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New York PSC Reinstates ESCO's Ability To Enroll Residential Customers Subject To "One Strike" Probation, Limits On Marketing Channels

April 15, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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The New York PSC reinstated the ability of Astral Energy, LLC to market to and enroll residential customers, under a probationary period and with certain conditions, including limits on the types of marketing channels which may be used

As previously reported, the PSC had in 2015 suspended Astral Energy, LLC's ability to market to and enroll all customers, after a Notice of Apparent Failure (NOAF), "identified the following areas of non-compliance with UBP requirements and the Commission’s regulations: sales agreements used to enroll customers; third-party verifications of telephone sales; unauthorized enrollments, i.e., 'slamming'; false and misleading marketing; and failure to comply with 16 NYCRR Part 12 which, sets forth the Commission’s consumer complaint process."

See our prior story here for more details on original NOAF

As previously reported, the PSC later reinstated Astral's ability to market to and enroll non-residential customers, after Astral revised its processes and procedures to ensure that its practices comply with the requirements of the UBP

Astral later sought reinstatement for residential customers. In addition to its previously adopted corrective actions with respect to non-residential customers, a renewed request from Astral for residential reinstatement included a revised online marketing plan which Astral intends to use for residential customers. Through this process, Astral proposes that it will advertise its products on social media and browsers where interested customers could choose to click on a link that directs them to Astral’s website for an online enrollment. Once a customer enrolls in a product, Astral commits to follow all UBP requirements for customer enrollment. Astral will also provide sample mass-market (residential and small commercial) contracts and mass marketing materials for each proposed product for Staff review and approval prior to marketing and customer enrollment

The Commission noted that the rate of customer complaints against Astral has gone down during the residential marketing suspension, "although this is to be expected," the PSC added

The PSC reinstated Astral’s ability to market to and enroll residential customers under a two-year probationary period

The PSC said that, "Astral’s recent actions and submissions provide reason to believe Astral can meet the requirements necessary to participate in New York’s residential retail access market, and the Commission will grant Astral eligibility to serve residential customers under a two-year probation. Astral’s prior actions however merit continued vigilance moving forward. As Astral re-enters the residential marketplace, Staff shall actively monitor Astral’s operations for a period of two years to ascertain the extent to which Astral has implemented improvements and maintains those practices to support continued compliance with the UBP."

Notably, the PSC provided that, "During the two-year probation period, a 'one-strike' policy pertaining to any UBP violations will be followed."

Specifically, "If Staff becomes aware of any potential UBP violations, the Department will issue a Notice of Apparent Violation to Astral. Astral will be afforded an opportunity to respond and provide proof that a violation did not occur. If Staff finds that a UBP violation did occur, Staff will recommend to the Commission revocation of Astral’s eligibility to serve residential customers. This 'one-strike' policy will provide a basis to assess whether Astral should continue to serve any customers in New York State beyond the two-year probation," the PSC said

The PSC further conditioned Astral's residential reinstatement on its proposed use of online marketing and enrollments as its sole sale channel for residential customers

"Important to the Commission’s decision to reinstate Astral’s eligibility to serve residential customers is its commitment to utilize online enrollment as the sole enrollment channel for such customers. In its October 15, 2021 reinstatement request, Astral indicates that it will not market to residential customers through outbound telemarketing or door-to--door channels, and instead will only enroll residential customers online. The Commission see’s [sic] it fit to make this commitment -- which makes the enrollment process customer driven, as opposed to ESCO driven as is the case for door-to-door marketing/enrollments -- a condition to reinstatement of Astral’s eligibility to serve residential customers. Given that a majority of enrollment related complaints arise from door-to-door or telephonic marketing, the Commission sees limiting Astral’s ability to utilize those marketing/enrollment channels as an important consumer protection to impose as Astral reenters the residential market," the PSC said

"Should Astral wish to utilize additional enrollment methods in the future, it will have to petition the Commission to do so following the conclusion of the two-year probationary period," the PSC said

"The Commission also recognizes Astral’s affirmations that it will: utilize its in-house team, not outside brokers, to market to residential customers; only offer products that are specifically authorized in its Letter of Eligibility; and strictly adhere to the marketing practices authorized under the UBP," the PSC said

In order for DPS Staff to have enhanced monitoring capabilities, the PSC directed additional reporting shall be required from Astral, including reports on enrollments and internal complaints

Case 15-E-0556

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