New York PSC Staff Propose Requiring ESCOs To Use Standard Contract for Residential Customers, Would Also Standardize "Key Provisions" of C&I Contracts

Staff of the New York PSC have recommended that ESCOs be required to use standard contracts for residential service, and would introduce elements of standardization to non-residential contracts.

"Staff recommends that ESCOs be required to use a standard contract for energy commodity service for residential customers," Staff said.

Click here for Staff's proposed "Combined Residential Sales Agreement" standard contract (page 83), reflecting dual fuel service.

Staff's standard residential contract contemplates that the price may be fixed, variable, or indexed. However, for fixed products, it is unclear whether Staff is proposing a single term length.

The standard contract's language states that the term of a fixed contract is 12 months, but in discussing early termination fees, the standard contract states that, "the ETF will be no greater than $100 if the remaining term is less than 12 months and $200 if the remaining term is 12 months or more," implying terms longer than 12 months are acceptable.

Staff's standard contract, as written, also suggests that no guaranteed savings products will be permitted in the residential market, as the standard contract states, "This agreement offers no guaranteed savings."

Staff's proposal does not discuss how ESCOs may deviate from the language in the standard contract, such as by inserting the amount of guaranteed savings rather than a statement that savings are not guaranteed, where appropriate, but a prohibition on guaranteed savings products would conflict with the PSC's prior directive that low-income assistance program customers only be offered products which, "must guarantee that the customer will pay no more, on an annual basis, than the customer would have paid as a full service customer of the utility," or that offer energy-related value-added products or services

While Staff has only proposed a single standard contract for residential customers, its accompanying changes to the Uniform Business Practices suggest that the PSC could develop multiple standard contracts for residential service from which ESCOs could choose, as Staff's proposed changes to the UBPs provide, "ESCOs shall use standard contracts for residential customers to the extent approved by the Commission."

"In addition, Staff recommends development of specific standardized contract language for energy commodity services on key contract provisions for non-residential customers, including: pricing and early termination fees; consumer protections; and procedures applicable to address disputes," Staff said

These standard non-residential contract provisions would be explored in a subsequent phase of this proceeding, Staff said, and no specific non-residential standardized provisions were proposed at this time.

Case 15–M-0127