Relates to energy services companies; authorizes ESCO's to only enroll new or renew existing residential or small non-residential customers in gas or electric service if certain conditions are met.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A878
SPONSOR: Paulin TITLE OF BILL:
An act to amend the public service law, in relation to energy services
companies
PURPOSE:
To codify the PSC rule relating to selling electricity or natural gas to
residential customers.
SUMMARY OF PROVISIONS:
Section one adds a new section 66-s to the public service law to provide
that energy services companies ("ESCOs") shall only enroll new or renew
existing residential or small non-residential customers in gas or elec-
tric service if at least one of the following conditions is met: (1) the
enrollment contract guarantees savings over the utility price; (2)
enrollment is for a fixed-rate commodity product, priced at no more than
5% greater than the trailing 12-month average utility supply rate; or
(3) enrollment is for a renewably sourced electric commodity product
that (a) has a renewable mix that is at least 50% greater than the ESCO'
s current Renewable Energy Standard obligation, and (b) the ESCO
complies with the Renewable Energy Standard locational and delivery
requirements when procuring Renewable Energy Credits or entering into
bilateral contracts for renewable commodity supply.
ESCOs shall be required to guarantee savings to all low-income custom-
ers. ESCOs shall receive affirmative consent from residential or small
non-residential customers prior to enrolling the customer into a
contract that provides renewable energy but does not guarantee savings.
ESCOs shall provide to customers a transparency of information and
disclosure statement with respect to pricing and commodity sourcing.
Such statement shall include calculations that show the price per kilo-
watt-hour the customer will pay and how that price compares with the
applicable default utility service price, the type of renewable energy
content in each product the ESCO offers and the percentage of renewable
electricity that will be advertised for that product. Such disclosure
statement shall be made publicly available on the ESCOs website.
The disclosure statement for each ESCO shall be made publicly available
on the PSC's website. Such disclosure statement shall include the rele-
vant facts established and the reason for allowing the ESCO to provide
energy services to low-income customers.
Enrollment contracts between ESCOs and a customer shall include a
customer notice statement in 14-point font. Such customer notice state-
ment shall disclose the calculation of what the customer would have paid
to the default utility and an assurance that the customer will be paying
no more than they would have paid to the default utility.
Section two provides the effective date.
JUSTIFICATION:
Pursuant to a 2019 Court of Appeals ruling, Energy Service Companies
(ESCOs) cannot sell electricity or natural gas to residential customers
unless they can meet or beat the price from the customer's traditional
utility, or unless the ESCO provides electricity from renewable sources.
In response to this ruling, the PSC adopted a new ESCO "reset" order in
December 2019. As of February 10, 2020, ESCOs shall not enroll new non-
low income residential customers for gas and/ or electric services
unless at least one of the following conditions is met: 1. Enrollment
includes guaranteed savings over the utility price, as reconciled on an
annual basis; 2. Enrollment is for a fixed- rate commodity product that
Is priced at no more than 5 % greater than the trailing 12-month average
utility supply rate; or 3. Enrollment is for a renewably sourced elec-
tric commodity product. The order also requires ESCOs to provide custom-
ers with a "transparency of information and disclosure" statement with
respect to pricing and commodity sourcing.
Enrolling low-income customers is generally prohibited pursuant to the
rule, unless the company obtains a waiver from the PSC and demonstrates
that they can guarantee savings to the customer. This legislation codi-
fies the 2019 PSC ESCO rule for non-low income and income customers. It
is necessary to ensure that we have strengthened protections in the law
for energy consumers, prevent unfair business practices, and increase
the accountability of ESCOs.
LEGISLATIVE HISTORY:
A3168 of 2023 and 2024, referred to energy.
A.10347 of 2022, referred to energy.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
878
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. PAULIN -- read once and referred to the Committee
on Energy
AN ACT to amend the public service law, in relation to energy services
companies
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The public service law is amended by adding a new section
2 66-x to read as follows:
3 § 66-x. Energy services companies. 1. Energy services companies or
4 "ESCO", as defined in paragraph (b) of subdivision one of section three
5 hundred forty-nine-d of the general business law, shall only enroll new
6 or renew existing residential or small non-residential customers in gas
7 or electric service if at least one of the following conditions is met:
8 (a) the enrollment contract guarantees savings over the utility price;
9 (b) enrollment is for a fixed-rate commodity product, priced at no
10 more than five percent greater than the trailing twelve-month average
11 utility supply rate; or
12 (c) enrollment is for a renewably sourced electric commodity product
13 that:
14 (i) has a renewable mix that is at least fifty percent greater than
15 the ESCO's current renewable energy standard obligation; and
16 (ii) the ESCO complies with the renewable energy standard locational
17 and delivery requirements when procuring renewable energy credits or
18 entering into bilateral contracts for renewable commodity supply.
19 2. An ESCO shall be required to guarantee savings to all low-income
20 customers. In order to provide service to a low-income customer, prior
21 to enrollment in a contract, an ESCO shall submit to the department a
22 description which includes, at minimum:
23 (a) a calculation of what the customer would have paid to the default
24 utility;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02950-01-5
A. 878 2
1 (b) an assurance that the customer will be paying no more than they
2 would have paid to the default utility; and
3 (c) a description of how the ESCO will comply with reporting require-
4 ments in accordance with subdivision five of this section, including a
5 process for the department or customer to verify compliance with the
6 provisions of this section.
7 3. An ESCO shall receive affirmative consent from residential or small
8 non-residential customers prior to enrolling the customer into a
9 contract that provides renewable energy but does not guarantee savings.
10 4. An ESCO shall provide to customers a transparency of information
11 and disclosure statement with respect to pricing and commodity sourcing.
12 Such statement shall include calculations that show the price per kilo-
13 watt-hour the customer will pay and how that price compares with the
14 applicable default utility service price, the type of renewable energy
15 content in each product the ESCO offers and the percentage of renewable
16 electricity that will be advertised for that product. Such disclosure
17 statement shall be made publicly available on the ESCO's website.
18 5. The disclosure statement for each ESCO shall be made publicly
19 available on the commission's website. Such disclosure statement shall
20 include the relevant facts established and the reason for allowing the
21 ESCO to provide energy services to low-income customers.
22 6. Enrollment contracts between an ESCO and a customer, pursuant to
23 subdivisions one and two of this section, shall include a customer
24 notice statement in fourteen-point font. Such customer notice statement
25 shall disclose the calculation of what the customer would have paid to
26 the default utility and an assurance that the customer will be paying no
27 more than they would have paid to the default utility.
28 § 2. This act shall take effect immediately.
