New York Revokes Eligibility Of Several ESCOs

February 16, 2023

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The New York PSC revoked the eligibility of several ESCOs

Premier Empire Energy, LLC

The PSC revoked the eligibility of Premier Empire Energy, LLC (22-M-0489) for what the PSC termed, "a documented pattern of delinquent payments to NYSERDA," under the ZEC and REC programs

After first noting prior overdue payments on multiple occasions, the PSC said, "Premier owes NYSERDA $10,034.53 for ZECs for the period March 2022 to September 2022 and $9.73 for Tier 2 RECs for the period March 2022 to September 2022."

"The Department confirmed that Premier failed to make timely payments and keep current with its ZEC and Tier 2 REC invoices after December 2021, in violation of the NYSERDA payment plan," the PSC said

The PSC said, "NYSERDA has indicated that it is no longer willing to accept payment plans from Premier due to Premier’s lengthy history of poor compliance."

The PSC said Premier Empire Energy did not respond to a show cause order concerning the matter.

As of the date of the Feb. 17 revocation order, the PSC said that Premier Empire Energy, LLC does not have any customers in New York

Light Power & Gas, LLC

The PSC revoked the eligibility of Light Power & Gas, LLC (22-M-0514) as the PSC said, "LP&G consistently failed to submit multiple compliance items by the required dates," such an annual, pricing, and similar reports

Light Power & Gas, LLC did not respond to a show cause order concerning the matter, the PSC said

A November 2022 show cause order had noted that Light Power & Gas, LLC was not serving any customers

Separately, the Pennsylvania PUC on Feb. 17 issued an order canceling the EGS certificate of Light Power & Gas LLC for failure to file proof of financial security.

Sirrius Energy LLC

The PSC denied rehearing of its prior order revoking the eligibility of Sirrius Energy LLC (22-M-0187)

See details on the matters leading to the revocation here

Sirrius Energy LLC had sought rehearing of the revocation order because, as previously reported, it withdrew from the market and dropped its customers to default service in the summer of 2022, after receipt of a show cause order but before the revocation order

Sirrius Energy argued that, "On October 12, 2022 [two days prior to the revocation order], Sirrius notified the Commission that it was withdrawing its eligibility to serve as an ESCO, thus invalidating its status as an ESCO under Section 2.B.7 of the UBP. UBP Section 2.B.7 states, '[a]n ESCO’s eligibility to serve customers is valid unless: the ESCO abandons its eligibility status; or such status is revoked by the Commission through a final order pursuant to UBP Section 2.D.6.' This language is very specific – either an entity may abandon its ESCO status OR the Commission may revoke an entity’s ESCO status; but an entity’s status may not be both abandoned and revoked. Once Sirrius’ ESCO status had been invalidated, it was no longer an ESCO, and thus its status as an ESCO could not be revoked."

As such, Sirrius Energy LLC argued that, "the Commission did not have jurisdiction to revoke Sirrius’ eligibility to act as an ESCO ('ESCO Eligibility') since Sirrius was not an ESCO at the time the Order was issued."

However, the PSC in denying rehearing said, "Although Sirrius argues that it has abandoned its ESCO eligibility and cannot, therefore, have its eligibility revoked, Sirrius remains a registered active foreign limited liability corporation (LLC) in New York and stated only that it did not wish to market to customers in New York 'at this time,' which leaves the door open to marketing to customers in New York in the future."

The PSC said, "It is undisputed that Sirrius acted as an ESCO in New York and, as mentioned above, is still registered with New York’s Secretary of State as an active foreign LLC. As an eligible ESCO in New York, Sirrius agreed to abide by the terms of the UBP when it applied for eligibility. The Commission has the authority to enforce the terms of the UBP by appropriate action. There is also no dispute that Sirrius acted in its capacity as an ESCO when it violated the UBP. Moreover, Sirrius did not dispute the alleged violations presented to it as of June 21, 2022, via the Order to Show Cause. Thus, the Commission finds that it had jurisdiction and has jurisdiction to adjudicate this enforcement proceeding, notwithstanding Sirrius’s voluntary withdrawal from the ESCO market in the period between the issuance of the OTSC [order to show cause] and the issuance of the Revocation Order."

"To hold otherwise would enable ESCOs to avoid any consequences for their actions if they abandoned their eligibility prior to a Commission order imposing consequences upon the ESCO. Such a result would severely complicate the Commission’s efforts and ability to regulate the ESCO market, and would also impede the Commission’s ability to verify participants’ records of compliance and protect customers in the future," the PSC said

The PSC further said that the revocation proceeding is not moot, "because it will inform and affect the ability of Sirrius to reapply for eligibility in New York energy markets."

The PSC said, "The Commission is compelled to reject Sirrius’s argument that an ESCO facing revocation of its eligibility to operate in New York may escape that consequence by purporting to leave the market. The Commission made uncontested findings of fact that Sirrius engaged in widespread violations of the UBP. A review of a company’s prior record of compliance is a factor in an eligibility determination. To permit Sirrius to escape consequences for its actions would permit other ESCOs to temporarily step away from New York’s market prior to possible revocation without any subsequent consideration, accounting, or consequence for such conduct should a company later seek to restore its eligibility to market energy products to New York customers. Moreover, while the Commission has repeatedly explained that it deems ESCOs eligible to operate in New York, not licensed to operate in New York, the Commission looks to similar situations that have arisen where licensees surrender a license prior to revocation of that license by the issuing authority. In many such cases, courts have held that the surrender of a license after the beginning of enforcement proceedings but before the conclusion of those proceedings did not render revocation inappropriate. Here, the record reflects that Sirrius did not contest -- and thus conceded -- the violations specified in the June 2022 Order to Show Cause and it does not provide any evidence to dispute the Commission’s fact finding here. Given the seriousness of the uncontested violations, an ESCO should not be able to oust the Department and Commission of jurisdiction through such a maneuver."

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