Surprise! N.Y. Low-Income Moratorium Not Applicable To Opt-Out Municipal Aggregations

The New York's PSC's new moratorium on ESCOs serving customers participating in utility low-income assistance programs (Assistance Program Participant, or APP) bizarrely does not apply to opt-out municipal aggregations, the PSC's written order confirms

"This moratorium will not extend to APPs participating in a Community Choice Aggregation (CCA) Program. The appropriate consumer protections for participants in a CCA program, including APPs, are provided in the Commission’s Order Authorizing Framework for Community Choice Aggregation Opt-Out Program, issued April 21, 2016 in Case 14-M-0224," the PSC said

In other words, the PSC is extending the protection of the moratorium on a discriminatory basis, with only customers fortunate enough to not live in an opt-out municipality having the protections of the moratorium.

Moreover, the PSC has now created this incongruous dichotomy:

• APP customers who have affirmatively selected an ESCO service, either for savings, rate stability, or value-added services, will be denied the ability to continue such service

• APP customers in opt-out aggregations, who have never affirmatively chosen ESCO service, and may not even be aware they have been switched to an ESCO, may be served at a rate which is not subject to any price or other protection (e.g. no guaranteed savings or value-add requirement). Given many municipalities are eager to include premium-priced renewable content in their products, low-income customers may end up paying more under the PSC's decision. Furthermore, if the concern driving the moratorium is that low-income customers, due to their unfamiliarity with ESCO service (regardless of how they were enrolled, individually or via aggregation), are unlikely to recognize that they are paying more under ESCO service, low-income customers could very well become a de facto captive "slush fund" to fund municipal aggregations' pet projects, as more sophisticated customers residing in the aggregation territory, seeing the divergence in aggregation and default service rates, opt out