New York PSC Grants Waiver From Code of Conduct To Allow Utility To Co-Market, With Utility Name And Logo, Weatherization Service From Third Party Brand

May 15, 2020

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York PSC granted a waiver to the Brooklyn Union Gas Company d/b/a National Grid NY ('KEDNY'), KeySpan Gas East Corporation d/b/a National Grid ('KEDLI'), and Niagara Mohawk Power Corporation d/b/a National Grid ('Niagara Mohawk') (collectively 'National Grid' or the 'Companies') to allow the utilities to enter into an arrangement with a third-party provider of weatherization and home energy efficiency services that would include use of the KEDNY, KEDLI, Niagara Mohawk, and/or National Grid names and/or service marks by such third party, alongside the third party's own logo, in the marketing and offering of such services.

The PSC granted the code of conduct waiver after determining that the utilities' code of conduct prohibits such co-marketing, and the PSC denied National Grid's request for a declaratory order concluding otherwise

As previously reported, the National Grid companies said that they were contemplating an arrangement with Sealed to market Sealed's home weatherization services. The utilities had said that the arrangement includes 'co-marketing' elements, whereby the KEDNY, KEDLI, Niagara Mohawk and/or National Grid corporate names, service marks, logos, etc. would appear alongside the Sealed name, service mark, logo, etc., and would be used by Sealed for marketing the Sealed Program.

See more background on the proposed co-marketing here

Family Energy opposed the relief sought by National Grid (story here)

In summarizing its order, the PSC stated, "Based on a review of National Grid’s code of conduct, the Commission determines that the proposed use of National Grid’s name would violate the Companies’ existing code of conduct. However, because the proposed affiliation with Sealed will help promote energy efficiency and because Sealed has successfully completed the distributed energy resource provider (DER)registration [sic] process and thereby commits to all the requirements of the uniform business practices for DERs (UBP-DER), which incorporates several important consumer protections, the Commission authorizes the waiver of the relevant code of conduct provisions. Also, to ensure that Sealed does not receive an exclusive benefit, and to encourage National Grid to pursue similar benefits for ratepayers, National Grid is ordered to revise its code of conduct regarding co-marketing with third parties to promote energy efficiency programs and services."

In terms of National Grid; sought declaratory ruling that the co-marketing is not prohibited under the code of conduct, the PSC said, "Given that the Companies’ code of conduct explicitly states that 'no non-National Grid company will be allowed to use the same name, trade names, trademarks, service names, service marks or a derivative of a name of RegCo in any manner,' the Commission finds that the Companies’ proposed collaboration with Sealed is prohibited. The Companies’ request for a declaratory ruling to the contrary is therefore denied."

However, the PSC ruled that a waiver is appropriate for the reasons stated below

Addressing Family Energy's competitive concerns about the co-marketing, the PSC said, "While the Commission understands the value of opening energy service to third parties, and the need to avoid utilities using their monopoly status to favor one party over another, the Commission’s fundamental purpose is to ensure safe and adequate utility service at just and reasonable rates. The introduction of competitive entities into monopoly utility service may serve that purpose, but where it does not, the Commission has acted to restrict or redirect marketplace activity. Sealed’s program is intended to help ratepayers finance weatherization improvements to their residences through the energy savings realized from the improvements. Ratepayers benefit from lower energy bills, and the utilities benefit from lower demands on their energy supplies."

"The Commission does not see the value of preventing National Grid from co-marketing with Sealed to offer this service to its ratepayers. Family does not claim that its business will be harmed by granting National Grid’s petition, and in the Commission’s view, abstract marketplace concerns do not outweigh concrete ratepayer benefits. As is noted in the petition, other utilities already co-market with Sealed. Prohibiting National Grid from doing so because of a unique feature of its code of conduct, when other utilities’ ratepayers already have access to the Sealed program, would be irrational," the PSC said

"Based on the fact that an affiliation with Sealed has the potential to provide energy efficiency benefits to National Grid’s customers, the Commission concludes that the proposed arrangement with Sealed, including the use of National Grid’s name and logo, is in the public interest. Further, because Sealed has registered as a DER provider in New York and therefore agrees to abide by the UBP-DER including all of the therein identified consumer protections the Commission believes Sealed’s services have the potential to bring material benefits to consumers. The Commission therefore waives the prohibition in the Companies’ code of conduct to allow for co-marketing with Sealed in a manner consistent with that of the other utilities’ co-marketing," the PSC said

"The Commission rejects Family’s request to deny the waiver based on the argument that such action would provide Sealed with an unfair advantage as compared to other energy service providers. The actions taken herein allow other third party energy service providers, offering comparable benefits and agreeing to these terms, the same level of access and therefore no unfair advantage exists," the PSC said

"Although the Commission is granting a waiver for National Grid’s co-marketing with Sealed, relying on individual waivers for future cooperative energy efficiency efforts would be cumbersome and result in delays in offering and providing such services to ratepayers," the PSC said

"The Commission, therefore, directs National Grid to revise section 3.6.1 of Niagara Mohawk’s code of conduct and section 6.1 of KEDNY and KEDLI’s code of conduct to allow for future co-marketing opportunities with third party providers of energy efficiency services. Specifically, the sections shall be revised to include the language contained in Appendix A of this Order. The Commission also requires National Grid to maintain and routinely provide a list of its third-party energy efficiency partners with whom they are co-marketing," the PSC said

Under the language in Appendix A of the PSC order, "...no non-National Grid company will be allowed to use the same name, trade names, trademarks, service names, service marks or a derivative of a name of RegCo in any manner, except for the purposes of assisting with the marketing of Commission approved energy efficiency programs."

Case 19-G-0690

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