Citing Ongoing Uncertainty In Determining Whether A Customer Is Mass Market, RESA Seeks Extension Of New York Reset Order's Product Limits

January 29, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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Citing a lack of "sufficient clarity" with respect to certain changes to the Uniform Business Practices (UBPs), including the identification of customers which meet the mass market definition adopted by the New York PSC, the Retail Energy Supply Association requested a 60-day extension of time to comply with Ordering Clauses 3, 4, and 5 of the PSC's retail market reset rehearing order.

As previously reported, under the reset order, ESCOs are limited to offering mass market customers: (1) a guaranteed savings (versus the utility) plan, (2) a fixed rate product that is limited in price to a 12-month trailing average utility supply rate plus a 5% premium, or (3) for electricity only, a 50% (above the minimum RPS) renewable plan that meets deliverability and other requirements in the order. The September 2020 rehearing order provided that, effective February 15, 2021, all enrollments of new customers or renewals of existing customers must be made in conformance with the limitations set forth in the Rehearing Order. Ordering Clauses 3, 4, and 5 address the product limits and associated UBP changes.

RESA stated, "RESA members remain concerned that the Rehearing Order and the Reset II Order have not provided sufficient clarity on the requirements of the new UBPs."

Among other things, RESA cited a lack of clarity on how to identify whether a customer meets the previously reported definition of mass market customer (details here) adopted by the PSC, with RESA listing its concerns as follows:

1. Identifying a Mass-Market account

a. Will the utilities or DPS Staff issue updated guidance to the 2016 documents that list which rate classes were considered residential and non-residential, and which rate classes indicate the presence of a demand meter?

b. In the absence of updated guidance, how will ESCOs be able to identify residential or non-residential accounts, or demand or non-demand accounts?

c. Will the utilities or DPS Staff keep this information updated when rate classes are changed?

2. With respect to aggregating accounts against the 750 dekatherm threshold for small commercial customers or the electric demand meter threshold, the Rehearing Order provides that '[t]he Commission further clarifies that the 750-dekatherm, or its equivalent, ceiling for natural gas small non-residential customers is intended to be considered in the aggregate as to all non-residential accounts held by that customer. Accordingly, the dekatherm use of a customer holding multiple commercial gas accounts should be considered in aggregate. As to aggregation for electric customers, an electric customer is not a mass-market customer if it has one or more demand metered accounts.'

a. What is the definition of a 'customer'? The UBPs offer a definition for 'direct customers' and 'mass market customers,' but no definition for 'customer.'

b. The previous 2016 guidance allowed aggregation of all accounts sharing the same utility customer name – can ESCOs assume that accounts sharing the same customer name can still be aggregated? Is there another proposed mechanism that ESCOs can use to group accounts together?

c. How should an ESCO respond if a business owner wants to include his home account on the company contract? Does the ESCO have to separate the home account from the business account, or can they aggregate the account per the customer’s request?

3. New Customer and Pandemic Concerns

a. Will a new company or business with no historical usage be considered a mass-market account until full operations have started? Will ESCOs have to wait a year until the customer could be served as a non-mass market customer?

b. Can ESCOs consider customer usage that predates the COVID-19 pandemic and associated business shutdowns to rely on typical natural gas consumption to reach the 750 dekatherm threshold?

RESA also listed additional areas for which it sought clarity.

RESA asked, "For fixed rate products, if the price is capped based on the historic utility average price at the time of enrollment, what happens if the customer executes a contract based on the then-existing utility average price and the utility updates their average price before the customer’s enrollment is processed, resulting in a fixed price product that is higher than the 5% cap?"

RESA also asked, "How do Community Solar offerings fit into the Reset II Order?" and "How should ESCOs handle customer cancellations coupled with rebills?"

"These questions, and the responses to these questions, are intrinsic to ESCOs’ ability to comply with the new UBPs, the requirements of the Reset II Order and Rehearing Order, and to successful navigation of the new regulatory regime. This extension request, particularly in light of the fact that Track II of the proceedings will not commence until after the new UBPs are implemented, is not made lightly. RESA members want to fully understand what is required of them and want to comply with the spirit and letter of the new UBPs. The above questions are the result of RESA members seeking to ensure they can meet the requirements of the new UBPs and continue to serve customers in New York," RESA said

RESA also noted that, "ESCOs are prohibited from enrolling or renewing mass market customers after February 15, 2021 unless their eligibility filings are approved. The eligibility filings include the contracts that are permissible for sales and renewals under the Reset Order and thus cannot be implemented until Staff approval is received. Even if an ESCO receives approval of its eligibility filing to serve mass-market customers today, the ESCO will have insufficient time to implement newly approved contracts within the proscribed timeline for advance notice of contract expiration. Under the UBPs, expiration notices must be sent at least thirty to sixty days prior to the renewal date of a customer’s contract. With less than twenty days to the February 15, 2021 deadline, the clock has already run out for the ESCOs who are still waiting for eligibility approval. The requested extension will allow ESCOs to respond to Staff’s requests for revisions and supplemental information, provide Staff with sufficient time to review the remaining eligibility applications and materials, and ensure continuity of choice for New York consumers, all of which will streamline the implementation of the new regulatory regime."

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