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New York DPS Staff Propose Amendments To Implement Use Of Bonds For Broker Financial Assurance
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Staff of the New York Dept. of Public Service have proposed amendments to the Uniform Business Practices to allow the use of surety bonds as a means of complying with the financial assurance requirements for registration as a broker or consultant
Currently, the UBPs provide that a broker or consultant may only use a letter of credit to meet the financial assurance requirements
As previously reported, a New York state court found that, per the broker registration statute, the PSC is not permitted to remove the use of a bond as an acceptable form of financial security for broker/consultant registration
In light of the court's order, DPS Staff specifically propose adding the following language to the UBPs to allow the use of bonds for broker/consultant registration
DPS Staff's proposal would provide that a broker or consultant may demonstrate the required financial accountability in the form of, "[a] surety bond issued by a reputable financial
institution on a form to be prescribed by the Department
with a penal sum of $100,000 for registering Energy
Brokers; and $50,000 for registering Energy Consultants,
that meets the following conditions:
1. The New York State Department of Public Service
shall be named as the obligee;
2. As a condition of the bond, the applicant and its
employees are required to comply with all applicable
provisions of the laws of the State of New York and
the rules, regulations, and orders of the Commission
and of the Department, including, but not limited to,
the Uniform Business Practices and the Uniform
Business Practices for Distributed Energy Resource
Suppliers;
3. If the applicant breaches the bond’s conditions,
the Department may recover against the bond for the
reimbursement of fees or other charges that the
Department has determined were improperly collected
from customers; for the payment of past due fees or
other charges owed by the applicant to the Department,
including any unpaid penalties; and for any customer
reimbursements or other remedial or financial
obligations of the applicant in the event of the
applicant’s insolvency, liquidation, or bankruptcy or
the expiration, surrender, or revocation of the
applicant’s registration;
4. Immediately upon recovery on any claim or action
on or under the bond, the applicant shall file a new
or supplemental bond restoring the face amount of the
bond to the required amount;
5. The bond shall be continuous and shall remain in
force until the surety is released from liability by
the Department or until the bond is canceled by the
surety. Without prejudice to any liability accrued
prior to the cancellation, the surety may cancel the
bond on ninety days advance notice in writing sent by
mail to the applicant and to the Department;
6. The bond’s termination shall not terminate or
otherwise affect any liability of the applicant or its
employees to its customers or to the Department;
7. The surety will give prompt notice to the
applicant and to the Department of any notice received
or action filed alleging the insolvency or bankruptcy
of the surety or alleging any violations of regulatory
requirements which could result in suspension or
revocation of the surety’s license to do business. In
the event the surety becomes unable to fulfill its
obligation under the bond for any reason, notice shall
be given immediately to the applicant and to the
Department;
8. All commissions, fees, and other charges with
respect to the surety bond shall be paid by the
applicant."
Staff proposes that brokers and consultants be
given until 60 days, after the issuance of a Commission order
addressing Staff's proposal, for brokers/consultants to come into compliance with any
adopted revisions to UBP § 11.B.1.j and UBP-DERS § 4.B.1.j. allowing the use of bonds and the new rules for such
The UBPs would also still allow for broker/consultant registration the use of an irrevocable standby letter of credit issued by a
reputable financial institution in the amount of $100,000
for registering Energy Brokers and $50,000 for registering
Energy Consultants
Case 23-M-0106 et al.
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August 28, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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