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New York PSC Issues Order Allowing Brokers To Provide Bond As Form Of Security, Sets Compliance Deadline
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The New York PSC issued an order allowing energy brokers and energy consultants to provide a surety bond as the form of financial security required for registration
The PSC adopted DPS Staff's previously reported proposal without modification.
Under the PSC's order, brokers/consultants seeking to use a bond shall provide, "[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".
The specifics of the adopted Staff proposal are further detailed below
Surety bonds used by brokers/consultants must follow a specific template provided by Department of Public Service Staff
The UBPs 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
The PSC established a deadline of April 30, 2026 for every registered energy broker and energy consultant to provide the required security, per UBP §11.B.1.j and
UBP-DERS §4.B.1.j, which shall be a standby
letter of credit or a surety bond
The surety bond template is set forth in the PSC's order starting on page 17 (click here), but within 3 days (or 4 days per an ordering paragraph) DPS Staff shall post such template on the PSC website to be accessed by brokers and consultants
DPS Staff will review the newly required security submissions by brokers and consultants, and shall inform brokers/consultants by October 31, 2026 whether their security submission is approved or denied
Staff will also resume its review of previously submitted standby letters of credit, which had been paused pending a since-resolved court appeal. Staff shall complete such review, and inform brokers/consultants of approval or denial, by October 31, 2026
The PSC lifted a prior suspension of
the requirement that broker/consultant applicants shall provide a method of financial
accountability
The PSC adopted changes to the UBPs to effect the PSC's orders, effective April 30, 2026
In addition to the monetary values noted above, the Staff proposal adopted by the PSC provides that the surety bond shall meet 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."
The PSC declined to impose additional managerial and competency requirements on brokers, as had been suggested by Stand Energy in comments to the PSC. The PSC also declined to adopt a requirement that customers state how their prior energy supplier was paid.
The PSC said that such proposals were outside the scope of the rulemaking
Stand Energy had also provided comments seeking a requirement that brokers/consultants shall disclose that their fee is earned in the form of a charge per dekatherm of gas
The PSC did not adopt any new disclosure requirements for brokers/consultants, but noted that, under existing rules, brokers and consultants, "shall disclose
their method of compensation as it is known at the time of
contracting, whether it be a flat fee, a recurring fee, or a fee
per unit of energy ...."
The PSC noted that brokers and consultants are thus already, "required to
disclose that their compensation is earned in the form of a
charge per dekatherm of gas if that is the method of
compensation."
Cases 23-M-0106, 98-M-1343, 15-M-0180
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January 28, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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