PSC Considering “Consequences” for Alleged Violation by Five ESCOs of PSC “Uniform Business Practices”

The New York Public Service Commission commenced new proceedings against five “Energy Services Companies” (ESCOs) for alleged violation of the Commission-issued “Uniform Business Practices” relating to the interaction between distribution utilities and ESCOs providing alternative providers of utility service. ESCOs generally charge considerably more for their service, after brief introductory “teaser” rates, and have drawn a disproportionate number of customer complaints.  See generally, WILL THE NEW YORK PSC ASSURE JUST AND REASONABLE ESCO SERVICE

The ESCOs and PSC online case files are

  • Light Power & Gas, LLC, PSC Case 15-M-0259
  • Spectrum Gas & Electric, LLC, Case 15-M-0260
  • National Power & Gas, Inc., PSC Case 15-M-0261
  • Ipsum Solutions, Inc., PSC Case 15-M-0262
  • Engineered Energy Solutions, LLC, PSC Case 15-M-0263

Apparently, alleged ESCO violations of the “Uniform Business Practices” in the listed cases prompted the PSC to seek to impose unspecified “consequences.”  There are currently no papers publicly filed in the cases opened by the PSC, and there is no indication as to the nature of the alleged violations.

The “consequences” referenced in the case titles might involve the actual or threatened revocation of an ESCO’s ability to provide alternative energy services to customers.  The Commission may revoke staff-issued “eligibility” determinations, which are needed before utilities will provide the  services necessary to enable ESCOs to market and bill for their alternative energy commodity contracts with customers.  Presumably, ESCOs would have a due process right to a hearing prior to agency action if they contest a termination of eligibility.

The ESCOs in the new cases, however, may not be actively taking new customers at this time.  They are not listed as

The PSC apparently is not seeking to impose potentially stiff monetary penalties against the ESCOs, their officers, agents or employees under Public Service Law 25, which provides in pertinent part:

25.1. Every public utility company, corporation or person and the officers, agents and employees thereof shall obey and comply with every provision of this chapter and every order or regulation adopted under authority of this chapter so long as the same shall be in force.

2. Any public utility company, corporation or person and the officers, agents and employees thereof that knowingly fails or neglects to obey or comply with a provision of this chapter or an order adopted under authority of this chapter so long as the same shall be in force, shall forfeit to the people of the state of New York a sum not exceeding one hundred thousand dollars constituting a civil penalty for each and every offense and, in the case of a continuing violation, each day shall be deemed a separate and distinct offense.

By its terms, Section 25 penalties apply only to violations of the Public Service Law, official regulations of the Public Service Commission, and violation of decretal provisions of PSC Orders. The Order adopting the “Uniform Business Practices at page 18 not only directs the traditional utilities to include them in their tariffs, but also orders the ESCOs to obey the “Uniform Business Practices.”  Thus, a statutory monetary penalty might be levied in cases where an ESCO breaches the “Uniform Business Practices.”  On the other hand, ESCOs might argue that a “business practice” with which they allegedly did not comply has no binding force because it is not an official rule of the PSC published in NYCRR under Executive Law 102.



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