State Ends Retail Supplier Customer Referral Programs

The New York PSC has ordered the utilities to cease offering ESCO referral programs, as part of its retail markets order.

"When these programs were established, they were explicitly conceived of as an interim, near-term strategy to expand the market. The programs appear to have outlived their usefulness," the PSC said.

"[W]e have found that the vast majority of mass market ESCO customers experience higher bills than they would have as full service utility customers and the programs have provided little or no competitive pressure or other value-added benefits to these retail markets. Under these circumstances, we will not continue to endorse these referral programs, which, as structured, create an expectation that the customer will save money in comparison to what they would have paid the utility," the PSC said.

"Accordingly, utilities should cease their ESCO referral programs within 60 days of issuance of this Order. We may reconsider the use of ESCO referral programs in the future, if new circumstances suggest such programs will bring benefits to consumers and the market in general. We may also consider re-designed referral programs to encourage the availability and use of energy related value-added services," the PSC said.

See our related story today for discussion of the PSC's consideration of potential alternative customer referral programs to support enrollment on value-added ESCO products.

The PSC said utilities shall continue to inform new and moving residential and small business customers of their option to select an ESCO and how to obtain information on ESCO products.

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Case 12-M-0476