Final New York Anti-Harassment Rule Retains Broad Applicability; Prohibits "Harassment", Other "Detrimental" Conduct By Retail Suppliers In Connection With "Establishment Of Service"

"Causing A Telephone To Ring ... Repeatedly Or Continuously" Among Proposed Behaviors Defined As Harassment

October 18, 2023

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

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The New York PSC issued a written order containing new anti-harassment rules applicable to ESCOs and other entities, with the final rules retaining broad language, with the applicability extending to the, "establishment of gas and/or electric service" -- which was not included in the text of the originating statute.

The final rule provides that, "No utility corporation, municipality, or ESCO subject to the department's uniform business practices and sections three hundred forty-nine and three hundred forty-nine-d of the general business law shall engage in any conduct the natural consequence of which is to harass, oppress, or abuse any residential applicant or customer in connection with the establishment of gas and/or electric service, handling of a residential customer complaint, the offering and/or negotiating of a deferred payment agreement, or the collection of an unpaid balance or any other obligation owed by such customer."

The phrase "establishment of gas and/or electric service" is not defined in the rules. The PSC in its written order did touch (though not definitively) on potential complaints related to establishment of service, and applicability to ESCOs, as noted further below

The final rules define "detrimental conduct" to mean, "any conduct by a utility, municipality, or energy service company (ESCO), the natural consequence of which is to harass, oppress, or abuse a residential applicant or customer in connection with the establishment of gas and/or electric service, handling of a residential customer complaint, the offering or negotiating of a deferred payment agreement, the collection of an unpaid balance, or any other obligation owed by such customer."

Under the final rules, the phrase, "harass, oppress, or abuse" shall, "mean and include, but not be limited to, when the utility, municipality or ESCO knowingly fails or neglects to comply with the provisions of Article 2 of the Public Service Law."

Furthermore, the final rule states that the following conduct shall be deemed a violation of the relevant anti-harassment section (the most relevant to ESCOs are bolded):

(i) The use or threat of use of violence or other criminal means to harm physical persons, their reputation, or the property of any person.

(ii) The use of obscene or profane language or language, the natural consequence of which is to intimidate or otherwise insult or mistreat the listener or reader.

(iii) The publication of a list of customers who allegedly refuse to pay debts, except to a consumer reporting agency.

(iv) The advertisement for sale of any debt to coerce payment of the debt.

(v) Causing a telephone to ring or engaging any person in telephone conversation or other means of electronic communication repeatedly or continuously, the natural consequence of which is to annoy, abuse, or harass any person at the called number or point of electronic communication. [emphasis added]

(vi) The placement of telephone calls or other means of electronic communication without meaningful disclosure of the purpose of the call or electronic communication and/or the identity of the utility, municipality, or ESCO. [emphasis added]

(vii) The use of false, deceptive, or misleading representation in connection with the collection of a debt.

The final rules provides the following conduct shall not be deemed harassment, oppression, or abuse by a utility, municipality or ESCO:

(i) Communications by an employee or agent of a utility, municipality, or ESCO in the regular course of business when collecting or attempting to collect any debt owed or due to the utility, municipality, or ESCO.

(ii) Communication to a residential customer upon their express consent to receive autodialed and prerecorded or automated calls or other means of electronic communication related to utility service. The customer consent to contact includes communications related to utility service and is limited to communications that warn or inform the customer about planned or unplanned service outages, updates about service outages or restoration, confirmation of service restoration or information about lack of service, notification of meter work or other field work, notification of possible eligibility for subsidized or lower cost services, or that relate to servicing and billing the customer’s account.

(iii) Communications by an employee or agent of a utility, municipality, or ESCO when negotiating the terms and conditions of a deferred payment agreement consistent with Article 2 of the Public Service Law and section 11.10 of this Part.

(iv) Communications by an employee or agent of a utility, municipality, or ESCO when providing advice, information, or the position of that entity to a residential applicant or customer in relation to a complaint or the establishment of gas and/or electric service.

(v) Communications related to emergencies and/or mandated safety inspections.

As previously reported, ESCOs had said that a proposed rule which had proposed to apply the above-provisions to the, "establishment of gas and/or electric service," went beyond the statutory text, which did not list in the bill text "establishment of gas and/or electric service" as among the customer interactions to which the new statutory anti-harassment provisions would apply (the bill had specifically listed interactions such as debt collection and complaint handling)

However, the PSC said that statute supports its adopted broader applicability of the rule

In its order, the PSC said, "The Commission disagrees that the proposed regulation is overbroad and is adopting a final regulation here that is tailored to the underlying statute language. For example, PSL 53-a(2) provides that '[a]ll utilities or municipal utilities or ESCOs' are subject to 'all such other legal or equitable remedies as may be necessary or convenient for protection of consumers against the prohibited behaviors described in subdivision one of this section.' This language provides the Commission the administrative discretion to protect all consumers covered by HEFPA, and thus it is necessary and convenient to include all parts of HEFPA so all potential interactions by consumers with the Service Providers are covered."

In its order, the PSC said, "A practical example of the applicability of the regulation and its implementation and enforcement is as follows: a customer hypothetically alleges harassment against an ESCO, however that specific provision in the regulation does not apply to the ESCO, such as conduct between the parties at the point of service application or service termination. If the ESCO took no part in that establishment of service activity, the response to OCS should reflect those facts. Each consumer complaint is fact specific and based on the customer’s initial allegations. Each Service Provider has the right and duty to participate in the complaint process and would be able to rebut, with factual evidence, any allegation made by the complainant."

"The regulation here is tailored to covering all of the protections in HEFPA incorporated into PSL §30, which provides this inclusiveness of consumer treatment in the 'residential gas, electric, steam service policy' and states, 'this article shall apply to the provision of all or any part of the gas, electric or steam service...' The establishment of gas and/or electric utility service in PSL §31 is a core focus of HEPFA and should have the same protections here. Again, the Commission disagrees with the commenters that the proposed language of the regulation is overbroad. It is within the Commission’s existing mission and authority to protect the customers of all Service Providers," the PSC said

"The legislative intent of this statute can be gleaned from the bill jacket of PSL §53-a, specifically the memorandum from the bill’s Assembly sponsor Amy Paulin to the Governor’s counsel, which states: 'The Home Energy Fair Practices Act (HEFPA) provides residential energy customers with comprehensive protections in areas such as application for service,(emphasis added [by PSC]) customer billing and payment and complaint procedures, including the ability to enter a deferred payment agreement to avoid a shut off. The protections in the bill will ensure that customers are able to exercise their rights under HEFPA without being subjected to abusive language or deceptive practices. The Bill language takes inspiration from the Federal Dept Collection Practices Act, which proscribes abusive practices of debt collectors,'" the PSC said

"This memorandum in support makes clear that the application of service was intended to be covered by the legislation. The Commission believes this language should remain included as the Department has specialized knowledge and understanding of the underlying operational practices between Service Providers and their customers. Additionally, the application for service is a uniquely vulnerable period of a customer’s relationship with a Service Provider, since the failure to receive service might create immediate harms to an applicant seeking water, heat during the winter, or electricity, and would undermine public health and welfare," the PSC said

Further addressing potential behaviors which violate the rules, the PSC said, "The regulation at issue here was modelled after regulations adopted by the Federal Trade Commission pursuant to the Federal Fair Debt Collection Procedures Act. Given the amount of litigation challenging the application of those regulations, there are numerous illustrative examples of what is and what is not harassment."

"For example, the use of obscene or profane language or attempting to collect a debt using a false company name is considered the natural consequence of behavior resulting in harassment. By contrast, a debt collection attempt by the sending of two letters asking for payment would not be considered harassment and not resulting from the natural consequence of that conduct," the PSC said

Case 23-M-0229

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