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New York ESCO Seeking To Drop 25,000 Muni Aggregation Customers To Default Service

CCA Administrator Alleges ESCO's Action Put The Credibility Of New York's Opt-Out Aggregation Program At Risk

ESCO Allegedly Seeking Action Due To Billing Problems At Utility

April 27, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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In a New York PSC filing, Joule Assets, Inc. alleged that Columbia Utilities, LLC has filed a notice at the New York PSC to transfer approximately 25,000 municipal aggregation (CCA) customers to default service

Columbia Utilities provided the following statement concerning the matter

“We are in the process of carefully reviewing the filing that was made this morning. We will continue to work cooperatively with New York Department of Public Service Staff on this and all matters impacting our New York customers.”

--- Statement from Columbia Utilities

Joule Assets said that, in early 2021, ten municipalities in the Hudson Valley entered into Community Choice Aggregation Electricity Supply Agreements with Columbia Utilities, LLC with Joule acting as Community Choice Aggregation Administrator.

Joule alleged, "Columbia agreed, among other things, to provide firm full-requirements electricity power supply for Community Choice Aggregation customers in each of the municipalities commencing with the first consumer meter-read date after July 1, 2021 (except for the Town of Saugerties which commenced with the first consumer meter-read date after September 1, 2021), and continuing until at least the first consumer meter read date after June 30, 2024."

"These Supply Agreements are currently serving ~25,000 customers over a three-year period at a fixed price. Notwithstanding Columbia’s binding agreements to serve consumers at a price, Columbia now seeks to breach its agreement and transfer these customers to the utility without contractual or other legal basis," Joule alleged

Joule alleged, "On April 19, 2022, Columbia Utilities, LLC ('Columbia'), filed a heavily redacted notice with the Public Service Commission, which, upon information and belief, notifies the Commission of its intention to transfer 5,000 or more customers to full utility service with Central Hudson. Upon information and belief, we understand that the customers that Columbia intends to transfer are Community Choice Aggregation ('CCA') customers under contracts with a number of municipalities."

Joule alleged, "On February 8, 2022, Columbia sent a letter to Joule alleging that technical deficiencies with Central Hudson Gas & Electric’s ('Central Hudson') billing and enrollment systems were negatively impacting the CCA customers and Columbia’s efforts to provide service under the Agreements. In the letter, Columbia sought a meeting to discuss the ongoing difficulties, and raised the possibility of a temporary suspension of service while the difficulties were being addressed. On March 4, 2022, in letters to Joule and the individual Municipalities, Columbia sought to invoke the force majeure provision of the Supply Agreements because of the technical difficulties alleged in their February 8, 2022 letter. While Columbia alleged it had the right to suspend contract performance under the force majeure provisions, it did not do so in the March 4, 2022, letter ..."

Central Hudson's billing errors were previously reported by See background on Central Hudson's billing errors impacting ESCOs in our prior story here

Joule alleged, "As of the date of this submission [April 26], Columbia has taken no such action in regard to written notices to either Joule or any of the Municipalities. Joule and the Municipalities rejected classification of the difficulties with the utility as a force majeure event under the Supply Agreements. It was further noted that even in the legitimate case of a force majeure event, this would not be a basis for terminating the Supply Agreements, but rather, at most, to suspend performance for no greater duration than is required to resolve the causes of the force majeure event. Upon information and belief, based on discussions with Central Hudson, the billing difficulties have been resolved."

Joule alleged, "Upon information and belief, the Notice submitted by Columbia seeks permission to transfer the customers covered by the Supply Agreements to Central Hudson."

"This request should be denied," Joule said

Joule alleged, "Columbia has no right to discontinue service to any customer of the CCA, effectively terminating the Supply Agreements, as there are no grounds under the Supply Agreements for Columbia to transfer customers back to the utility during the term of the Agreements. The Supply Agreements lay out the terms under which they may be terminated and none is present here. Further, as noted by both Columbia in its February 8, 2022, letter and the Joule/Municipalities responses, the proper remedy, even if this was a force majeure event, was a temporary suspension not a termination of the Supply Agreements."

Joule alleged, "The UBP makes an ESCO’s right to discontinue service 'subject to any limitations contained in its sales agreement,' and here Columbia is obligated to deliver supply electricity supply service to CCA customer until the first meter read after June 30, 2024. As Columbia has not proffered any legal basis to terminate the Supply Agreement and transfer customers, the request to transfer customers should be denied. In the alternative, the Commission should grant a hearing to consider the request of Columbia."

"Columbia’s actions to date, and actions it may take in the near term, deprive CCA customers of the very substantial benefit of the program and put the credibility of the State’s CCA program at risk," Joule alleged

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