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N.Y. PSC: "Serious Consideration" of Municipal Aggregation Warranted, As Proceeding Opened

December 16, 2014

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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The New York PSC has opened a formal proceeding to consider enabling opt-out municipal aggregation programs (community choice aggregation) in New York.

"CCA programs can result in lower prices, more stable prices, and more attractive terms for customers due to the bargaining power that aggregation provides and the municipal or consultant experts who solicit offers and negotiate agreements. CCA programs also allow municipalities to set their own energy goals based on local input," the PSC said in its order opening the proceeding

"In addition, the scale and reduced marketing costs provided by aggregation may place downward pressure on commodity prices and provide retail customers with the opportunity to enjoy the same lower supply costs obtained by commercial customers," the PSC said.

The PSC noted that current statutory provisions appear to provide municipalities with all the authority necessary to establish and run CCA programs, and therefore, the only changes needed to implement opt-out municipal aggregation would be changes to the Uniform Business Practices, such as changes to enrollment and customer information rules.

A Staff white paper issued by the PSC added that, "In some ways, CCA customers will benefit from increased levels of oversight as compared to other customers in the retail market. Experts working for a municipality will review bids to ensure they are legitimate and contain no hidden risks or fees. Customers also retain the ultimate ability to return to distribution utility supply service or to participate individually in the retail market."

Among other things, the PSC sought comment on the following questions:

Should non-residential customers who are not served by ESCOs be included in CCA programs on an opt-out basis? If not, should they be included on an opt-in basis? Should any inclusion of small non-residential customers be based on the UBP definition of that phrase, or should municipalities be able to include a differently-defined group of non-residential customers in CCA?

Should customers already served by an ESCO be included in CCA programs? If so, how can they best be offered that opportunity? Some customers may be month-to-month under contracts with no termination fee or their contracts may be about to expire, and find the CCA contract offered attractive.

Should the program include a requirement that the primary price contained in a CCA contract begin below a certain benchmark?

Should the Commission require that CCA contracts contain a fixed price for at least a certain minimum period?

Is twenty days an adequate period within which a customer can opt out to avoid automatic enrollment in CCA?

Is one opt-out notification sufficient or should multiple notifications be required?

Should the Commission permit the presence in CCA contracts of cancellation fees for customers who do not opt out during the opt-out period and later wish to leave the CCA program?

Should municipalities be required or requested to provide to Staff for approval or review copies of communications that would be distributed to customers regarding the CCA program and the contract selected, in addition to Staff’s continued review of ESCO communications to customers?

Case 14-M-0224

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