New York PSC Issues Show Cause Order To ESCO, Alleging Provision Of Non-Compliant Products To Mass Market Customers -- EnergyChoiceMatters.com

New York PSC Issues Show Cause Order To ESCO, Alleging Provision Of Non-Compliant Products To Mass Market Customers

August 18, 2023

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York PSC directed Atlantic Energy LLC to show cause why its eligibility to act as an Energy Services Company (ESCO) in New York State should not be revoked or, alternatively, why other consequences as set forth in the Commissions UBP should not be imposed, for the alleged provision of non-compliant products to mass market customers

Atlantic Energy LLC provided the following statement to EnergyChoiceMatters.com concerning the matter:

In response to a NY PSC request, Atlantic provided a significant amount of data in late 2022 and is committed to collaborating closely with the commission to thoroughly examine their findings. Emily Cipes, Atlantic’s General Counsel, stated:

"We are fully dedicated to working alongside the commission to delve into their findings and conclusions. The new executive team and I are resolute in our commitment to fostering a culture of utmost compliance and operational excellence. Following a voluntary decision to temporarily suspend marketing activities while navigating this matter, we’re eager to resume our engagement in the New York market."

The introduction of Atlantic’s new management team was announced on ECM on April 25, 2023. This seasoned team comes on board after more than a decade of Atlantic’s service to both residential and commercial customers within the state of New York. At the core of Atlantic’s energy services is the distribution of energy-efficient products and other smart home devices specifically designed to enhance energy management and consumption. Atlantic has delivered over 70,000 such products to its loyal New York customers, in the past three years alone.
Atlantic remains committed to the continued pursuit of innovative approaches that provide ongoing value to its customer base.

In the show cause order, the PSC alleged that, during an investigation by Department of Public Service Staff initiated in September 2022, Staff found that Atlantic Energy allegedly enrolled over 250 customers on apparently non-compliant products that offered inappropriate inducements, and allegedly apparently failed to obtain customer consent following a material change to 25 sales agreements (specifically, beginning to serve prior standard supply mix customers with a 50% renewable product after the mass market limits began allegedly without obtaining customer consent for the product change)

The PSC alleged, "Staff discovered that 250 executed customer contracts included promotional items and inducements such as a Wi-fi Smart Camera, a Blue Tooth Speaker bulb, Wi-fi Smart Plugs, and cash rebates."

The PSC noted that in 2019, it held that, "Value-added products and services that have no energy-related benefit and/or that are offered as a one-time promotion ... typically do not provide any energy-related benefit to customers, [and] ESCOs are prohibited from offering them to prospective customers as inducements to sign a contract."

The PSC also alleged, "The Department’s investigation also uncovered credible information that Atlantic Energy apparently did not obtain customer consent to move legacy customers to renewable products following the December 2019 Order."

The PSC alleged, "In a letter to Staff dated January 26, 2023, Atlantic Energy explained that it made voluntary compliance payments (VCPs) to meet requirements of the compliant 50% renewable product, without additional obligation or cost to legacy customers. Staff then reviewed Atlantic Energy legacy contracts, discovering that these contracts were apparently for standard electric supply, not renewable products. According to Staff records, Atlantic Energy is not currently eligible to offer standard electric supply, but rather only approved to offer renewable electric products following the December 2019 Order. Staff has identified 25 legacy customer contracts that have expired prior to or after the effective date of the December 2019 Order, wherein Atlantic Energy apparently moved customer accounts to renewable energy products without the customers’ affirmative consent"

The PSC alleged, "For example, a New York City-based customer account, ending in -00009, who was enrolled on a fixed term electric contract that expired on April 19, 2018, remains listed as an active account and currently receiving renewable energy products."

The PSC said, "It is Staff’s contention that when an ESCO supplements renewable energy on behalf of the customers who have not elected to support the voluntary renewable energy market, such conduct and action by the ESCO constitutes a 'material change' that requires affirmative customer consent pursuant to UBP §5.B.5.d."

The PSC also alleged that, in response to a Staff Notice of Apparent Violation (NOAV), "Atlantic Energy apparently has not submitted documentation that demonstrates it took corrective action to supply refunds to customers or return customers back to their respective utilities."

Among other things, Staff has alleged that Atlantic Energy did not provide copies of all contracts in response to the NOAV and alleged that Atlantic Energy did not provide proof that customers were refunded or returned to the utility

Case 23-M-0166

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