element,' NEM reiterates its previously stated concern that the utilities have not uniformly provided demand meters to small business consumers. As such, this consumer protection rule would have arbitrary application to otherwise similarly situated customers. A standard should be utilized that is more closely tailored toward achieving the goal of protecting consumers that are in need of the extra element of protection."

Regarding the budget billing requirements, NEM said that, "Implementation of the changes required under UBP Section 5.L.2. will require significant stakeholder time and resources to evaluate and accomplish, if it can be achieved at all under current utility billing systems, including development of EDI transactions and billing processes. NEM submits that the current system for ESCO budget billing is working and that these changes are neither justified or warranted."

NEM noted that PSL § 38 does not include the quarterly evaluation requirement contained in revised UBP Section 5.L.2.

"The HEFPA regulations on budget billing at 16 NYCRR 11.11 provide that 'bills be subject to regular review for conformity with actual billings,' but do not specify a quarterly evaluation requirement. The Order does not discuss why a quarterly evaluation requirement was adopted, nor did the underlying Notice proposing the change," NEM said

"From a practical perspective, both of the new requirements in Section 5.L.2. cannot be performed under utility consolidated billing in a Rate Ready billing environment. In a Rate Ready environment ESCOs communicate the rate, not a billable amount, to the utility. The utility does not provide the ESCO with the usage amount. This fundamentally prohibits ESCOs from providing budget billing in a Rate Ready environment and has necessitated the accommodation of relying on utilities existing budget billing protocols to satisfy ESCO and ESCO customer requests for budget billing. In order to accomplish the changes under Section 5.L.2., the Rate Ready utilities would need to develop and implement something more akin to Bill Ready-type processes in order for ESCOs to provide the budget billing data to the utilities, and the utilities’ systems would need to change to allow ESCOs to control the customers’ budget billing amounts for the supply portion of the bill," NEM said

"Because of the manner in which Rate Ready billing works, there are no EDI transaction sets for Rate Ready billing that would support the quarterly evaluation requirement. There also aren’t any EDI transaction sets with the Rate Ready utilities that would allow ESCOs to 'provide that bills clearly identify consumption and state the amounts that would be due without levelized or budget billing.' The Rate Ready utilities do not have the systems in place to support ESCOs intervention into the budget billing process that would be needed to effectuate these changes," NEM said

"Another practical consideration associated with this change is the need for additional space to communicate the new information on the utility consolidated bill. The space on the utility consolidated bill is limited. It is unclear whether utilities have the space available on the consolidated bill to include this additional information. Even if it can be accommodated on the utility consolidated bill, it is not clear how long it will take for that change to be implemented," NEM said

"Finally, the impact on the payment hierarchy between delivery service and commodity service under Purchase of Receivables with the budget billing modifications should be clarified," NEM said

Infinite Energy, Inc. separately filed a request for rehearing as well.

Among other things, Infinite Energy said in its request for rehearing that, "The New York Public Service Commission ('the Commission') erred in adopting the following two modifications to the Uniform Business Practices: 1) requiring pursuant to UBP §5, Attachment 1.A that third party verification ('TPV') calls should be terminated if the customer asks any questions with respect to the agreement during the process, and 2) simultaneously requiring pursuant to UBP §5, Attachment 1.A (17) that the TPV call shall verify whether the customer participates in the utility’s low-income assistance program. These two modifications are at odds with each other."

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