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Updated: New York PSC Won't Adopt Host Of ESCO UBP Changes At This Time (Such As TPV Requirement For New Sales Channel)

Now-Shelved UBP Changes Had Also Included Limits On Contract Assignment, Limits On ESCOs Acting As Customer's Agent

September 23, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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The New York PSC has issued a written order disposing of requests for rehearing and clarification of its January 2018 order which had adopted numerous changes to the Uniform Business Practices (UBPs) applicable to ESCOs, and the written order confirms that, aside from two discrete changes to the UBPs, the PSC is not adopting the other January 2018 UBP changes at this time

As exclusively first reported by, last week, during discussion of the order on rehearing at last week's PSC session, Staff said that the order adopted by the PSC included two discrete changes to the UBPs -- the omission of a door-to-door agent's last name from an ID badge, and prohibiting early termination fees in the case of death (as further discussed below)

The written order now makes clear that those are the only two changes that the PSC is adopting at this time, and that the PSC is essentially withdrawing the other previously adopted changes to the UBPs that were included in its January 2018 order.

As previously reported, the January 2018 order had notably adopted the following UBPs changes:

• Under the January 2018 Order, ESCOs, for residential and small non-residential customers, shall conduct, "an independent third party verification," for any sale resulting from a scheduled appointment, in addition to door-to-door and telephonic sales

• Under the January 2018 Order, a customer may authorize an ESCO to act as the customer’s agent (ESCO agent) in establishing a new delivery account for distribution utility service. However, under changes adopted in the January 2018 order, the customer’s ESCO Agent is not authorized to cancel a pending enrollment, an enrollment with a different ESCO or utility, or place and/or lift utility account blocks where a customer has authorized a change in provider, the new UBPs provide

• Under the January 2018 Order, ESCOs must ask as part of the TPV, "Do you participate in your utility’s low-income assistance program?"

• Under the January 2018 Order, 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. An ESCO shall provide a written notice no later than 30 calendar days prior to the assignment or transfer date to each customer and distribution utility.

• Under the January 2018 Order, every ESCO shall offer residential customers a voluntary budget billing or levelized payment plan for the payment of charges. 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 billings. Each such plan shall provide that bills clearly identify consumption and state the amounts that would be due without levelized or budget billing.

All of these changes in the bulleted list have now been withdrawn under the order on rehearing

As previously reported (story here), the UBP changes contained in the PSC's January 2018 order have been subject to rehearing requests from ESCOs, with extensions granted for compliance with such revisions. Notable among the prior changes subject to rehearing requests is requiring a TPV for a sale conducted during a scheduled appointment (see more on the UBP changes adopted in January 2018 below)

In addressing the petitions for rehearing, the PSC ordered that the only two UBP modifications resulting from the January 2018 Order that shall be adopted are: (1) the omission of a door-to-door agent's last name from an ID badge, and (2) prohibiting early termination fees in the case of death (as further discussed below)

The PSC in its order on rehearing said that, "the only UBP modifications resulting from the January 2018 Order adopted here are those made to UBP §1 prohibiting the assessment of early termination fees in the event of an account holder’s death, and those made to UBP §10 revising the requirements pertaining to marketing representative identification, as clarified herein."

The PSC noted that parties had argued that other changes to the UBPs adopted in January 2018 -- apart from the two discrete changes listed above -- were not properly noticed. ESCOs had alleged that all of the changes adopted in the January 2018 order, apart from the badge name and early termination fee (ETF) issues noted above, were not properly noticed, because a notice of the proceeding only specifically identified the badge name and ETF issue, while also stating that, "other related matters and housekeeping items," may also be addressed in the proceeding. The Retail Energy Supply Association, for example, alleged that the adopted changes were neither "related matters" nor "housekeeping items," and therefore had not been properly noticed.

The PSC said in its order on rehearing, "The Commission is committed to providing both the industry stakeholders and the consumers that the UBP is designed to protect with an opportunity to comment on modifications made to the UBP. Here, we weigh the importance of the timely implementation of the specific rules at issue against multiple parties’ assertion that they did not receive adequate notice of several of the related modifications adopted in the January 2018 Order -- specifically, those modifications not expressly described in the initial notice of proposed rulemaking."

"Based on the particular circumstances here, the Commission grants rehearing with respect to these modifications and declines to adopt them at this time. Our discretionary determination to not adopt these particular proposed provisions at this time renders academic parties’ specific challenges to the legal sufficiency of the notice of these unadopted provisions as well as all other arguments regarding these provisions," the PSC said in its order on rehearing

"The Commission may seek to address the remaining UBP modifications at a future date after further opportunity for public comment," the PSC said in its order on rehearing

Concerning the two discrete changes to the UBPs that were adopted by the PSC, the PSC provided clarification that the UBP will now require ESCO marketers to identify themselves by identification badges with a first name and an individualized identification number, rather than a badge with first and last name (the January 2018 UBP had included the term "full name" despite ostensibly adopting the first name/badge number mechanism)

"The Commission hereby clarifies that the ESCO marketing representative’s last name shall be removed from the marketer’s name badge as reflected in the changes made to UBP §§10.C.1.b.1. and 10.C.1.d. Thus, a marketer’s identification shall only include the marketer’s first name and an employee identification number," the PSC said on rehearing

"As to the second substantive provision, the Commission adopts UBP modifications that reflect existing statutory law: ESCOs are prohibited from charging a customer a fee for termination or early cancellation because that customer has died during the pendency of his or her ESCO contract," the PSC said on rehearing

These two discrete amendments to the Uniform Business Practices described above were adopted prospectively and apply to new ESCO service agreements and to renewals of current ESCO service agreements effective 30 days from the effective date of the PSC's order on rehearing, and thereafter, the PSC ordered

While the PSC mostly found that ESCOs' arguments concerning notice were rendered moot by the PSC's discretionary determination to not adopt the suite of originally ordered UBP changes, aside from the two discrete changes noted above, the PSC did address a few specific arguments concerning the SAPA notice process

Among other things, the PSC found, "Regarding RESA’s assertion that the Commission’s rulemaking authority is undermined due to the fact that it did not provide the full text of the proposed rule because it did not post a redline of the entire UBP, this argument misreads -- and consequently misapprehends -- the requirements of SAPA. The proposed rule at issue in the present proceeding is the specific changes to sections of the UBP. SAPA does not require notice of already adopted rules for which no change is proposed. Here, there was no proposed rulemaking with respect to the remaining unaltered provisions of the UBP. Thus, RESA’s logic is unmoored from the clear, common sense purpose of SAPA; to apprise the public of potential rule changes. Accordingly, and as is relevant here, the Commission complied with SAPA when it posted redline text identifying the language adopted here regarding identification badges and protections for deceased ESCO customers," the PSC said

The version of the UBPs adopted by the Commission can be found here, starting on page 19

Case 98-M-1343

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