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September 6, 2016 in Alternative Energy by

Forced Disclosure Demonstrates Low-Income ESCO Customers Pay More

By: Meghan Boland, Esq.

Citing average ESCO cost data made public by the utility under discovery, the Public Utility Law Project (PULP) asserts that the vast majority of low income customers obtaining their supply from an ESCO at National Fuel Gas Distribution (NFGD) in New York paid more than they would have if they had purchased it from the utility.
Specifically, PULP stated that “more than half of the gas volume ESCOs supplied to the Company’s low income customers during the period in question was priced at least 44.6% higher than gas supplied by the Company.”

Last week, an administrative law judge (ALJ) ruled that certain aggregate ESCO cost data, including the information described above, must be produced by NFGD in response to discovery requests by consumer advocates in a current NFGD rate case (Case 16-G-0257). The Public Utility Law Project has since used that information to publish its own data comparing prices of utilities with that of third party energy suppliers. This ruling is significant because it opens the door to PULP – and potentially other parties – seeking similar data from all the utilities. It also is part of a regulatory landscape that is increasingly skeptical of third party retail energy suppliers.

The ruling came in response to an August 10 motion submitted by the National Energy Marketers Association (NEMA) to strike certain information requests (IR) served by PULP on National Fuel Gas Distribution. On August 12 and 22, NEMA made additional similar motions, although later withdrew some of its requests.
In ruling against NEMA’s request to keep such information confidential, the ALJ noted that PULP was not seeking information that would reveal specific ESCOs by name or the individual rates but that it was seeking to determine “whether low income funds might be better allocated to better inform customers about the availability of ESCO supply service where the aggregated data may show that ESCO supply offers low income customers better prices or services relative to NFGD’s bundled service.”

The information at issue, and which now must be produced, is essentially an aggregate of ESCO charges billed to customers for supply, which will likely be compared to the default service cost.
Additionally, the ALJ cited previous cases where similar information was requested. Noting that “the issues involved in NEMA’s objections are neither unique, nor ones of first impression” he cited to the Niagara Mohawk Power Corporation d/b/a National Grid’s 2012 electric and gas rate cases (12-E-0201 and 12-G-0202), where the Retail Energy Supply Association (RESA) made motions objecting to IRs that requested information similar to those under objection herein by NEMA. In the 2012 case, the ALJ held that the material sought was 1) relevant to the proceeding and thus discoverable, and 2) not withheld from public disclosure as a trade secret under Public Officer’s Law 87(2)(d) and 16 NYCRR 6-1.3.
Thus, while NEMA objected to certain portions of the IRs served on NFGD, on trade secret and relevance grounds, the ALJ noted that since trade secret status was previously denied for similar aggregate data, the ESCO cost data should be required to be produced in this matter as well.

As in the 2012 case, the ALJ ruled that individual ESCO names shall not be identified or associated with the charges, ESCO names must be redacted.
This information release comes on the heels of the Commission’s Order Regarding the Provision of Service to Low-Income Customers by Energy Service Companies (Case 12-M-0476 et al.) which established a moratorium on energy service company (“ESCO”) enrollments and renewals of assistance program participants.

For more information, please contact Feller Energy Law Group at