Friday, March 28, 2008

ESCO Marketing Practices Subject of New PSC Proceeding

The Consumer Protection Board and the New York City Department of Consumer Affairs filed a Petition, supported by PULP in its Comments, seeking Public Service Commission action regarding the marketing practices of some Energy Services Companies (ESCOs). See PULP Files Comments on Regulation of ESCO Sales Practices.

On March 19, 2008, in response to the Petition, the Commission issued a Notice Soliciting Comments on Revisions to the Uniform Business Practices soliciting public input on standards to govern ESCO Energy Service Company marketing practices.

The Commission stated it is considering whether to modify its Uniform Business Practices (UBPs). The Commission issued the UBPs instead of official regulations after the Commission allowed ESCOs to sell portions of natural gas and electric service. The Commission has made the UBP standards part of the tariffs of distribution service utilities. These UBP modifications could, according to the Commission

  • incorporate standards for marketing by ESCOs and third party contractors acting on their behalf;
  • improve residential customer protections;
  • strengthen the oversight of and expand the remedies available to Staff and the Commission; and,
  • other related matters and housekeeping items.

In addition, the Commission invited comment on the following questions:

  • Should the ESCOs be subject to the utility assessments provided by PSL §18-a?
  • Should the customer of record be the only person qualified to enroll the residential account with an ESCO?
  • Should early termination fees for residential customers be limited to: (a) a flat amount (e.g.$200); (b) an amount based upon a set fee per month multiplied by the number of monthsremaining on the contract (e.g. $8 x 20 months = $160); or (c) some other variation?
  • Should there be a grace period for the application of early termination fees to residential customers, and if so, what is the appropriate length of time for the grace period?
  • Is the number of Customers served by an ESCO proprietary trade secret information, under the standards set forth in the State Freedom of Information Law?
  • Should the UBP provisions with respect to Marketing Standards be applicable to small commercial customers? If so, how should small commercial customers be defined?
  • Should ESCOs that include early termination fees in residential sales agreements be requiredto obtain a “wet” signature on the sales agreement?
  • How often do ESCOs enforce early termination fees for residential contracts? If available,fixed and variable price contracts. the Commission seeks this information on an annual basis separated by contract types, e.g.
  • How should the term “plain language” as used in Section 2.B.1.b of the UBP be defined?
  • Are there additional modifications to the UBP that should be considered?

Comments are due by April 18th.

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