Retail Supplier "Pausing" Customers' Existing Fixed Rate Contracts, Raising Prices

Energy Cooperative of America, an ESCO, has informed certain New York business customers on fixed rates that it is "pausing" their current fixed rate contracts, and applying modified, higher rates during such pause, due to "price spikes" in the energy markets

In a June 15, 2022 letter to business customers obtained by News10 Rochester, Energy Cooperative of America states that the "pause" in the fixed rate will last until at least the end of the year.

While Energy Cooperative of America did not specifically discuss in the letter the nature of the new rate, Energy Cooperative of America states that it understands such action may cause stress on customers' budgets, indicating the replacement rate will be higher. One business customer told News10 Rochester that the pause raises the business's electric rate by at least 5%.

Energy Cooperative of America states in the letter that its action is needed to ensure the viability of the ESCO, and that the action is a, "last resort."

In the letter, Energy Cooperative of America states:

"As a member of the Energy Cooperative of America ('ECA') all of us share a responsibility to ensure the long-term success and stability of the organization. With that being said, the energy markets are under extreme pressure and the price spikes have made it impossible to continue our long-term contracts. During the last 6 months we have exhausted every possibility and a sizable portion of our reserves managing same.

"As a company with a fixed rate contract, we are notifying you that we will be pausing that contract effective immediately. We know that may cause stress on your budgets and organization, but we unfortunately have no other option given the need to protect the ongoing viability of ECA. We also will allow you to cancel your contract and search for another supplier if you so choose.

"If you accept the pause and retain your membership with ECA, we will extend term [sic] of your current contract by the number of months represented by the pause. Due to the current forward market pricing, this pause will extend until at least the end of the year, and possibly longer.

"Please realize that this was our last resort, and we value your membership. However, without this drastic move the ongoing viability of ECA would be compromised. In the last 5-6 months rates have moved an unprecedented amount and your firm or organization has experienced significant savings during this period."