Nine Out of 10 New ConEd Customers Decline to Use ESCO Referral Program

Nearly nine out of 10 small volume customers initiating service with Consolidated Edison decline to participate in the PowerMove ESCO referral program, according to a status report filed by ConEd (07-E-0523).

The PowerMove referral program was expanded to include customers initiating electric or gas service on April 27, 2011. ConEd's PowerMove program allows the customer to be randomly assigned to a participating ESCO offering a standard 7% discount off of the utility's price for energy supply for a period of 65 calendar days, or to select an ESCO offering the referral product themselves.

Specifically, PowerMove is offered by ConEd's customer service representatives to residential and small non-residential electric service applicants and all firm service gas service applicants in connection with initiating service, with the exception of retroactive service initiations with an effective date for the service more than ten calendar days before the date of the call.

From April 27, 2011 through October 26, 2011, ConEd said that 220,000 new small volume service requests eligible for PowerMove were received. Of that amount, only 27,500 customers, or 12.3%, elected to take service from an ESCO under the PowerMove referral program.

On an annual basis, ConEd said that it receives about 450,000 calls for small volume service initiation.

ConEd also reported the amount of deferred labor expenses associated with expanding PowerMove to service initiation calls (with such costs reflecting increased time per call and need for additional representatives). The PSC previously ordered these labor costs to be deferred, rather than paid by participating ESCOs at the time of program expansion. ESCOs previously paid implementation costs of expanding PowerMove apart from the incremental labor costs related to customer service representatives.

ConEd is seeking to recover the deferred labor expenses, plus ongoing labor expenses, from ESCOs.

The deferred labor costs total approximately $315,000 through October 2011 and are expected to be about $420,000 through December 31, 2011. In addition, the ConEd estimates that the incremental labor costs for 2012 will total approximately $625,000.

If ESCOs decline to fund the labor costs associated with the customer service reps, ConEd asked the PSC for authorization to abandon expanded PowerMove and no longer offer the program to new customers.

Because the expanded PowerMove program relates to both gas and electric service, ConEd plans to allocate labor costs among the ESCOs, based on whether the ESCO is a single-service or dual-service provider, with the dual-service provider paying twice the amount assessed to a single-service provider.

ConEd will continue to require new ESCOs that want to participate in the PowerMove program to pay a one-time fee of $2,040 per service that equals the amount paid by the initial ESCO participants for system implementation costs.

The one-time fee collected from new ESCOs who join the Expanded PowerMove program will be used to offset labor costs in the following year for all ESCOs.