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New York PSC Denies ESCOs' Waiver Petitions To Continue Green Gas Products For Existing Customers

Enforcement Discretion Set To Expire

July 14, 2022

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Copyright 2010-21
Reporting by Paul Ring •

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As summarized by New York PSC Commissioner Diane Burman, the New York PSC today adopted an order denying various petitions from ESCOs to extend the waiver period for certain ESCOs to continue to serve previously enrolled customers with an existing green natural gas product, without being subject to the price limits otherwise applicable to mass market service, while the issue remains pending before the Commission on a generic basis

A written order was not immediately available, but Burman discussed certain terms of a draft order on the PSC's consent agenda, which was ultimately adopted as final by the PSC, with Burman dissenting

As previously reported, when the PSC in January 2021 adopted various price and product limits for mass market service, the PSC allowed, for a period of one-year, those ESCOs which had already been offering a green gas product to continue to serve customers already enrolled on such green gas products, without being subject to the new pricing limits

The PSC in the January 2021 order said that the issue of whether green gas products would generically be deemed a value-added product or service, not subject to the price limits (similar to PSC-defined green electricity products) would be addressed in the Track II collaborative of the retail market reset proceeding. To date, the issue has not been addressed by the Commission. As previously reported, a group of ESCOs recently formally petitioned the PSC to approve a group of green gas products on a market-wide basis, with the ESCOs' proposal informed by the collaborative. The petition is pending before the PSC.

The green gas waiver period expired in January 2022. In advance of the waiver period expiring, several ESCOs sought an extension of the period from the PSC's Secretary, which is a common procedure. The Secretary did not grant an extension, and instead "directed" the petition to the Commission. After such Secretarial ruling, several ESCOs also filed additional formal petitions to the PSC for an extension of the waiver period, which, per Burman, are being addressed (and denied) in the order adopted by the PSC today

As previously reported, although the green gas waiver period expired in January 2022, the General Counsel of the New York Department of Public Service informed the applicable seven ESCOs of the exercise of enforcement discretion by the DPS concerning the offering of the legacy green gas products, under which the DPS would not pursue enforcement action against the ESCOs

The latest enforcement discretion by the DPS General Counsel expires July 24, 2022

Burman said that the order adopted today requires ESCOs to comply with the otherwise applicable price and product restrictions for the mass market, for ESCOs' legacy green gas customers, within 120 days. To the extent ESCOs do not wish to continue service to customers under such conditions, the customers will return to default utility supply service

Noting the history of the proceeding, Burman said that denial of the waiver extensions, "deeply troubles me."

Burman noted that the waiver was limited to ESCOs which offered a green gas product prior to the January 2021 reset price limit order being adopted (thus ESCOs could not create a new green gas product just to avoid the price limits), and was limited to existing customers on such products (preventing ESCOs from signing new customers to green gas products)

No party has formally opposed an extension of the green gas waiver, Burman stated

"No one is opposed on record," Burman said, adding that she hasn't heard any green gas customers saying that they are upset with their existing product

Burman said that the draft order that was before the PSC premises denial of the waiver on high natural gas prices and the impact on customers

"This does not make any sense. It's illogical, it's based on no rational basis in the record; you can't just cite to gas prices as high as now another reason to deny the waiver when we never really looked at that in the initial [January 2021 order]," Burman said

Burman said that the denial of the waiver will create customer confusion, especially if the PSC acts soon on the petition to allow green gas products generically, as customers may receive required notice of their drop to default service due to the waiver expiration, but while such noticed drop is pending, the PSC may vote to generically allow green gas products.

Burman also noted that the order would create disruption to gas utilities' planning and procurement of supplies, given that LDCs may expect and prepare for a spike in default service load, and supply needs, from the return of customers to utility supply, only for those customers to soon leave again if the PSC authorizes green gas products in the near future

Cases 12-M-0476, 15-M-0127, 98-M-1343

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