Commissioner: New York PSC Punts On Green Gas ESCO Product Issue

The New York PSC considered today an order related to its review and reset of the state's retail energy market

A written order was not immediately available, but the order is presumably an order on rehearing and/or clarification. An update and further story will be posted when an order is issued.

In a discussion of the draft order that was before Commissioners for consideration, Commissioner Diane X. Burman said that the order punts on the issue of ESCOs being authorized to supply customers with renewable natural gas without being subject to the pricing limits otherwise required by the PSC's December 2019 reset order.

As previously reported (see specific details here), the PSC in December 2019 adopted various product and pricing limits for ESCO service to mass market customers. Under the December 2019 order, ESCOs are limited to offering mass market customers: (1) a guaranteed savings (versus the utility) plan, (2) a fixed rate product that is limited in price to a 12-month trailing average utility supply rate plus a 5% premium, or (3) for electricity only, a 50% (above the minimum RPS) renewable plan that meets deliverability and other requirements in the order.

As previously noted, the December 2019 order did not authorize any type of renewable natural gas plan that would not be subject to the pricing limits described above and that would be analogous to the authorized renewable electricity product

Burman encouraged the PSC to address the issue of ESCO renewable natural gas plans in the next phase of the proceeding

Burman also suggested that, in the ESCO context, the PSC examine the impact, including the fiscal impact, of COVID-19 on ESCOs and customers.

Separately, the PSC released an Environmental Assessment Form (EAF) relating to reforms to the retail energy market. The EAF, with a signature date of September 15, was labeled on the PSC's online docket site as, "ESCO Rehearing EAF signed", though the term rehearing was not used in the EAF itself.

Notably, the EAF discusses the PSC's decision not to authorize ESCO renewable natural gas plans as a category of plans not subject to the ESCO pricing limits

Specifically, the EAF states, "The proposed action would require energy service companies (ESCOs) to enroll new residential or small non-residential customers (collectively, mass-market customers) and renew existing mass-market customer contracts for gas and/or electric service on products that satisfy at least one of the following conditions: (1) enrollment includes a guaranteed savings over the utility price, as reconciled on an annual basis; (2) enrollment is for a fixed-rate commodity product that is priced at no more than 5% greater than the trailing 12-month average utility supply rate; (3) enrollment is for a renewably sourced electric commodity product that (a) has a renewable mix that is at least 50% greater than the ESCO's current Renewable Energy Standard (RES) obligation as demonstrated by the procurement of Renewable Energy Credits (RECs) and/or the making of Alternative Compliance Payments (ACPs), (b) the ESCO complies with the RES locational and delivery requirements when procuring RECs, and (c) there is transparency of information and disclosures provided to the customer with respect to pricing and commodity sourcing; or (4) enrollment is for a product or service otherwise expressly authorized by the Public Service Commission. With the goal of increased consumer protection, this action would prohibit an ESCO product that does not satisfy at least one of these conditions. While this action may reduce ESCO product offerings such as 'green gas' products and other home energy management tools, the extensive administrative record before the Commission demonstrates that there is no significant penetration of 'green gas' products in New York or show that consumers are unable to easily acquire the same home energy management tools from other common retail sources unbundled from commodity service."

"Additionally, no significant adverse environmental impacts will result from the requirement that ESCOs offering renewable commodity products comply with the RES locational and delivery requirements when procuring RECs. This requirement would increase transparency into ESCO renewable product offerings and ensure that customers are receiving what they are paying for. It will also ensure that the sale of renewable commodity products to New York customers will result in verifiable renewable generation that is delivered into New York," the EAF states

Case 15-M-0127 et al.