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New York ESCO Seeks Further Extension Of Deadlines For ESCOs To Offer Products Compliant With PSC's Reset Order, Other Provisions
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Family Energy, Inc. petitioned the New York PSC for an extension of the compliance deadline of various ordering clauses under the New York PSC's retail energy market reset order, stating that various issues remain unresolved.
See background on the New York reset order here. The reset order, among other things, includes limitations on the products that ESCOs may offer to mass market customers
As previously reported, on January 22, 2020, the Secretary to the Commission extended the deadline for several ordering clauses, setting forth a deadline of May 11, 2020 for ESCOs to comply with Ordering Clauses 1, 2, and 5, and a deadline of June 8, 2020 for ESCOs to comply with Ordering Clause 6(The ordering clauses are noted below). Family Energy requested that Ordering Clauses be further extended.
Family Energy said that, "key questions raised at [a] technical conference have not been answered or addressed."
Family Energy said, "As the Commission considers the Rehearing Petitions, the Department of Public Service (“DPS”) held a technical conference on January 22, 2020 to discuss questions regarding compliance with the Order (“Technical Conference”). At the Technical Conference, ESCOs, utilities, and DPS Staff identified key questions and issues regarding how to interpret various requirements of the Order. Many of those questions and issues remain outstanding, pending further consideration by DPS Staff and/or the Commission. It is Family’s understanding that DPS Staff and/or the Commission will be issuing guidance on many critical outstanding issues, or alternatively, that the Commission would address them in a subsequent order providing for rehearing or clarification. Some of these unanswered questions include, but are not limited to, clarification on the precise definition of mass market customers, particularly with respect to operational classifications of customers with demand meters that are not billed on a demand basis; further guidance on which types of products can be renewed and under what circumstances affirmative consent would be required; to what extent an ESCO can offer a renewably-sourced electric product comprised of the minimum required threshold of UBP-compliant Renewable Energy Credits that includes additional environmental attributes which are otherwise not consistent with the locational and delivery requirements of the Clean Energy Standard; and precisely which cost elements would be included in the twelve month trailing average calculation. These issues, among others, must be fully understood in order to develop and implement compliant products and services. Family respectfully requests that the Ordering Clauses be further extended to allow for these issues to be addressed and resolved so that market changes can be implemented in a fair, orderly, and efficient manner."
Family Energy also said that, "the issues raised in the rehearing petitions and public comments have not been answered or addressed."
Family Energy also said, "On March 2, 2019, the Secretary to the Commission (“Secretary”) extended the deadline by which comments on the Rehearing Petitions may be submitted to April 13, 2020. Even if all comments are submitted on April 13, 2020 and expeditiously reviewed by DPS Staff, the earliest point at which the Commission could issue an order providing for clarification, reconsideration, or rehearing would be at its May 14, 2020 Commission Session, which will be held four days after the deadline by which ESCOs must comply with Ordering Clauses 1, 2, and 5 of the Order. Ordering Clauses 1 and 2 prohibit ESCOs from enrolling or renewing mass market customers unless the enrollment is compliant with the product restrictions set forth in the Order, and Ordering Clause 5 makes the revised Uniform Business Practices effective. Making effective the key provisions of the Order before the Commission issues an order providing for clarification, reconsideration, or rehearing would impose significant administrative and operational burdens on ESCOs that are seeking in good faith to comply with the Commission’s directives."
"Unless an extension is granted, ESCOs would need to rapidly devise eligible product offerings and sales strategies, draft contracts for such product offerings, receive approval for such products from DPS Staff and/or the Commission, finalize and distribute eligible contracts, product offerings, and marketing materials to sales representatives, and train those sales representatives, all without fully understanding key details of the Order. Indeed, Family has submitted draft contracts consistent with the requirements of the Order. Notwithstanding that there only approximately 60-days until the deadline, these new contracts have not yet been approved. This, unfortunately, places Family in a “Catch 22” situation where it may need to notify expiring customers but does not yet have approved contracts for forward marketing of new Order-compliant products," Family Energy said
"Moreover, notwithstanding Family’s proactive efforts, the significant time, cost, and expense it has invested in the development and implementation of the Order may ultimately need to be entirely revamped upon the Commission’s order providing for clarification, reconsideration, or rehearing. The duplicity of costs and human resources associated with such an effort is a significant and unnecessary administrative burden that runs contrary to a fair, orderly, and efficient transition," Family Energy said
"For the reasons stated above, Family respectfully requests that the Ordering Clauses be further extended to allow for DPS Staff and/or the Commission to address key questions and issues raised in both the Technical Conference and in the Rehearing Petitions and forthcoming comments thereto. Such an extension is in the public interest and would promote the fair, orderly, and efficient transition to new product offerings and business models set forth in the Order," Family Energy said
Family Energy did not seek a specific amount of time for which the compliance with the ordering clauses should be extended
The relevant ordering clauses from the original reset order, whose deadline were already extended once to the dates listed above, are as follows:
1. Consistent with the body of this Order (Section III) and subject to any exceptions identified therein, effective 60 calendar days from the date of this Order, energy service companies (ESCOs) shall enroll new residential or small nonresidential customers (mass-market customers) or renew existing mass-market customer contracts for gas and/or electric service only if at least one of the following conditions is met: (1) enrollment includes a guaranteed savings over the utility price, as reconciled on an annual basis; (2) enrollment is for a fixed-rate commodity product that is priced at no more than 5% greater than the trailing 12-month average utility supply rate; (3) enrollment is for a renewably sourced electric commodity product that (a) has a renewable mix that is at least 50% greater than the ESCO’s current Renewable Energy Standard (RES) obligation, (b) the ESCO complies with the RES locational and delivery requirements when procuring Renewable Energy Credits (RECs) or entering into bilateral contracts for renewable commodity supply, and (3) there is transparency of information and disclosures provided to the customer with respect to pricing and commodity sourcing.
2. Consistent with the body of this Order (Section III.D.3), effective 60 calendar days from the date of this Order, any mass-market customer contract for a fixed-rate commodity service that is subject to automatic renewal shall be renewed by the ESCO only as a contract for variable-rate, commodity-only service that includes a guaranteed savings over the utility price, unless the ESCO obtains affirmative customer consent to renew the contract as a fixed-rate contract that is priced at no more than 5% greater than the trailing 12-month average utility supply rate.
5. Revisions to Section 2 and Section 5 of the Uniform Business Practices are adopted in accordance with the discussion of the body of the Order. The revisions shall be effective 60 days following the date this Order is issued.
6. ESCOs currently operating in New York that intend to continue to renew contracts with customers in New York and/or enroll new customers in New York following the effective date of Ordering Clause No. 1 (i.e., 60 calendar days following the date of this Order) are directed to file an application in accordance with the body of this Order no later than 30 calendar days following the date the revisions to the Uniform Business Practices become effective (i.e., no later than 90 calendar days following the date of this Order).
8. Electric and gas distribution utilities that have tariffed provisions providing for retail access are directed to file tariff amendments or addenda to incorporate or reflect in their tariffs the Uniform Business Practices revisions approved in Ordering Clause No. 5. The tariff revisions shall be filed, on not less than one day’s notice, to become effective on or before February 10, 2020.
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March 10, 2020
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Reporting by Paul Ring • ring@energychoicematters.com
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