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New York DPS Staff Provide Guidance To ESCOs On Filing New Applications For Continued Eligibility To Serve Mass Market

Staff To Consider Compliance History Of ESCO's Management, Contractors In NY, Other States In Reviewing Eligibility

February 11, 2020

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Reporting by Paul Ring •

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Staff of the New York Department Of Public Service provided guidance to ESCOs regarding Staff's review of ESCO eligibility applications.

As previously reported by, all ESCOs seeking to offer service to mass market customers will be required to submit a new retail access eligibility application form.

Staff stressed that nothing in its guidance document should be viewed as either supplementing or altering the terms of either the December 12, 2019 Order Adopting Changes to the Retail Access Energy Market and Establishing Further Process or the Uniform Business Practices (UBP). "Rather this guidance document is being provided as a resource to ESCOs," Staff said

Staff said that the following procedure for the Staff Review of ESCO eligibility shall be effective after the effective date of the UBP, May 11, 2020

No later than 30 calendar days after the effective date of the UBP, all currently operating ESCOs that wish to continue serving mass market customers must file an application in accordance with the newly modified UBP.

If a currently operating ESCO fails to submit its new application within 30 days of the effective date of the UBP, it shall be immediately and automatically suspended from entering into any new agreements with customers.

A Retail Access Application Form (RAAF) and additional documents will be requested.

Information and documents required to be filed by ESCOs include the typical requirements under the RAAF and UBPs, and some notable additions. Notable materials which must be filed include:

• Sample copies of mass marketing promotional materials

• A list of the entities, including contractors and sub-contractors, that will market to customers on behalf of your ESCO;

• Quality Assurance Program containing:

     --- Description of training program (Note whether In-person or Telephonic);

     --- Independent third party (TPV) verification script (UBP Section 5, Attachments 1-3);

     --- Code of Conduct;

     --- Marketing representative identification badge;

     --- Customer services performance monitoring program and quality assurance procedures;

     --- Internal customer dispute resolution procedures and processes;

     --- Any internal customer satisfaction metrics, to the extent the ESCO has any.

• Complaint history, including individual complaint narrative and ultimate resolution, for the past two years for the ESCO's New York operations;

• Complaint history, including individual complaint narrative and ultimate resolution, for the past two years for other jurisdictions the ESCO operates in; and

• Information regarding enforcement actions in other jurisdictions over the past two years

Staff said that it will contact other State Public Service Commissions to review complaint data and compare any such data to information on complaints that was disclosed by the ESCO.

Staff will also contact other State Public Service Commissions to obtain information on any enforcement actions and will compare such information to information disclosed by the ESCO

Staff will use information provided by the ESCO and other State Public Service Commissions to either permit the ESCO to continue eligibility or recommend revocation of eligibility to Commission.

If Staff finds there are no issues with the application and information provided by other State Commissions acceptable, the ESCO will receive a letter from Staff notifying them that the review is complete and that they satisfy the requirements of eligibility.

If Staff finds there are deficiencies with the application (after attempting to resolve the deficiencies) and/or the information provided by other State Commission(s) cause concern, Staff will provide a detailed report of those deficiencies and will make a recommendation to the Commission that the ESCO should not be permitted to continue eligibility in the State of New York.

ESCO applicants shall be afforded an opportunity to provide information in support of its application to the Commission before a final determination is made.

For New ESCO Applications, ESCOs will not be eligible to operate in New York State until its application has been approved by staff or the Commission. For ESCO's that already have eligibility, they will remain eligible until Staff has determined otherwise.

Staff further said, "In addition to ensuring that each ESCO has submitted all required documents, staff will evaluate the materials in considering whether to grant eligibility or recommend to the Commission a denial or revocation of eligibility. In evaluating marketing materials and sales agreements, Staff will ensure that those marketing materials and sale agreements do not contain any false or misleading information. Staff reviews these marketing materials and sales agreements to ensure they are written in plain language that is not intended or likely to deceive customers as to the nature of the product they are receiving or with respect to the terms and conditions of the agreement. Sample notices provided with the application will also be reviewed to ensure accuracy and clarity. Staff further reviews these materials to verify that claims being made in ESCO marketing materials and sale agreements are not inconsistent with laws, rules, or regulations."

Staff will consider the history of ESCO managerial staff and contractors, as well as complaint history, in determining whether an ESCO shall maintain its eligibility

"With respect to information collected regarding an ESCO's managerial staff, contractors, and sub-contractors, Staff reviews instances where senior management has been engaged in, or has worked for ESCOs that have engaged in, violations of law, regulations or rules, including those violations that occurred in other jurisdictions. In instances where an ESCO employs senior management or hires contractors and/or subcontractors that have a history of legal noncompliance and/or disregard for relevant customer protections, Staff may recommend that the ESCO's eligibility be denied or revoked. Staff will also review the ESCO's criminal and regulatory sanctions during the previous 36 months. Based on the data received, Staff will determine whether it is appropriate to recommend either denying or revoking eligibility based on the severity of the sanctions," Staff said

"Further, with respect to information collected regarding an ESCO's complaint history in New York and other jurisdictions, Staff reviews the complaint data, type of complaint and number of complaints received. Staff will look to see if the complaints were determined to be valid, and if the ESCO resolved the complaint to the satisfaction of the consumer. If it is found that there is a trend of complaints, or complaints were not resolved an appropriate manner, Staff may recommend the ESCO's eligibility be denied or revoked," Staff said

"Likewise, staff reviews whether the ESCO proposes adequate procedures for preventing slamming and cramming, an adequate quality assurance program, and sufficient policies and procedures for protecting customer data. In addition, staff will assess information related to past data breaches related to customer proprietary information. Staff considers all of the aforementioned issues in determining whether to grant eligibility or whether to make a recommendation to the Commission that eligibility should be denied or revoked," Staff said

Staff said that it will periodically review ESCOs eligibility, in addition to annual and triennial compliance.

Case 15-M-0127

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