New York DPS Staff File Updated Guidance To ESCOs Regarding Review Of Continuing ESCO Eligibility

November 23, 2020

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Staff of the New York Department of Public Service issued an updated guidance document for the periodic review of ESCO eligibility.

This guidance was originally prepared by Department of Public Service Staff (Staff) in conformance with Ordering Clause number 11 of the Commission’s Order Adopting Changes to the Retail Access Energy Market and Establishing Further Process, issued on December 12, 2019 in the retail market reset proceeding, and the updated guidance to reflect the directives and revised timelines of the Commission’s Order on Rehearing, Reconsideration, and Providing Clarification issued on September 18, 2020 in such proceeding.

"This document provides guidance to ESCOs regarding Staff’s review of ESCO eligibility applications. Nothing in this 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, the September 18, 2020 Order on Rehearing, Reconsideration, and Providing Clarification, or the Uniform Business Practices (UBP). Rather this guidance document is being provided as a resource to ESCOs," Staff noted

The guidance document notes that ESCOs that wish to continue serving mass market customers were required to file an application in accordance with the September 2020 Order and the newly modified UBP (due on/about Nov. 17).

The guidance document states that Staff will use information provided by the ESCO and also from requests to other PSCs, concerning complaint enforcement actions against the ESCO, to either permit the ESCO to continue eligibility or recommend revocation of eligibility to the Commission.

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

b. 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.

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

d. 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 will periodically review ESCOs eligibility, in addition to annual and triennial compliance.

"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," the guidance document says

"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," the guidance document says

"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," the guidance document says

"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," the guidance document says

The guidance document can be found here

Case 98-M-1343 et al.

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