By: Meghan Boland, Esq.

In another step aimed at ramping up customer protections, the New York State Public Service Commission (PSC) has issued an Order on Rehearing and Providing Clarification (Rehearing Order) as a follow up to the September 15 regular session of the PSC denying rehearing requests of its July order prohibiting ESCO service to Assistance Program Participant (APP) customers, and also established a process for considering the duration of the moratorium, and conditions for lifting the moratorium.

The utility will not de-enroll the customer when it places the block on the account. Rather, the block will prevent the customer from re-enrolling or switching to another ESCO during the existing contract as well as after its expiration. ESCOs will be responsible for de-enrollment once the ESCO agreement expires. For example, a variable rate agreement with a set term would expire at the end of the term, not on the date at which the account becomes blocked.^[1] However, only those gift-term agreements that were in effect prior to the implementation of the moratorium on September 13, 2016 will be permitted to continue until the expiration of the gift term.^[2]

The PSC stressed that it did follow the correct legal process in adopting the moratorium, but that to “avoid needless litigation over SAPA” it would file an emergency SAPA notice.[3] The moratorium will continue for a period of 90 days from the day it is filed with the Secretary of State. Note– the notice has not yet been filed with the Secretary of State.

During the comment period, parties may address the duration of the moratorium, and conditions for lifting the moratorium. Then, at the end of the 90-day period, the PSC will then consider whether to adopt the moratorium permanently, to lift it, or otherwise alter the moratorium.

In an attempt to clarify the scope of the moratorium, the Order stated that APPs have been defined as any customer who is enrolled in a utility low-income program. Generally speaking, if a customer is enrolled in the Home Energy Assistance Program (HEAP), he or she is enrolled in the utility low-income program. Enrollment in the low-income program is automatic and updated when customers come off of assistance. The list will be updated on a monthly basis.[4]

In the Rehearing Order, the PSC defended the moratorium on the basis that ESCOs could neither guarantee that APP customers would pay less than he or she would pay the utility, nor offer ERVAS that would reduce the customer’s overall energy bill. The PSC noted that several ESCOs stated that they had “neither the ability nor the desire” to guarantee savings against the utility and that recent data demonstrates that mass market customers pay “significantly” more for ESCO service than they would under the utility:[5]

Financial assistance programs that benefit utility such as HEAP are funded by all taxpayers…these programs are augmented by low-income assistance programs administered by the utilities, which are funded by all ratepayers. These significant ratepayer and tax funds are merely passed through to ESCOs for comparatively higher-priced has and electricity, without any corresponding value to APPs.[6]

The Rehearing Order also addressed the overarching question of what constitutes a qualifying ERVAS and clarified that the threshold for an APP EVRAS is different than that of ERVAS for typical mass market consumers. The PSC clarified that “[w]hile serving an APP, the ERVAS must be designed to reduce a customer’s overall energy bill and not diminish the value of the financial assistance programs provided to the APP.”[7]Finally, the Rehearing Order clarified that APPs may not opt out of the moratorium, but should the customer no longer be an APP, he or she will have the block removed from his or her account and will then be eligible for ESCO service again.[8] When an enrollment is rejected due to a block on the account, the ESCO will be provided with the code “CAB” for “Customer Account Blocked.”[9] No other information regarding the reason for the block will be provided.

You can read more about the Order here and here.

For more information, please contact us at info@feller.law.

[1] CASE 12-M-0476 et al., Order on Rehearing and Providing Clarification (Issued and Effective Sept. 19, 2016), at 24.

[2] Id., at 25.

[3] Id., at 4.

[4] Id., at 26.

[5] Id., at 5-6.

[6] Id., at 16.

[7] Id., at 15.

[8] Id., at 17.

[9] Id., at 22.