Retailers Ask for Rehearing of NY Guaranteed Savings Order

By William Opalka – RTO Insider

Electricity retailers in New York on Friday asked for rehearing of an order that would overhaul retail customer choice in the state.

The Impacted ESCO Coalition and the National Energy Marketers Association separately asked for a rehearing of the New York Public Service Commission’s Feb. 23 order that mandated customer savings under most contracts (98-M-1343).

The order mandates that customers be guaranteed an electric rate lower than what their host utility offers, with the exception of “green” offerings that must include a minimum of 30% renewable energy. The commission said the order was intended to combat deceptive practices and boost consumer confidence. (See Zibelman: Rules Meant to Enable Markets.)

The retailers say the reforms were ill-considered and hastily enacted. “Contrary to well established commission policy and practice in support of the development of competitive retail markets, and without notice or meaningful opportunity to be heard, the February order adopted requirements for ESCO [energy service company] service to mass market customers, which would effectively shut down the market for the majority of ESCOs and their customers,” the NEMA wrote.

The PSC had required ESCOs begin compliance within 10 days, or March 3. However, a state court stayed the order, scheduling a show-cause hearing for April 14. (See Court Delays New York ‘Guaranteed Savings’ Rules.)

Among the complaints by the ESCOs is that the rules were enacted without adequate notice under the State Administrative Procedures Act and that the price guarantee is improper rate-setting by the PSC.

The NEMA also said the order amounts to an illegal taking of its members’ accounts. “All of the ESCOs that cannot comply with the order will be forced to give their hard-won customers, which the ESCOs incurred significant costs to acquire, to the competing monopoly utility. The utilities will unfairly acquire these ESCO customers for free,” it wrote.

“The improperly noticed rules represent a sweeping set of changes that threaten to destroy hundreds of businesses and affect millions of New York residents,” wrote attorneys for the IEC, which describes itself as representing “small to medium” ESCOs, many of whom who operate primarily in New York.