New York Gov. Signs Bill Banning ESCO Rate Changes Without Express Customer Consent (Not Limited To Small Customers)

Bans Early Termination Fees For Auto-Renewals With Price Changes, Absent Express Customer Consent

Also Requires Comparison To Utility Price In ESCO Renewal Notices, Information On How To Get Prior Shadow Billed Amounts

September 20, 2023

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

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New Governor Kathy Hochul has signed bill A.703-A/S.683-A which prohibits ESCOs from changing the rate charged to a customer (with customer having the meaning as defined by law) without the affirmative consent of the customer

A.703-A/S.683-A makes amendments to section 349-d of the general business law, which defines "customer" to mean, "any person who is sold or offered an energy services contract by an ESCO (i) for residential utility service, or (ii) through door-to-door sales."

Section 349-d of the general business law defines "door-to-door sales" to mean, "the sale of energy services in which the ESCO or the ESCO's representative personally solicits the sale, and the buyer's agreement or offer to purchase is made at a place other than the place of business of the seller; provided that such term shall not include any sale which is conducted and consummated entirely by mail, telephone or other electronic means, or during a scheduled appointment at the premises of a buyer of nonresidential utility service, or through solicitations of commercial accounts at trade or business shows, conventions or expositions."

As such, due to the applicability to door-to-door sales as defined above, regardless of customer type, the requirements of the signed bill discussed below go beyond any PSC mass market product limits or other requirements

Specifically, the signed A.703-A/S.683-A provides, "No material change shall be made in the terms or duration of any contract for the provision of energy services by an ESCO without the express consent of the customer. A change in price or a change to or from fixed or variable pricing shall be deemed to be material."

"This shall not restrict an ESCO from renewing a contract by clearly informing the customer in writing, not less than thirty days nor more than sixty days prior to the renewal date, of the renewal terms and of his or her option not to accept the renewal offer; provided, however, that no fee pursuant to subdivision five of this section [relating to early termination fees] shall be charged to a customer whose express consent has not been obtained to any change in material terms and conditions, or who objects to such renewal not later than three business days after receiving the first billing statement from the ESCO under the terms of the contract as renewed. The public service commission and the Long Island power authority may adopt additional guidelines, practices, rules or regulations governing the renewal process," the new law provides

The new law also provides for new disclosures and comparisons to utility prices in ESCO renewal notices.

The signed bill states, "In any notice regarding contract renewability, the provider shall disclose the following information as it exists at the time of such notice: (i) the price charged for energy services; (ii) the price it proposes to charge upon renewal; (iii) the price that is charged by the customer's distribution utility; and (iv) information notifying the customer how they may compare past bills with what they would have been charged had they received energy services from their respective distribution utility, including, the internet address of any bill calculator offered by such customer's distribution utility's website."

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