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New York PSC Reverses Finding On ESCO Application Language

Addresses Meaning Of Material Pattern Of Complaints

June 22, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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On rehearing, the New York PSC confirmed its denial of the Retail Access Application Form (RAAF) required from Josco Energy Corp. which was required from all existing ESCOs to continue operating in New York after the PSC's retail market reset order, but the PSC did reconsider a prior finding with respect to the language of one section of the RAAF, and also made other notable findings.

The PSC's order on rehearing was addressing Josco's application to continue serving as an ESCO under the PSC's reset order. As previously reported, the PSC recently confirmed an order revoking Josco's existing ESCO eligibility and directing the return of its customers to default service (see story here)

One of the PSC's findings in its initial November 2021 order denying Josco's new RAAF was the PSC's finding that Josco violated the Uniform Business Practices by providing what the PSC in November 2021 termed, "misinformation", on the RAAF, by failing to list affiliates under two sections.

Josco argued that the November 2021 order erred in stating that Josco failed to list its affiliates in RAAF Sections 1.D and 1.E, and that Josco was not required to list such affiliates

RAAF Section 1.D requires an applicant to "[l]ist all states that your company has operated in within the last 24 months." RAAF Section 1.E requires an applicant to "[l]ist all trade names used in other states."

Josco said that these sections thus required only information related to the applicant, and not any affiliates

On reconsideration, the PSC agreed that, "The current language of these sections is specific to the ESCO applicant and, consequently, the November 2021 Order erred when it stated that Josco should have listed its affiliates in these sections."

However, the PSC still confirmed its decision denying Josco's application for the other reasons stated in the original order, including Josco's complaint history and a then-pending UBP violation proceeding before the New York PSC (which, as noted above, later resulted in revocation of Josco's existing ESCO eligibility)

Notable is the PSC's discussion on rehearing concerning what constitutes a "material pattern of consumer complaints" which is to be considered in RAAF applications and which, under the UBP, may subject an ESCO to penalties including revocation of eligibility.

The November 2021 order cited what the PSC called "significant numbers" of complaints regarding Josco’s marketing and customer enrollment activities in New York as a reason for denial.

"In particular, Staff has documented 48 complaints received from November 2, 2017, to February 21, 2018, 93 complaints received from January 1, 2019, to August 15, 2019, 33 complaints received from September 2019 to December 2019, and 29 complaints from January 1, 2020, to December 31, 2020," the PSC said

"This alone would be sufficient to constitute a 'material pattern of complaints,'" the PSC said

Josco argued that these complaints cannot be considered because, among other reasons, there had been no finding that such consumer complaints were violations of the UBP (and the separate enforcement proceeding against Josco was still pending as of the Nov. 2021 order)

Notably, on rehearing, the PSC held that, "a 'material pattern of consumer complaints' need not be composed of established violations of the UBP."

"The UBP purposefully uses the word 'complaint' as opposed to the word 'violation' or the phrase 'failure to comply' that are used elsewhere in the UBP. In the Commission Order that established the 'material pattern of consumer complaints' language, the Commission stated that a finding could be made 'even where those complaints do not reveal any violations of the UBP.' As mentioned above, the Commission defined 'a material pattern of consumer complaints' as 'a continuing volume of the same category of complaints, such as slamming or deceptive marketing,'" the PSC said

"As detailed in the related enforcement order against Josco, Staff received more than 230 consumer complaints against Josco in the 38 months from November 2018 through December 2020, of which 82 were slamming or misrepresentation complaints. In the Commission’s 'broad discretion,' this volume and pattern of consumer complaints requires action. The continued pattern of complaints alleging slamming and misrepresentation over multiple years, coupled with the 'predatory' nature of some complaints, leads the Commission to conclude that the appropriate penalty -- denial of eligibility to operate in New York -- was properly imposed and Josco has identified no errors of fact or law to lead the Commission to reconsider that conclusion," the PSC said

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