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PSC Revokes Eligibility Of ESCO, Orders Drop Of Customers To Default Service The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
The New York PSC has revoked the eligibility of
Mpower Energy LLC to
serve energy customers in New York State as an ESCO, and ordered that Mpower's customers be dropped to default service
While the PSC found numerous violations of the Uniform Business Practices (UBP) described below, much of the violation findings relate to the PSC holding that Mpower's legacy customer contracts, entered into prior to the PSC's retail market reset order, were not unique "continuous" agreements that continued to be exempt from the PSC's reset order and the order's attendant product restrictions and requirements.
Among other things, the PSC found that Mpower did not transition certain customers to PSC-compliant products after the PSC's retail market reset order took effect
Mpower argued that the relevant customers were on "continuous service agreements" that did not expire or renew, and thus were eligible for grandfathering under the PSC's reset order, in which the end of a contract term or a renewal triggered the compliance obligations for customers served on an existing contract (for month to month service, the PSC previously held in the reset order, and a court affirmed, that the end of the current billing period served as the end date for any legacy month to month agreement)
The PSC rejected Mpower's argument, stating that, "Mpower uses semantic posturing to claim that
its legacy contracts never expire and are therefore beyond the
scope of Commission regulation."
The PSC held that, "Under the Company’s 'forever'
contract theory, the Commission could never incrementally
strengthen consumer protections over time. The Company’s
position is therefore untenable, as it frustrates any Commission
attempt to regulate a significant portion of Mpower’s existing
contracts."
The PSC further said that, "The Company’s theory ignores the Commission’s broad
price control and consumer protection authority under the Public
Service Law."
The PSC held that, "The contracts that Mpower submitted to Staff are
month-to-month variable-rate agreements or fixed-term, fixed-rate agreements that the Company contends automatically
'continue' at a month-to-month variable rate upon expiration of
the fixed-rate term, unless renewed at the fixed rate. Based on
the Commission and judicial precedent ... these
month-to-month contracts were deemed to expire, at least for
regulatory purposes, at the end of the monthly billing cycle".
The PSC further emphasized that, "The December 2019 [reset] Order confirmed that, notwithstanding contract
language providing for automatic renewal, fixed-rate contracts
that renew automatically unless terminated at the end of the
fixed-rate term must be transitioned to a compliant product or
be transferred back to default utility service."
The PSC said, "Mpower also presents a distinction -- that we find to
be unpersuasive -- between what it claims are 'continuous
contracts' and contracts that 'renew' or expire at the end of a
term or monthly billing cycle. As explained, after the
effective date of relevant portions of the December 2019 Order,
the end of a term or billing cycle subjected automatically
renewing contracts to the regulatory scheme that the December
2019 Order established. Mpower’s contracts are not unique in
this regard. The mere fact that Mpower’s contracts state that
they 'continue' until terminated by either party does not shield
the Company from Commission regulation."
The PSC also found that Mpower changed certain of its customers' product without affirmative consent
The PSC said that Mpower moved certain legacy customers from a non-green product to a PSC-compliant renewable plan after the reset order
Mpower argued that the terms and conditions of the plan did not change for the relevant customers, and thus no affirmative consent was needed
As quoted by the PSC, Mpower has said, "since the terms and conditions of the contract were not
modified in any way, customer consent is not required to change
a customer’s fuel supply, including to provide the customer with
renewable energy."
The PSC rejected this argument
"ESCOs cannot unilaterally elect to shift customers to a
different product type -- like changing from a standard to a
renewable product -- without first obtaining the customer’s
affirmative consent to receive that new product," the PSC said
"The UBP
clearly states that customers must agree to any changes to their
'product or service type,' which necessarily includes the source
of that energy. Changing the product from a standard electric
product to a renewable energy product therefore constitutes a
'material change' under the UBP," the PSC said
Again rejecting
Mpower’s argument that its legacy customers were on non-expiring contracts, the PSC held that, per the approved products under Mpower’s ESCO eligibility, Mpower was required to move legacy customers to a compliant renewable product. For these customers, the PSC found that Mpower failed to retire the necessary amount and/or type (local) RECs
The Commission rejected Mpower’s contention that
receiving approval to offer a home
warranty product (HWP) to mass market customers
exempted Mpower from supporting any renewable load
accompanying the HWP with compliant REC purchases.
The PSC said, "While Mpower received
approval to offer a HWP, the inclusion of renewable language in
Mpower’s post-April 16, 2021 contracts obligated the Company to,
among other things, purchase a specific amount of NYGATS-compliant RECs. It was therefore incumbent on the Company to
abide by the terms of its own agreements. Based on Mpower’s
logic, the mere inclusion of a HWP in sales agreements negates
any product or pricing requirement implemented by the December
2019 Order, such as a GSP or fixed-rate product with a price
limit. This interpretation is not consistent with actions the
Commission took to 'reset' the ESCO market to increase
transparency and improve consumer protections."
The PSC also found, for certain renewable plans, that Mpower impermissibly used national RECs rather than local RECs which are required for a green plan to be a compliant mass market product
For certain friends and family accounts enrolled by Mpower, the PSC said that Mpower does not contest that Mpower failed to document
customer authorization for the enrollments that Staff identified
(as required by UBP Section 4.B.1), did not retain this proof of
authorization for a minimum of two years or for the length of
these sales agreements, whichever is longer (as required by UBP
Section 4.B.3), and did not submit corresponding enrollment
requests (as required by UBP Section 5.D.4).
Most notable is the PSC's discussion of allegations concerning Mpower's alleged offering of a guaranteed savings plan (GSP)
Based on data responses, and the fields and pricing included in such, Dept. of Public Service Staff had raised concerns that Mpower may have offered a GSP despite not being authorized to do so
Mpower argued that the relevant plans were reduced rates offered only to friends and family which were not described as guaranteeing savings
Putting aside the issue of whether the plans were marketed as GSP, the PSC was still concerned with the offering, however
The PSC said, "Commission is concerned that Mpower
unilaterally offered this 'friends and family' discount to
certain customers without receiving approval to do so. ESCOs
like Mpower are only authorized to offer certain Commission-approved products that ESCOs submit to Staff for review. Staff
only learned of Mpower’s 'unique' product offering for the first
time during its GSP audit".
In summary, the PSC found that Mpower’s responses to prior orders to show cause, "either did not
effectively dispute the contentions put forth therein, are
legally or factually unpersuasive, or were not timely submitted."
The PSC further found that, "Mpower’s pattern of
behavior is indicative, at a minimum, of insufficient internal
compliance practices for mass market customers and disregard for
consumer protections."
The PSC specifically found that Mpower:
1) Violated the December 2019 Order by failing to transition
customers to compliant contracts (OTSC 1);
2) Violated UBP Section 2.5.b by failing to honor the terms
of a sales agreement that committed the Company to
purchase a specified percentage of RECs (OTSC 1);
3) Violated UBP Section 5.B.5.d by failing to obtain
affirmative customer consent to transfer customers to a
compliant product (OTSC 1);
4) Violated the December 2019 Order by failing to comply
with EDP rules that required it to retire RECs to match
its load obligations (OTSC 1);
5) Violated the December 2019 Order by failing to transition
customers to compliant contracts a second time (OTSC 2);
6) Violated the December 2019 Order by failing to maintain
transparency of information and disclosures for customers
with respect to pricing and commodity sourcing (OTSC 2);
7) Violated UBP Section 2.B.1.a.vii by failing to disclose
any history of merger or acquisition activity in the 24
months preceding the date of its 2024 RAAF (OTSC 2); [the PSC's order devotes little time to this allegation, but this may potentially be related to finding #8 below, concerning an affiliation with Dira Realty]
8) Violated UBP Section 2.D.2 by failing to update its 2024
RAAF to disclose an affiliate to Staff (OTSC 2);
9) Violated UBP Section 2.D.4.a by failing to inform Staff
of any major changes in the information submitted in the
RAAF and/or application package to disclose the existence
of an affiliate (OTSC 2);
10) Violated UBP Section 4.B.1 by failing to obtain proper
customer consent for enrollments (OTSC 3);
11) Violated UBP Section 5.D.4 by failing to submit
enrollment requests after obtaining customer
authorization and providing corresponding sales
agreements to customers (OTSC 3);
12) Violated UBP Section 4.B.3 by failing to produce
requested sales agreements to Staff within five calendar
days of such a request (OTSC 3);
13) Violated the December 2019 Order by failing to
transition customers to compliant contracts a third time
(OTSC 3); and
14) Violated UBP Section 2.D.5.d by providing misleading
and inconsistent information to Staff regarding its GSP
(OTSC 3)
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.
Accordingly, the Commission has determined that the appropriate
consequence for these multiple instances of non-compliance is
revocation of Mpower’s eligibility to operate as an ESCO in New
York State."
The PSC ordered that Mpower shall return its customers to utility
supply service within 60 days
These transfers shall occur on the customers’ regularly
scheduled meter reading dates
Case 23-M-0287
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PSC Concerned With "Friends & Family" Discount Provided By ESCO; Only "PSC-Approved" Plans May Be Offered
September 22, 2026
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Copyright 2026 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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