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New York DPS Staff Recommend That PSC Terminate Authorization For Opt-Out Enrollment For Municipal Aggregations
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Staff of the New York Dept. of Public Service have recommended that the PSC terminate the authorization which allows municipal aggregations to enroll retail electric and gas customers on an opt-out basis, with Staff citing higher rates paid by Community Choice Aggregation (CCA) customers and what Staff said was a lack of benefits
"Staff recommends that the Commission discontinue the CCA program in
New York State," Staff said
Similar to many retail market designs, CCAs in New York were a creation of the PSC, not statute, and thus the PSC itself may modify or terminate the policy allowing CCAs
Staff said that any remaining current CCA customers should be returned to default service
Staff's proposal concerning CCA policy was issued for public
comment and consideration by the PSC.
"Staff finds that CCA programs have not consistently delivered sufficient meaningful
benefits to mass-market customers to justify continued operation under the opt-out enrollment
model," Staff said
"Staff finds that the use of opt-out
enrollment without demonstrable customer benefits raises significant consumer protection
concerns. Specifically, where customers are enrolled by default into products that result in
higher costs relative to utility supply, the opt-out model may lead to outcomes that are not in the
public interest. Staff finds that the continued use of opt-out enrollment is not appropriate when
the underlying program does not consistently deliver measurable benefits to customers or to
State energy goals," Staff said
Staff stated that, upon Staff's review:
1) "CCA
participants have not, on average, realized cost savings relative to utility default supply;
2) "there
is limited evidence that implementation of a CCA program results in a meaningful increase in
municipal engagement on energy-related issues beyond the activities already undertaken by
participating municipalities;
3) "no opt-in products were developed through CCA programs with
verifiable contributions toward the goals of the CLCPA, and;
4) "there are no measurable changes
to costs for purchasing RECs for non-CCA participants"
"The CCA program has not achieved its objective of delivering cost savings to
participating customers and has, in many cases, resulted in higher costs relative to utility default
supply service. The program does not demonstrate measurable contributions to the State’s clean
energy goals beyond those achieved through existing policies and programs. Municipal
participation and market interest in the program have declined significantly, with minimal
ongoing activity. Compliance and administrative challenges have continued despite Commission
actions to strengthen program requirements. The opt-out enrollment model, when combined
with the limited or no customer benefits, raises consumer protection concerns," Staff said
Staff reported that, by the end of 2025, all CCA programs across the state ended due to lack of
competitive bidding from ESCOs to serve the CCAs, and due to bid responses that did not meet the criteria necessary to continue the
program.
"The lack of participation by ESCOs raises concerns about the continued operation of this
program," Staff said
Staff said that Staff evaluated alternatives to a full termination of CCA authorization in New York, but ultimately Staff recommended full termination of CCAs
These rejected alternatives included adjusting the opt-out enrollment structure, implementing pricing
guarantees, adding enhanced consumer protections, limiting participation to opt-in renewable
products, and increasing regulatory oversight.
In terms of Staff's findings which led to Staff's recommendations, Staff reported that most CCA administrators and municipalities offer default products
consisting of 50-100% renewable energy, which often exceed the renewable energy mix included
in standard utility supply service. To provide this greater percentage of renewable energy, such
renewable default products are typically priced at a premium, Staff said
Originally, "[t]hese premiums were not
disclosed to CCA customers who were being opt-out enrolled into a higher priced supply product
until November 2024 when the Commission directed administrators to provide a comparison of
the CCA product’s rate to the utility posted 12-month trailing average and a disclosure that the
customer would be paying a premium for the renewable product offering," Staff said
Despite changes from the
PSC related to CCA product pricing disclosures and transparency, Staff said that, "the product price has continued to
remain above the default utility supply price, with municipal officials acknowledging and
agreeing to premium prices for opt-out enrolled mass-market customers."
Staff said that an analysis prepared for Staff confirms that, on an aggregate basis as well as for individual customers,
"CCA participants have rarely realized savings compared to utility default supply over their
contract periods."
The analysis indicates that customers who enrolled in opt-out, default CCA
products have paid a premium "well above" utility default supply for most years of the program’s
operation, Staff said.
The analysis shows that from 2019 to Q3 2025, on a statewide basis, customers
enrolled in an opt-out electric CCA program paid an average of 16.4% more than they would
have if they remained as full-service utility customers.
Some years
are "considerably higher" than this 7-year electricity CCA average, Staff said, with customers paying 32.5%, 33.9%, 38.4%,
and 39.2% more than default electric utility rates in 2019, 2020, 2023, and 2024 respectively.
For natural gas CCAs, for the period of 2021 to Q3 2025, the report finds that, on a statewide basis, customers
enrolled in an opt-out gas CCA program paid an average of 37.5% more than they would have if
they remained as full-service utility customers.
For gas, some years are "considerably higher" than the 5-year gas CCA average, Staff said, with
customers paying 75%, 43.7%, and 17.8% more than default gas utility rates in 2023, 2024, and
2025 respectively.
"Staff finds that the lack of customer savings, let alone routinely
higher customer energy costs, to be inconsistent with a central objective of the CCA program --
to allow opt-out enrollment only for the purpose of achieving customer savings through
aggregated supply contract procurement," Staff said
"Further, the continuation of pricing at levels higher
than the utility, even after program modifications and enhancements, indicates to Staff that the
CCA model does not allow for Administrators and Suppliers to offer competitively priced supply
for an opt-out mass-market program," Staff said
Staff also evaluated whether CCA programs result in "identifiable, incremental clean energy
development, or offerings that are specifically attributable to municipal CCA participation, rather
than renewable energy activity that would likely have occurred through existing State or utility
programs."
Staff said that no CCA offering met all of these criteria. As an example, Staff said that CCAs implementing opt-out community distributed generation (CDG) did not result in new CDG projects being built specifically for the CCA, but rather relied on projects which were not built specifically for the municipality's CCA
program.
Staff also alleged ongoing non-compliance by CCAs and their administrators and/or ESCOs despite nearly a decade of CCA operation
"Staff’s ongoing review of the CCA program identifies multiple instances in which CCA
Administrators, along with ESCOs and municipalities, failed to fully comply with Commission
rules and regulations. These issues include, but are not limited to, missing or inaccurate
customer disclosures regarding premium pricing and product terms, inconsistencies between the
filed implementation plans and actual program operation, deficiencies in reporting, and the use
of non-compliant outreach and education material that required Staff clarification and program
modifications," Staff said
Staff said that, as recently as the end of 2025, Staff continued to issue municipality filing denials to
3 separate, well-established CCA administrators, due to, among other issues, the lack of
required outreach and education events and materials, resulting in a lack of customer
understanding of the CCA's opt-out product which charged a premium price
"Throughout 2025, Staff issued more than 30 filing rejections across multiple
administrators and municipalities, for deficiencies, including failure to properly notice outreach
events, failure to provide the minimum required material within outreach events, insufficient
number of outreach events, program website deficiencies, opt-out letter issues, and general
program misinformation," Staff said
Staff's report is here
Case 14-M-0224
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Staff Reports CCA Average Rates Up To 40% Higher Than Default Service
August 26, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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