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NY PSC Order Revoking Retail Supplier's Eligibility Cites What PSC Deems Non-responsiveness, "Insufficient Internal Compliance Practices"
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The New York PSC issued a written order revoking the ESCO eligibility of Polaris Power Services LLC (Polaris Power or the Company), and the PSC's decision to order revocation, rather than alternative penalties, appears to consider, in large part, what the PSC deemed to be Polaris Power Services LLC's delayed responses to Department of Public Service Staff inquiries as well as what the PSC termed, "insufficient internal compliance practices."
The PSC in its revocation order ultimately held that Polaris Power Services LLC failed to honor the terms of its sales agreement to purchase a contract-specified percentage of RECs, beyond the amount required for RPS compliance, in violation of UBP Section 2.5.b., and failed to enroll mass market customers on compliant contracts, due to the enrollment of customers defined as mass market onto non-compliant products, in violation of the PSC's December 2019 retail market order
Polaris Power Services LLC's responses to these allegations were covered in our prior story here
With regards to what the PSC found was failure to retire an appropriate amount of RECs for voluntary green contracts, the PSC said that the contracts required 50% of the product to be renewable
Addressing the REC-related allegations, the PSC said, "In the OTSC [order to show cause] Response, Polaris Power first offers to 'comply with the renewable obligations in its contracts with customers' by offsetting 50 percent of customers’ usage by purchasing RECs or making alternative compliance payments (ACPs) to the New York State Energy Research and Development Authority (NYSERDA) upon receipt of an invoice from NYSERDA. The Company argues that it should now be permitted to make ACPs in lieu of purchasing RECs for 2022,and affirmatively represents that its 2022 REC compliance obligation should be approximately $17,482. Polaris Power further states that 'the delay in providing its 2022 REC report ... should not result in penalties beyond payment of the required ACPs since there have previously been several other ESCOs that have had similar compliance issues that were not found in violation of Department rules.' The Company also contends that it 'previously paid all other NYSERDA invoices associated with its 2022 [Renewable Energy Standard] requirements, including those for Tier 1 RECs and Zero Emissions Credits.' Finally, Polaris Power urges leniency for its admitted and uncontested failure to comply with its contractual obligations to purchase 2022 voluntary RECs, contending that this failure represents 'a solitary occurrence that will not be repeated.'"
Addressing Polaris Power Services LLC's response, the PSC said, "While the Commission understands that the Company now is willing to address its admitted 2022 voluntary REC shortfall for this second obligation (whether with RECs or VCPs), the Commission has substantial concerns about the Company’s response to Staff’s inquiries on this subject over time. Polaris Power not only delayed in providing the relevant data at the appropriate time in June 2023, at the close of the compliance period for VCPs, it also ignored several email inquiries from Staff on this subject in 2023, and only indicated for the first time that it served customers on a renewable product in 2022 on February 13, 2024. Furthermore, Polaris Power only acknowledged that it served renewable load in 2022 after Staff requested copies of all active customer contracts, which conclusively demonstrated that Polaris Power served customers on renewable products during that year. Thus, Polaris Power ignored its contractual obligations to its customers who chose to enroll in a product that committed Polaris Power to retire RECs or pay VCPs to match its customers’ electric load for 2022, and also ignored multiple Staff inquiries on this subject and thus ignored the regulatory framework underlying its ability to market to consumers in New York."
The PSC distinguished the behavior of Polaris Power Services LLC versus another proceeding related to REC retirements by an ESCO, with Polaris Power Services LLC citing such case as supporting a remedy other than ESCO eligibility revocation
However, the PSC said that in such other case, the subject ESCO retired the appropriate amount of RECs, but failed to retire those RECs in the appropriate NYGATS subaccount
"Here, Polaris Power admittedly did not retire 2022 RECs, as required, and did not acknowledge that it had this renewable load until more than a year after that compliance period ended. As previously noted, Staff contacted Polaris Power on several occasions inquiring about its 2022 voluntary renewable load but received no response or acknowledgment that the Company served customers on renewable products until February 13, 2024," the PSC said
"In sum, the Commission finds that Polaris Power’s failure to honor the terms of customer sales agreements on such a large scale is not a 'solitary occurrence,' as the Company contends. The Commission holds that Polaris Power’s pattern of behavior, as outlined above, is indicative at minimum of insufficient internal compliance practices and, moreover, represents a failure to comply with a core compliance condition in the retail market space. Indeed, the Company’s OTSC Response does not address several other Staff allegations regarding Polaris Power’s internal recordkeeping, including the Company’s failure to properly associate customer names and account numbers with sales agreements. The record here demonstrates more than a solitary compliance failure. Polaris Power has therefore demonstrated a pattern of consistent disregard for the consumer protections and regulations set forth in the UBP," the PSC said
Regarding the enrollment of mass market customers on non-compliant products, the PSC rejected arguments from Polaris Power that there was "confusion" amongst all parties about how to classify certain customers, with Polaris Power including DPS Staff and the utilities amongst those confused
The PSC said, "Much of the Company’s argument as to why it should not be penalized for violating the December 2019 Order centers on what it describes as 'confusion ... amongst the Department and the utilities as to how to classify certain customers.' Polaris Power attempts to analyze correspondence between Staff and a utility that it claims 'appears' to demonstrate confusion regarding classification of mass-market and small commercial accounts. Based on this reading of select emails, Polaris Power concludes that Staff and the utility are using a definition of mass-market customers that does not comport with the Commission’s definition in the February 23, 2016 Order Resetting Retail Energy Markets and Establishing Further Process.
In light of what it calls this 'confusion amongst all parties,' Polaris Power contends that it would be improper to penalize it for misunderstanding the Commission’s requirements."
The PSC also summarized Polaris Power's response to the show cause order as also indicating that, as described by the PSC: "Polaris Power first states that it 'originally relied heavily on third parties' to ensure compliance with relevant Commission rules and admits that this practice resulted [sic] improper customer enrollments and classifications."
The PSC said, "As an initial matter, the Commission finds it concerning that Polaris Power attempts to explain away hundreds of instances of non-compliance by blaming third parties. It appears that the Company accepted the advice of third parties and/or contract enrollments facilitated by third parties without subsequently reviewing contracts to ensure compliance with Commission orders and regulations. Polaris Power did not even become aware of these contract issues until Staff began its inquiry, demonstrating that the Company’s internal compliance protocols (to the extent they exist) are ineffective."
The PSC said, "ESCOs must perform due diligence to ensure customers are classified properly. ESCOs can also access customer service classifications through the respective utilities at several junctures during the enrollment process, including during Electronic Data Interchange. Therefore, claiming a customer was enrolled on an incorrect product due to an unintentional, accidental, or clerical error demonstrates poor business practices by Polaris Power."
The PSC said, "While the Commission recognizes Polaris Power’s offer to re-rate customers $45,000, it is unclear how Polaris Power arrived at this re-rate number. The lack of Company information to support or vet this number diminishes and undercuts its utility or accuracy. The Commission also finds that Polaris Power’s offer is insufficient because the Company enrolled the vast majority of its customers on non-compliant contracts. Moreover, Polaris Power did not offer to come into compliance with the December 2019 Order by switching customers who were improperly enrolled on commercial contracts to compliant mass-market contracts."
Addressing alleged confusion about what customers are classified as mass market, the PSC said, "Polaris Power relies heavily on an isolated email exchange to insinuate that Commission action is unwarranted because [DPS] Staff and the utility 'appear' to be confused about customer classifications. This email exchange simply reflects Staff’s attempt to clarify mass market and commercial customer classifications after the Company submitted its contracts for Staff review. Given Staff’s observation of glaring enrollment discrepancies in Polaris Power’s submission, it was appropriate for Staff to seek to confirm its assessment and interpretation of information."
In sum, addressing all the findings, the PSC said, "These violations were not isolated events, but rather encompass numerous instances of non-compliance that extend across the Company’s business practices that reflect a pervasive disregard of the UBP and the Commission’s December 2019 Order."
With Polaris Power's ESCO eligibility revoked, the PSC ordered Polaris Power's customers returned to default service within 60 days
The PSC's revocation order did not indicate the number of customers served by Polaris Power
In 2024, DPS Staff had alleged that Polaris Power was serving over 800 mass-market customers
Case 24-M-0482
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July 23, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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