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New York Utilities Say ESCOs Should Be Required To Send Separate Bill For Home Warranty Products If Line Item Pricing Required By PSC
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The joint New York utilities told the New York PSC that, to the extent the PSC requires the cost of an ESCO's home warranty service to be unbundled from an ESCO's commodity charge and billed as a line item specific to the home warranty service, then ESCOs should be required to issue a separate bill for the home warranty charge and should not bill such home warranty costs through utility consolidated billing
The comments from the joint utilities -- who include NiMo, ConEd/O&R, Central Hudson, National Fuel Gas Distribution, and NYSEG/RGE -- were made in response to a DPS Staff white paper on home warranty products (HWP).
As previously reported, Staff's whitepaper recommends, among other things:
• Subjecting HWP products to the existing ESCO price caps for mass market customers
• Banning the use of third-party HWP providers by ESCOs, with ESCO "employees" required to perform any HWP service
• Requiring an ESCO employee to visit a HWP customer's home within 5 days of enrollment, with the enrollment cancelled if such visit is not performed
• Mandating line item billing for HWP products
See our prior story for a full discussion of the Staff proposals
The joint utilities said that if line-item billing is required, then ESCOs should be required to separately bill any non-commodity costs associated with the HWP, with unbundled HWP costs not included on utility consolidated bills
The utilities said that their billing agreements with ESCOs limit UCB, and purchase of receivables, to commodity charges
Utilities said that requiring line-item HWP billing on UCB would necessitate costly updates to utility systems, and also implicates HEFPA concerns. The utilities noted that the technical barriers to line-item billing applies to utilities' own charges as well, stating that non-commodity utility charges or credits, such as installation charges or an energy efficiency rebate, are provided under a separate issuance to customers by utilities, not on the monthly bill
The utilities oppose expanding POR to include HWP
Given other reforms proposed by DPS Staff, the utilities questioned if the ESCO-HWP market will continue to be viable, which the utilities said favors a course which does not rely on the utilities incurring costs to implement line-item HWP billing under UCB
"[T]he distribution utilities should not have to bear the cost of system upgrades to bill and collect ESCO charges for an insurance product that is also provided by third-party entities and DPS Staff has found to be of dubious value," the joint utilities said
Various ESCO parties filed comments generally opposed to most of the recommendations in the Staff whitepaper, arguing that Staff has not developed a record supporting the recommendations, and/or the proposals are unduly burdensome, and/or the matters should be addressed in the Track II value-add collaborative
Family Energy said in its comments that, "in November 2022, Staff issued interrogatory requests to ESCOs that were
offering HWPs. Based upon the interrogatory responses, Staff drew some inferences about ESCO
product offerings that ostensibly underly [sic] the White Paper. To be clear, the ESCO data responses
are not publicly available, and thus not subject to outside critical review or challenge. An ESCO
is only privy to the answers it directly provided to Staff. Notwithstanding this limitation, Family
Energy can unequivocally state that there are generalizations made in the White Paper that do not
reflect its business model. Family Energy filed its sales agreement and supporting documentation
for its HWP for Staff approval
and also fully responded to the interrogatory requests. Family
Energy objects to the application of the broad-brush conclusions in the White Paper to its HWP.
Moreover, Family Energy believes it is fundamentally unfair and unjustified to adopt the product
and pricing changes, as well as the third-third party provider prohibition, that are proposed in the
White Paper based on those generalizations."
Case 24-M-0324 et al.
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August 26, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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