New York ALJs Rule ESCO-Default Service Cost Comparison Shall Be Made Public

Two New York ALJs have ruled that a comparison of ESCO and utility costs provided by Niagara Mohawk in response to a discovery request shall not be afforded confidential treatment.

The decision may be appealed to the New York Public Service Commission Secretary, and the cost comparison and related documents must continue to be treated as confidential until 15 days after their entitlement to confidential treatment has been finally denied, or such later date as may be ordered by a court of competent jurisdiction.

As previously reported, NiMo's analysis provided a calculation of the total and average difference between the amount billed to shopping residential customers by the customer's ESCO and what the billing would have been under utility bundled service, for a 24 month period. The comparison did not include specific per kWh rates, and did not disclose the names of specific ESCOs (listing each supplier as "Supplier 1", etc).

The Retail Energy Supply Association had objected to the use of the information for this purpose, and the release of billing information to third parties, citing language under the NiMo billing services agreement (BSA) and the confidential nature of the underlying rates.

However, the ALJs found that the information for which ESCOs sought confidential protection is of a general nature and its disclosure is unlikely to cause competitive harm.

Moreover, "the general retail access policy of the Commission favors public disclosure of this type of information," the ALJs said.

"Even if a slight degree of competitive injury could be shown, it would be outweighed both by the general policy favoring disclosure and the Commission's specific policy favoring transparency in the retail access market," the ALJs ruled.

"Price transparency and price discovery were the goals of the Commission's [prior price reporting] directive. The same rationale applies to the disclosure of comparative analyses between those charges and utility commodity charges. The Commission noted in the Price Reporting Order that consumers should be encouraged to explore the retail marketplace. The comparative analyses contained in the IR [interrogatory] responses are consistent with the Commission's policy and may contribute to the transparency of the marketplace," the ALJs said.

Additionally, in a footnote, the ALJs noted that the Public Utility Law Project had argued that an ESCO essentially lacked standing to challenge the public disclosure of the information because the utility, having purchased the ESCO account receivable, owned the data (i.e. ESCO charges) that were utilized in conducting the comparative analysis. "This argument is also persuasive in contributing to our conclusion to deny RESA's request for confidential treatment of the information," the ALJs said.

The ALJs noted that the comparison neither identifies the ESCOs operating in NiMo's territory nor provides ESCO billing determinants, i.e. the per kilowatt hour charge of the ESCO. "In addition, it is not possible to deconstruct the comparison data provided by the Company in order to arrive at the billing determinants," the ALJs said.

"RESA's allegations of possible competitive injury are speculative at best and fail to meet the burden necessary to successfully obtain confidential treatment of the information," the ALJs continued. "Its claims, that release of the information is likely to cause significant competitive injury, are largely based on its characterization of the information as providing ESCO pricing, revenues, and numbers of customers. Such information is not being provided in the Company's response to either PULP IR Nos. 91 or 107. Rather, the Company's responses provide blind lists of ESCOs, noted only by supplier numbers, information about whether the supplier serves customers in the Company's affordable program or low income discount program, and the total and monthly delta between what the Company billed on behalf of the ESCO and what it would have billed the customer for its own commodity service."

"The general information provided by the Company is unlikely to provide individual competitors with a possible competitive advantage and it is unlikely to cause significant competitive injury to any specific ESCO. The information, for example, provided in response to PULP IR No. 107 shows a significant variation among suppliers in the total and average deltas; no uniform market strategy or pricing pattern is revealed. Even if a pricing pattern or market strategy could be discerned, it is questionable if such information would prove useful to competitors ... [because] ESCOs might offer a variety of pricing products and services, and it is impossible for competitors to obtain any insight into those types of pricing offers from the Company's responses to the interrogatories," the ALJs said.

Case 12-E-0201 et. al.