On February 6, 2015, the NYPSC issued revisions to retail market rules regarding both third party verification and service to low-income customers. These rule changes are likely to drive up the cost of doing business for energy marketers (“Energy Service Companies” or “ESCOs”) in New York State. Moreover, ESCOs must begin to implement procedures in order to comply with these new requirements on time.
The history of these changes dates back to February 25, 2014, in the NYPSC Order Taking Actions to Improve the Residential and Small Non-residential Retail Access Markets (“February Order”). The February Order revised the Uniform Business Practices (“UBP”), which set forth the NY rules on ESCO eligibility, customer enrollment, marketing standards, consumer protections, and other compliance requirements for ESCOs and utilities. Following the February Order, numerous parties requested changes and, on April 24, 2014 the NYPSC hit the pause button – delaying implementation of numerous controversial rule changes – until now.
Rule Changes Addressed in the February 6, 2015 Order
While several rule changes are still under review, two of the issues addressed in the February 6, 2015 include:
- Third Party Verification Rules Revamped. Going forward,third party verification (TPV) will be required for all telephonic and door-to-door sales, as well as some electronic enrollments that involve direct customer contact by the ESCO. ESCOs may use an Independent Third Party calling service or an Integrated Voice Response (“IVR”) system, which must be recorded without the ESCO marketer’s presence. The use of an IVR system was a subject of controversy in the proceeding. However, the NYPSC ultimately found that IVR can adequately protect consumer interests just as well as a live independent TPV. This new requirement also extends to “network” marketing (where a customer can become a representative and enroll others). The TPV script consists of numerous questions that customers must respond to in order to verify their identity, authorize information release, and confirm key terms of what they signed up for. ESCOs must comply with the revised TPV requirements, including the use of the revised TPV script outline, within 90 days of the issuance of the February 6, 2015 Order, or May 7, 2015.
- Changes to Terms of Service to Lower Income Customers. If an ESCO chooses to serve low income Assistance Program Participants (which ESCOs are not required to do), the ESCO must satisfy at least one of two conditions. The ESCO must guarantee that the customer will pay no more on an annual basis than the customer would have paid as a full service customer of the utility. Alternatively, the ESCO must provide Assistance Program Participants with energy-related value-added products or services. PSC Staff is going to hold a collaborative meeting before April 7, 2015 to determine what exactly is meant by “value-added products,” as well as determine the details of a mechanism that will allow ESCOs to quickly confirm whether a customer is an Assistance Program Participant. This Staff-led collaborative is required to submit a report of its proposals for PSC consideration within 180 days.
Rule Changes To Be Addressed In The Future
The following potential revisions remain stayed from April 24, 2014 and were not addressed in the February 6, 2015 order. These matters will be addressed in forthcoming orders by the PSC:
- In the event of termination for nonpayment where the customer owes more for service through an ESCO than what the customer would have owed for utility service, the option for the customer to pay the lesser amount to avoid having their service shut off.
- Requiring ESCOs to file quarterly historic prices for small non-residential customers with the PSC. (Currently, ESCOs must file these reports for all residential customers)
- Requiring ESCOs to post prices for small non-residential customers on the Power to Choose website every month, with a guarantee that these small non-residential customers will never be charged more than what was posted on the website when they signed up. (Currently, ESCOs must report these monthly prices for all residential customers)
- The requirement that utilities calculate and establish ESCO-specific Purchase of Receivables (POR) discount rates. This would require modifications to utilities’ customer information and billing systems and to utility billing services agreements.
Contact the attorneys at Feller Energy Law Group, PLLC if you have any questions at firstname.lastname@example.org. This proceeding is under NYPSC Case Number: 12-M-0476.
The filing deadline for FERC-566, the annual report of a public utility’s 20 largest customers, is due February 2, 2015. This requirement applies to all retail suppliers that hold FERC market-based rate authorization. Much to the dismay of retail suppliers, this public filing includes a requirement to publish a list that discloses valuable customer information – any company, firm, or organization that is one of the 20 largest retail purchasers during any one of the three preceding calendar years. Each of these 20 largest purchasers must also be notified that it is on the list. On December 18, FERC proposed a rule change that, if adopted, would release several categories of public utilities from the requirement to file Form 566. FERC is also proposing to make changes that could lower the cost of compliance, and limit disclosure requirements. These proposed changes will benefit retail suppliers who hold FERC authorization. Continue reading
How will demand response (“DR”) be compensated in wholesale energy markets under NY’s Reforming the Energy Vision (“REV”) initiative in the wake of the DC Circuit Court’s decision vacating Order 745, and how will the bulk system respond to cuts in peak demand with the growth of distributed energy generation (“DEG”)? How will FERC’s role change as regulation of DR migrates from federal to state jurisdiction? This article focuses on DR, and a follow up will be coming shortly on DEG in our ongoing series on REV. Continue reading
On November 20, FERC Enforcement announced the issuance of its annual report for fiscal year 2014. All market participants in the energy industry need to ensure that their ducks are in a row as FERC Enforcement is continuing its focus on fraud and market manipulation. Just over the last few months, FERC enforcement has been active in the power marketing industry. For example, on August 5, FERC’s issued a public notice of violations against Powhatan Energy Fund for allegedly manipulating PJM’s up-to congestion market. On August 25, FERC issued a notice of violation against City Power Marketing for allegedly manipulating PJM’s up-to congestion market. On September 29, FERC approved a settlement between DC Energy, LLC, Scylla Energy LLC and PJM regarding a dispute over the deviation charges applied to internal bilateral transactions. In addition, at the end of October FERC announced that it has opened three probes, one into the natural gas market and two generators that took advantage of uplift payments last winter.
Below are some highlights from FERC Enforcement’s annual report: Continue reading
Here Are Your 6 Top Stories This Week at FERC:
- FERC Revokes Market-Based Rate Authority for 26 Utilities
- PJM Updates Capacity Performance Proposal
- Proposal For Centralized Bilateral Natural Gas Market Exchange Gets Pushback
- NYPSC Takes FERC to Court Over New Capacity Zone
- FERC Launches Investigation into Market Manipulation
- ISO-NE Responds to NEPGA’s Winter Reliability Program Concerns
On October 20, the Court of Appeals for the DC Circuit issued a stay on its ruling to vacate Order 745. The stay will be in effect until December 16, which will give the Solicitor General and FERC time to issue a writ of certiorari to the Supreme Court. If the case goes to the Supreme Court, then Order 745 will remain in effect until a final ruling is issued on the matter. For a refresher on Order 745, which lays out FERC’s demand response program to compensate end-users for reducing their consumption in wholesale organized markets, see our previous blog post here.
In FERC’s request to the DC Circuit for a stay of its decision on Order 745, FERC indicated that it may petition the Supreme Court for review. There is currently a great deal of uncertainty on the scope of FERC’s jurisdiction between wholesale and retail markets. While policy professionals are working to resolve this jurisdictional conundrum, stakeholders are wading in a bath of market uncertainty. Continue reading
On October 9, FERC issued an order stating its intent to revoke market based rate authority from 43 companies that have failed to file their Electronic Quarterly Reports (EQRs). Unless all outstanding EQRs are filed for each of these companies, FERC will, within 15 days of the order, “revoke that public utility’s market-based rate authorization and will terminate its electric market-based rate tariff.” The bottom line is that FERC is ramping up its enforcement efforts across the board, and the entities listed below have until October 24 to get their EQRs up to date and save themselves from FERC’s blacklist. All retail electric providers (“REP”) and electric generation suppliers must be aware of what EQRs are. Losing market based rate authority can put an electric company, whether a REP or a supplier, out of business. Continue reading