Seven days left until the New York Public Service Commission’s (“Commission”) February 23 Order is implemented. The Order, which is premised on protecting mass market consumers, will place unprecedented limitations on ESCOs – far beyond what is required to protect mass market consumers.  Among other things, the Commission has directed:

• Deep restrictions on commodity only products (natural gas and electric) by restricting ESCOs to two product offerings:  Guarantee a price that beats the utility, or 30% renewable product.
• Imposes a “One strike and you may be out” policy for non-compliance with UBP.
• ESCOs servicing mass market electric and natural gas customers on month-to-month variable rate products must return these customers to default service, or “enroll” the customers onto a compliant product.
• The CEO or equivalent officer of an ESCO must certify to the PSC that it will comply with the “conditions of the Order” by March 4, 2106.

The Commission’s position is clear; its deep concern over consumer protection has trumped retail choice. The heightened eligibility requirements and stricter enforcement measures will unquestionably achieve the Commission’s objectives of “protecting the interests of existing and future consumers, and ensuring consumer confidence in retail energy markets.” But the Commission goes further – among other things – restricting product offerings in a manner that will decimate the industry.

Did the Commission go too far, too quickly, without notice or opportunity to comment?

How can a Company Officer certify compliance with rules that are not clear and implement requirements it does not comprehend within a short ten-day time frame? There is too many unknowns. For example, with respect to the product offering requirements:
• How can an ESCO guarantee it will beat the utility price if utility prices are not known in advance?
• If utilities have certain privileges, such as the ability to recover losses from consumers in subsequent years, how can ESCOs  compete and guarantee savings?  How uneven is this playing field? It is an unworkable model to require ESCOs to set aside an unknown dollar amount for reimbursing customers for the balance at the end of the service terms, as the Commission directs.
• Are there sufficient renewable generation resources available to meet demand at fair prices?
• Without any information on a renewable gas product, is the only option for natural gas suppliers to guarantee its price will beat the utility price?
• What constitutes a “value-added service” and how will its worth be calculated?

It is our hope that the Commission will be open to working with ESCOs and allow for industry input towards a better marketplace.  Feller Energy Law Group is interested in hearing your viewpoints, questions and concerns. Email us at info@fellerenergylaw.com to share your thoughts or for more information.