New York Retail Choice Coalition Seeks Extension Of Deadline For Pricing Limitations Under NY PSC Reset Order, Notes Potential For "Unfair Advantage" To Certain ESCOs Due To Speed Of Individual Eligibility Reviews

February 3, 2021

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York Retail Choice Coalition (the 'Coalition' or 'NYRCC'), requested from the New York PSC a seventy-five (75) day extension of the implementation date of the PSC's retail market reset order, including the previously reported pricing limitations under such order

Among other things, the New York Retail Choice Coalition cited the potential "unfair advantage" that certain ESCOs may receive due to their revised eligibility reviews being completed first (while reviews of other ESCOs are not completed by the pricing limit deadline), even where such disparate ESCOs submitted substantially similar information for their revised eligibility. The NYRCC also cited the PSC's recent order allowing a limited, temporary waiver for existing green gas products (see story here) as necessitating updated filings by ESCOs, which will require more time for DPS Staff to review

"A rushed implementation process will only create customer confusion and lead to more administrative burdens on Department of Public Service Staff ('DPS Staff'), local distribution utilities ('LDUs'), energy service companies ('ESCOs') and residential and small commercial customers in the midst of the COVID-19 Pandemic (the 'Pandemic') which continues to adversely affect all stakeholders," NYRCC said

"Granting this request will serve the public interest for several reasons. First, additional time is necessary to ensure the various products and services that ESCOs are permitted to provide to residential and small commercial customers are available to current ESCO customers at the time of customer renewal. Second, it will allow DPS Staff the additional time needed to complete its review of the application materials from ESCOs that have not yet received an Eligibility Letter. Third, without additional time, ESCOs that have already received Eligibility Letters will have a significant market advantage over those ESCOs that are still awaiting approval from DPS Staff on customer agreements and the issuance of Eligibility Letters. Fourth, it will assist LDUs by ensuring an efficient and orderly process for transitioning selected residential and small commercial customers back to full LDU service. Fifth, it ensures the Commission’s ability to comply with its obligations pursuant to Pandemic related Executive Orders and laws," NYRCC said

"The extension request is needed so that current ESCO customers receive the benefit of all value-add products and services approved by the Commission with minimal disruption, as contemplated by the Order Addressing ESCO Petitions Requesting Authorization to Provide Additional Products and Services, issued by the Commission on January 25, 2021 ('January 25 Order'). The January 25 Order authorizes ESCOs to offer two (2) additional products to mass market customers: (i) a commodity product bundled with a home warranty product not subject to a price restriction and (ii) a commodity natural gas product bundled with either carbon offsets or RECs ('Green Gas Product') not subject to a price restriction. In order to offer either product, ESCOs are required to first obtain approval by DPS Staff. Specifically, to offer the home warranty product, ESCOs are required to file the proposed standard sales agreement(s) for review and approval by DPS Staff. In order to qualify to offer the Green Gas Products, within thirty (30) days of the January 25 Order, ESCOs that currently offer Green Gas Products may continue to offer those products to customers who currently purchase them during the waiver period by submitting proof of at least one (1) valid mass market sales agreement reflecting the waiver-qualified bundle that the ESCO wishes to continue to market. The Coalition respectfully submits that an extension of time is necessary to provide both ESCOs sufficient time to prepare documentation required by the January 25 Order, and DPS Staff adequate time to evaluate the documentation submitted by ESCOs seeking to offer either product and then, issue revised Letters of Eligibility," NYRCC said

"ESCOs serving residential and small commercial customers filed their Enhanced Retail Access Applications ('Enhanced RAAF') by November 17, 2020, in compliance with Ordering Paragraph 3 of the Order on Rehearing. DPS Staff has been working diligently to review the application materials submitted on or before the November 17, 2020 deadline set-forth in the Order on Rehearing. ESCOs prepared their applications based on the guidance document provided by DPS Staff, Commission’s encouragement for ESCOs to rely on this guidance as reiterated in the Order on Rehearing, and in reliance on the Commission’s assurances that DPS Staff would have sufficient time to review and approve the applications prior to the Reset Order Implementation Deadline. Enhanced RAAF Applications, and Commission’s encouragement for ESCOs to rely on this guidance is reiterated in the Order on Rehearing. Most significantly, due to the complexity of the Reset Order and Order on Rehearing, the documentation ultimately requested from DPS Staff in order for an ESCO to demonstrate its ability to offer GSP was not originally clear in the guidance documentation provided by DPS Staff on completing the Enhanced Retail Access Application, and was only clarified following DPS Staff review of the submissions made by ESCOs intending to offer guaranteed savings products," NYRCC said

"With only twelve (12) days left before the February 15, 2021 Implementation Date takes effect, Letters of Eligibility have been issued to only a percentage of ESCOs that serve residential and small commercial customers. Indeed, the vast majority of ESCOs serving residential and small commercial customers, many of whom have attempted in good faith to timely respond to DPS Staff comments while hampered by the Pandemic, have yet to receive their Letter of Eligibility, granting a significant business advantage to ESCOs that have already received their Letters of Eligibility while simultaneously depriving certain customers of the benefits of the new product offerings authorized by the Reset Order and the January 25 Order," NYRCC said

"There is little doubt that DPS Staff is dedicated to ensuring that all ESCOs are treated equally, but the simple fact is the November 17, 2020 deadline for ESCOs to submit the Enhanced RAAF Applications did not leave DPS Staff adequate time to uniformly evaluate the application materials submitted by each ESCO, request information beyond what was originally described in the guidance documents prepared by DPS Staff, and resolve discrepancies between the information requested by DPS Staff and that provided by ESCOs. The sheer volume of material requiring DPS Staff’s review rendered it impossible for DPS Staff to provide feedback to all ESCOs within a similar timeframe while simultaneously performing all other regulatory functions with which the DPS Staff is tasked, including additional requirements imposed during the Pandemic. Whereas some ESCOs received detailed feedback from DPS Staff in late November, other ESCOs did not receive feedback until mid to late January. Furthermore, the level of detail and scope of feedback was not consistent. For example, while many ESCOs offering a guaranteed savings product were provided with a list of documents to provide to support a GSP, others were only provided with a request for additional information, and in other instances, ESCOs were not requested to provide any documentation on GSP. The Coalition understands this is a massive undertaking by DPS Staff and we appreciate the time and effort DPS Staff is putting forth to make the new regulatory changes work. Still, it is contrary to Commission practice and DPS Staff principles to create an unfair advantage for one group of companies over another," NYRCC said

Concerning the above-cited Staff guidance documents issued to ESCOs, NYRCC said, "While the Guidance Documents detail Staff’s review process and offer guidance on how ESCOs should respond to certain questions, neither document offers information on the documentation Staff will ultimately require from ESCOs offering a GSP. The Coalition does not fault Staff for omitting this information, but rather draws attention to this discrepancy as an example of the challenges all stakeholders, DPS Staff and ESCOs alike, face when new regulatory regimes are adopted."

"Another concern is that the Commission’s ability to oversee the LDU’s and other essential businesses in the power supply chain during the Pandemic will be compromised unless additional time is afforded to roll out the changes under the Reset Order in an organized and fluid manner. Effective March 7, 2020, Governor Cuomo issued Executive Order 202, Declaring a Disaster in the State of New York (the 'Executive Order') pursuant to which he directed the implementation of the State Comprehensive Emergency Management Plan and all necessary State agencies, including the Commission, to take appropriate action in furtherance of 'containing, preparing for, responding to and recovering from [the] state disaster emergency, to protect state and local property, and to provide such other assistance as is necessary to protect public health, welfare, and safety.' Under the State Emergency Management Plan, the Commission is called upon to 'identify and support public and private utility providers that may have difficulty continuing to operate...' during the State of Emergency. Such utility providers include 'power generation, fuel supply, and transmission,' all characterized as 'essential businesses' required to remain open and supported by the Commission during the pendency of the State of Emergency which continues with no signs of being lifted in the foreseeable future," NYRCC said

"The Commission has abided by its obligations under the Executive Order by, among other things, extending the time for LDCs to make various filings and imposing and overseeing consumer protections. Yet, burdens on LDCs and other stakeholders have been exacerbated by the ongoing Pandemic as coronavirus cases continue to rise across the state simultaneously with LDUs’, many in the absence of key employees, necessary development of contingency plans in anticipation of a difficult winter season. Without an extension of the Reset Order Implementation Date, many ESCOs who have not yet received Eligibility Letters may have no choice but to return customers back to LDC service en masse, thus jeopardizing the already burdened LDCs’ ability to ensure compliance with Pandemic related consumer protections as well as the Commission’s ability to comply with its current enhanced oversight obligations. The result could very well render the Commission and the entities it is charged with overseeing out of compliance with current Executive Orders and laws, likely harming the consumers the Commission is tasked with protecting," NYRCC said

"For these reasons, the Coalition respectfully urges the Secretary to grant its request for a seventy-five (75) day extension of the Reset Order Implementation Date," NYRCC said

Case 15-M-0127 et al.

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