Retail Suppliers: "Impossible" To Comply With New York Broker Order By Deadlines

July 28, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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The NRG Energy retail suppliers have filed a new request with the New York PSC in which the NRG retail companies now seek an "extension" of certain deadlines under the New York PSC's recent broker-consultant regulation order

See details on the PSC's order here

As previously reported, NRG, as well as several other ESCO parties in separate filings, have sought a stay of the PSC's broker order

NRG in its July 28 request more narrowly seeks an extension for the compliance obligations set forth in the following Ordering Clauses of the PSC's June 23 broker order, each of which currently has a compliance deadline of August 31, 2023:

• Ordering Clause 5, which directs Energy Brokers and Energy Consultants to comply with the applicable requirements of the Uniform Business Practices (“UBP”) and Uniform Business Practices for Distributed Energy Resource Suppliers (“UBP-DERS”);

• Ordering Clause 6, which requires Energy Brokers and Energy Consultants, including an ESCO’s third-party vendors, to file a completed registration package with the Commission; and

• Ordering Clause 8, which requires ESCOs and Distributed Energy Resource Suppliers to update their customer sales agreements to incorporate required Energy Broker and energy Consultant compensation disclosures, as well as a demonstration of compliance within the company’s annual compliance filing.

NRG requested that the deadlines in the Order should be extended to sixty (60) days past the Commission’s decision on the various pending petitions for rehearing.

NRG said that, "Energy Brokers, Energy Consultants (including an ESCO’s third-party vendors), and ESCOs have roughly one month as of the time of this writing to bring their systems into compliance. Plainly put, this is an impossible task. Even accounting for the full compliance window -- two months and nine days from the Order’s issuance date -- these entities lack the resources to not only bring their internal systems into compliance within this short time frame, but to also consult, direct, and ensure third party vendors modify their systems accordingly. Further, despite the Order’s assurances that guidance is forthcoming, NRG and other entities are left with little choice but to re-tool their systems and procedures in the dark as the technical conference was only just scheduled for August 8, 2023 -- a mere three weeks before the August 31, 2023 deadline. Indeed, the technical conference may raise more questions than answers, with little time for stakeholders to adjust their implementation plans accordingly."

"In addition to revisions to its template customer contracts, NRG must also perform the necessary IT development and testing to ensure its digital resources and programs work as intended after the requisite changes are made, to ensure that required disclosures populate the affected forms NRG uses across its various platforms. Further, NRG will need to develop and implement training for its customer-facing employees to ensure that are familiar with the new compliance obligations. NRG estimates that it will need at least another eight to twelve weeks to properly reconfigure its internal systems," NRG said

"Perhaps more importantly, NRG must also coordinate with its third-party vendors to ensure they undertake similar implementation measures. NRG cannot understate that this is a complex, multifaceted undertaking. It is likely that a number of these vendors, who perform incidental roles (such as a vendor that operates a call center) are unaware of these regulatory changes or are otherwise underprepared to register with the Commission and report their compensation appropriately. The ensuing confusion will inevitably create stumbling blocks as these entities navigate the registration process. Additionally, NRG’s coordination of these changes will have to be predicated by revisions to existing vendor contracts, which in and of itself can present a significant time-constraints. These changes may also raise confidentiality concerns, especially where NRG employs independent contractors, who under the terms of the Order, will have to register and disclose compensation on an individual basis," NRG said

"As outlined above, the short turnaround time imposed by the August 31, 2023 deadline unnecessarily imposes a compliance bottleneck. This short window will inadvertently incentivize sloppy, rushed compliance measures on the part of the covered entities, especially those that were not previously regulated by the Commission. This also creates an unreasonable burden on Department Staff, who have until December 31, 2023 to review the registration packages and will likely entertain an onslaught of questions and ill-prepared materials," NRG said

Case 23-M-0106

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