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New York Dept Of Public Service Resuming Broker Regulation Activities & Implementation, Except Where Prohibited By "Narrow" Preliminary Injunction
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The New York Dept. Of Public Service has posted to its broker regulation webpage an announcement that Department of Public Service Staff will be resuming implementation of the PSC's April 2024 broker regulation order, except for those limited facets of the order that have been stayed by a "narrow[]" preliminary injunction
EnergyChoiceMatters.com had exclusively first reported on Sept. 12 the issuance of a preliminary injunction, which EnergyChoiceMatters.com reported, based on ECM's own interpretation, as only applying to the April 2024 order's prohibition on the use of bonds for broker registration and to the April 2024 order's requirement that brokers must file a letter of credit in order to meet the financial fitness requirement for broker registration.
EnergyChoiceMatters.com had understood and had reported that the court's preliminary injunction would allow all other aspects of the April 2024 broker regulation order to proceed
The DPS appears to be interpreting the preliminary injunction in a similar manner
On September 16, the DPS announced on its website that, "[the] preliminary injunction is more narrowly tailored than the August 1 TRO [temporary restraining order] and stays only the financial accountability requirement of the Commission’s underlying administrative orders."
Under the preliminary injunction, the DPS website avers that the DPS is not prohibited from implementing provisions of the April 2024 broker regulation order that are, "unrelated to the financial accountability requirement."
As such, DPS Staff will re-start work on implementing the broker regulation order on Sept. 17, subject to the stay on only the financial fitness provisions
While the DPS website broadly states that work will resume on broker regulation activities, further details on what specific actions will be undertaken were not provided
The announcement on the website states that it is "anticipated" that the DPS may issue notices concerning changes to the compliance schedule, with such notices to be posted in Case 23-M-0106
The court, in issuing a preliminary injunction, had specifically ordered as follows in an ordering paragraph:
"ORDERED that pending a determination and decision by this Court, respondent PSC, its agents, officers, employees, successors assigns and all persons acting in concert with it or on its behalf, is hereby stayed from enforcement of the Ordering Clauses of respondent's 'Declaratory Ruling and Order on Rehearing' issued on April 18,2024, specifically Ordering Clauses 3, 6 and 7, which specifically remove a bond as an acceptable form of financial accountability as set forth in the Public Service Law $ 66-T*2 and instead require an energy broker or energy consultant to submit an irrevocable letter of credit with their registration package to respondent PSC."
Ordering Clauses 3, 6 and 7 are summarized below:
3. The new Uniform Business Practices (UBPs) reflecting the new broker rules are effective July 31, 2024
6. Brokers/consultants shall comply with the new UBPs
7. Brokers/consultants shall register with the PSC by July 31, 2024
The court in issuing the preliminary injunction had also said in dicta: "In this matter, it is within the Court's discretion to only enjoin enforcement of the financial assurance requirement and the removal of bonds as a method of financial accountability. Addressing that alleged harm does not require an injunction barring implementation of PSC's entire program. This outcome would avert any alleged losses of market share or good will while also permitting the PSC to proceed with the consumer protection rules that the Legislature has directed it to implement, to review applications, communicate with market participants, and review and incorporate staff's s final revisions to the regulations while this matter is pending."
Certain ESCO parties have stated a belief that the phrasing of the court's ordering paragraph, quoted above, does not stay only the financial assurance requirement. ESCOs parties have noted that the court's ordering paragraph does not use the terms "in so far as" or "as they relate to" or any similar limiting language in describing the application of the stay to Ordering Clauses 3, 6 and 7, and thus, ESCOs argue, the stay applies to the entirety of these ordering clauses. ESCOs argue that the use of the term "which" in the court's ordering paragraph explains why such Ordering Clauses 3, 6 and 7 must be stayed, because they are the vehicles under which the financial fitness rule is being implemented. Such explanation, ESCOs aver, expressly does not limit the stay to only the financial fitness aspect of Ordering Clauses 3, 6 and 7
Given that Ordering Clause 3 reflects the adoption of the modified uniform business practices implementing the broker regulation order, a stay of Ordering Clause 3 in its entirety would in contrast block much of the PSC's broker regulation order, including the PSC's rejection of excluding independent contractors or "1099's" from the broker/consultant registration requirement.
Albany Supreme Court: Index No: 907356-24
PSC Case 23-M-0106
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DPS Says Only Financial Accountability Requirement Stayed
September 16, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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