New York Bans Teaser Rates from Power to Choose; Requires ESCOs to "Guarantee" Customers Pay No More Than Power to Choose Pricing, Expands Site to Small Commercial

New York electric and natural gas ESCOs will be required to "guarantee" their prices as listed on New York Power to Choose, including for small commercial service, which will be added to the site

Previously, New York Power to Choose prices were not required to be current, and were only required to be indicative of prices which were available as of the first day of the month.

Specifically, in the PSC's retail markets order, the PSC will require ESCOs, "to honor all rates posted on the Power to Choose website regardless of whether an ESCO chooses to update its prices only once every 30 days as required or more frequently."

"Residential and small non-residential customers who contact the ESCO to take service must be guaranteed to pay no more than the price posted on Power to Choose at that time for the product the consumer chooses to purchase," the PSC said.

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More specifically, the revised Uniform Business Practices provide, "At least once every thirty days, each ESCO serving residential and/or small non-residential customers must post a price for each product it offers to those customer classes (e.g., fixed-price, variable-price, renewable energy, with each type of value-added service, etc) on the Power to Choose website" (emphasis added)

This suggests that ESCOs must post on Power to Choose a price for all of its offers.

"Each ESCO must guarantee to charge new customers no more than the price of the ESCOs posted offers at the time of the customer's agreement for each product," the revised Uniform Business Practices provide.

"The price must be guaranteed for the term stated on Power to Choose. For example, if the product is a variable rate product where the price is recalculated monthly, then the ESCO must guarantee that the customer will pay no more than the price stated on the website at the time the customer requested service for the customer's first month of service from the ESCO," the PSC said.

Though not discussed in the body of the PSC's order, the redlined Uniform Business Practices adopted by the PSC ban the use of introductory or teaser rates on Power to Choose.

Specifically, the revised UBPs provide, "The posted prices shall not include any introductory, promotional or 'teaser' rate."

As intimated above, the PSC will expand the Power to Choose website to include small non-residential service. The requirement to honor prices posted on the Power to Choose website will include pricing for small non-residential customers as the website's functionality is expanded.

Case 12-M-0476