New York PSC Denies ESCO's Mass Market Eligibility Application, Forces ESCO To Cease Service To 5,000 Customers -- EnergyChoiceMatters.com

New York PSC Denies ESCO's Mass Market Eligibility Application, Forces ESCO To Cease Service To 5,000 Customers

Also Issues Show Cause Orders To Three ESCOs

March 16, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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The New York State Public Service Commission (Commission) today took action regarding four energy service companies, or ESCOs, operating in New York for what the PSC stated in a news release was, "failing to abide by New York’s strict rules and regulations to protect energy consumers"

Written orders were not yet available

The Commission denied SmartEnergy Holdings, LLC's application for eligibility to serve mass-market customers in New York State.

"The effect of this denial will require SmartEnergy to cease service to any and all of its nearly 5,000 residential and small commercial customers in New York State," the PSC said

The PSC had previously issued a show cause order to SmartEnergy concerning various allegations (see details here)

In a news release the PSC stated, "The reason for the denial was because SmartEnergy failed to disclose the fact that it was subject to regulatory sanctions in Ohio and Illinois. Every ESCO in New York must comply with Commission rules and orders, as well as the laws of other states, in order to maintain ESCO eligibility to operate in New York State. The Commission’s investigation found that SmartEnergy made false and misleading statements in its application, which is grounds for denying it permission to operate in New York. SmartEnergy serves customers statewide."

SmartEnergy provided the following statement concerning the matter:

"We have not been served with the PSC's order and cannot fully comment at this time. We vigorously disagree with the PSC's prior allegations in this proceeding, which we addressed fully in a response to the PSC. Today’s order is contrary to the Commission's letter dated March 4, 2022, confirming that the company's submissions were approved, and these submissions included disclosure of the Ohio and Illinois matters. Once the company receives the order, we will communicate with the PSC, and, if necessary, explore our legal options, which may include an appeal."
--- Statement from SmartEnergy

Previously, in a 2021 response to the show cause order, SmartEnergy had stated the following: "The Commission should decline to revoke SmartEnergy’s eligibility to serve customers as an energy services company ('ESCO') in the State of New York ... SmartEnergy’s responses in its application were based on the company and its [outside] Counsel [] fundamental misunderstanding of an unclear question, and not any intent to provide false information or mislead the Commission. SmartEnergy has repeatedly attempted to work in good faith with the Commission. SmartEnergy has proactively shared information regarding its business operations and marketing materials within the State of New York -- having made multiple modifications to its marketing materials and rate products in response to Staff requests. SmartEnergy seeks to continue to build a relationship with the Commission and its customers in the State of New York, and therefore respectfully requests the Commission permit SmartEnergy to continue to provide ESCO services."

The Commission also ordered Got Gas? LLC; Graystone Technologies, Inc.; and Liberty Power Holdings, LLC to show within 30 days why their eligibility to act as ESCOs in New York should not be revoked or why other consequences should not be imposed.

While a news release did not specifically link the following to any of the three ESCOs cited immediately above, the PSC's news release stated, "Every ESCO in New York must comply with the New York Uniform Business Practices guidelines and with all applicable orders from this Commission to maintain its eligibility to operate in New York. Among other requirements, ESCOs must file with the Secretary their annual compliance report by January 31 each year. Failure to comply with the rules could result in losing the ability to operate in New York."

In 2021, the PSC had said that neither Got Gas?, LLC nor Graystone Technologies, Inc. had customers in New York. As previously reported, Liberty Power Holdings was subject to a bankruptcy proceeding where some of its book was sold to NRG, while other customers were to be dropped to default service

"Our continuing efforts to improve the ESCO market remains a priority," said Commission Chair Rory M. Christian. "In instances where an ESCO chooses not to play by the rules, we prohibit their ability to enroll new customers and require them to cease operations in New York."

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