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New York PSC Rules On Applicability To Commercial Customers Of New Rules Requiring Customer Consent For Any Price Change (Including Variable Rates)
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The New York PSC adopted changes to the Uniform Business Practices to implement revisions to General Business Law (GBL) §349-d, which, among other things, generally prohibits ESCOs from changing the rate charged to a customer (with customer having the meaning as defined by law) without the affirmative consent of the customer
See background on the new law here
§349-d provides that, "No material change shall be made in the terms or duration of any contract for the provision of energy services by an ESCO without the express consent of the customer."
§349-d specifically provides that, "A change in price or a change to or from fixed or variable pricing shall be deemed to be material."
§349-d defines "customer" to mean, "any person who is sold or offered an energy services contract by an ESCO (i) for residential utility service, or (ii) through door-to-door sales." Under the law, door-to-door sales includes door-to-door sales to business customers, excluding scheduled appointments
As previously reported, in a DPS Staff proposal to implement the new provisions of §349-d, Staff's changes to the UBP would not have limited the new material change and express consent provisions to residential customers and door-to-door sales. The proposed changes, as drafted by Staff, would have applied to all customers, including C&I customers who were not subject to a door to door sale
The PSC, in mostly adopting Staff's changes, confirmed that the new material change and express consent provisions only apply to residential customers and customers solicited via door-to-door sales, and re-arranged the placement of the new and modified provisions of the UBP such that the changes are included within a part of the UBP expressly limited to residential customers and customers solicited via door-to-door sales
The PSC explained, "As
proposed [by Staff], the structural changes would have expanded the
applicability of these consumer protections beyond those
residential customers and those marketed to via door-to-door
marketing, which are the customer groups to which GBL §349-d is
applicable. Including these requirements within the existing
UBP §5 preserves that applicability."
Unless otherwise noted to the contrary, all requirements in this story are limited to residential and door-to-door contracts, even when not specifically identified as being limited to residential and door-to-door contracts
The PSC's adopted changes to the UBPs provide that, for residential and door-to-door contracts, all changes to the terms of the contract,
including changes to the price, commodity rate, and product or service
type, will be considered material, and will require that the ESCO obtain the customer’s express consent.
This new requirement applies to variable rates, the PSC held, as the PSC rejected arguments from ESCOs that variable rate contracts already inform customers at the time of contracting that the price will change, and thus a change in price is not material
More specifically, even guaranteed savings products which change in price during the term, while still providing guaranteed savings over the term, must receive express consent for a change in price, which represents a change from prior PSC policy
The PSC said that §349-d requires consent for any price change for residential and door-to-door contracts, with no exceptions
"Regarding reference to the
Commmission’s [sic] prior exception to the affirmative consent rule
for enrollments in a guaranteed savings product, the Commission
notes that this exception is no longer available and ... modifies the UBP to remove this option," the PSC said
Implementing additional parts of §349-d, the PSC will require ESCOs to use an updated standard contract renewal notice
Renewal notices will now be required for month to month contracts, including variable rates, if the new month of service has a changed rate (or other material change)
The PSC said, "Though the
Commission considers month-to-month agreements to expire and
renew each month, it has not historically required renewal
notices to be sent each month. However, given the explicit
statutory language that a change in price is considered a
material change, this is no longer the case and ESCOs are now
required to receive express customer consent for monthly rate
changes."
If the new month under a month to month contract does not include a rate change or other material change, the PSC ruled that a renewal notice is not required to be sent
"However, a customer notice and express customer consent is
required if a material change occurs in any given month,
including a change in price as part of a variable rate
agreement," the PSC stressed
The PSC noted that its adopted changes will prohibit customers, including low-income
customers, from being automatically switched to a guaranteed
savings product without the customer's consent
As previously reported, §349-d requires residential and door to door renewal notices to include a comparison to utility rates, and information on how the customer may obtain shadow billing data from the utility
The adopted revisions to the UBPs state, "In any notice regarding contract renewal,
the provider shall disclose the following information as it exists at the
time of such notice: (i) the price the provider currently charges for
energy services; (ii) the price it proposes to charge upon renewal; (iii)
the price that is charged by the customer's distribution utility; and (iv)
information notifying the customer how they may compare past bills
with what they would have been charged had they received energy
services from their respective distribution utility, including, the
internet address of any bill calculator offered on such customer's
distribution utility's website."
Although not stated in the revised UBP itself, the PSC adopted the use of the existing 12-month trailing average utility supply rate, that the distribution utilities already post, as the, "price that is charged by the customer's distribution utility," which must be included in renewal notices
ESCOs will be required to file sample renewal notices, conforming to the new requirements, as part of their eligibility filings
Existing ESCOs shall provide
these sample renewal notices at the time of their next annual or triennial
compliance filing, whichever comes first, and on an ongoing
basis as part of triennial compliance filings thereafter.
An ESCO must use the renewal notice(s) which the ESCO had submitted to DPS as a sample. Any change to an ESCO's renewal notice requires DPS Staff approval
The PSC declined to allow ESCOs to use a mechanism other than regular mail to send the material change and renewal notices
Regarding the applicability of the various new provisions to opt-out municipal aggregations, the PSC generally noted that GBL §349-d does not include any carve out or exceptions for
CCA programs, and said that the new material change notice consumer protections would apply to
all ESCOs serving residential customers or customers marketed to
via door-to-door sales, including those that do so as part of a
CCA program.
The PSC added, "However, such material change and
renewal notices will follow the CCA consent process whereby
municipal consent serves as a proxy for individual customer
consent."
The PSC specifically added the following definitions to the UBPs:
Express Customer Consent: Consent given directly and knowingly by the customer, either verbally, electronically or in writing, that shall be maintained by the ESCO in a verifiable format.
Material Change: Any change that affects the rates, terms, and conditions of service contained in the customer agreement. For example, this could include but not be limited to, the commodity rate, product term, or product type.
The PSC declined to adopt a definition of material change which included more specific examples as proposed by PULP (noted below), but the PSC said that the Commission, "acknowledges that many of the changes
included as specific examples [by PULP] would be considered a material
change under the adopted definition."
In addition to the changes included in the PSC's adopted definition, PULP had proposed that Material Change be defined as also including, "introduction or removal of fees, such as administrative fees; introduction or removal of introductory or promotional rates; modifications to the frequency or timing of billings cycles; changes in the proportion of energy sourced from renewable resources; or modifications to customer support hours, response times, or contact methods."
The revised UBPs provide that an ESCO can not charge a termination fee to a customer served on a product which has a material change and for which express consent was not obtained
The PSC said that the Commission "anticipates" that the Long Island Power Authority’s Board of Trustees will adopt similar modifications, reflecting all of those adopted changes described above, for the PSEG Long Island retail access program
The PSC also directed DPS Staff to collect information on the number of customers
served on month-to-month contracts by each ESCO.
The PSC said that DPS Staff
"should" collect this information with respect to all ESCO
customers, not just residential customers or those
marketed to via door-to-door sales, the PSC said
This information shall be
compiled and reported to the Commission on March 1 each year.
The PSC was not explicit as to whether such information, whether masked or identifying each ESCO by name, would be made public
Case 98-M-1343
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November 13, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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