New York PSC Issues Show Cause Order To ESCO

November 27, 2023

Email This Story
Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com

The New York PSC ordered Mpower Energy LLC (Mpower) to show cause why its eligibility to act as an Energy Services Company (ESCO) in New York State should not be revoked or, alternatively, why other consequences as set forth in the Commissions UBP should not be imposed, due to Mpower's alleged offering of non-compliant contracts to mass market customers, and related allegations

The PSC alleged that, during an investigation by Department of Public Service Staff (Staff), Staff identified information that Mpower Energy:

1) "Apparently failed to transition customers to compliant contracts following the effective date of the December 2019 Order [mass market limits order];"

2) "Apparently violated UBP Section 2.5.b by failing to honor the terms of its sales agreement to purchase a specified percentage of Renewable Energy Credits (RECs);"

3) "Apparently violated UBP Section 5.B.5.d by failing to obtain affirmative customer consent to transfer customers to a compliant product; and,"

4) "Apparently violated the December 2019 Order by failing to follow the Environmental Disclosure Label Program (EDP) rules to retire RECs to match its renewable load obligations."

The PSC noted that the allegations are based on Staff’s investigation to date; they do not constitute final findings or conclusions by the Commission, and Mpower will have an opportunity to respond to the allegations

The PSC said, "Consistent with the Commission’s December 2019 Order, any ESCO customers enrolled on a month-to-month contract, including those enrolled on a renewable fixed-term contract that shifted to a month-to-month contract at the expiration of the contract term, were required to be served via a compliant renewable product upon renewable or expiration of the agreement."

The PSC alleged, "The Commission notes that Mpower Energy acknowledged in a letter to Staff dated May 19, 2022, '[b]y the time the Reset Order became effective, the fixed-rate period of Mpower’s contracts had already expired.' Mpower Energy also acknowledged in its response to a Notice of Apparent Violation (NOAV), dated May 19, 2023, that 'many of Mpower’s customers were enrolled in continuous contracts at the time the [December 2019] Reset Order was implemented. As such, those contracts did not renew after the Reset Order took effect and were still enrolled in products requiring Mpower to match usage with national RECs, which Mpower purchased and retired to meet its 2021 compliance obligations.'"

The PSC alleged, "Staff contends that Mpower Energy failed to honor the terms of its contracts with customers by not purchasing the amount of renewable energy specified in its own sales agreements. Staff analyzed Mpower’s customer contracts, which apparently require a 100% match of its customer load obligations with RECs."

The PSC alleged, "Mpower Energy ... submitted ... data explaining that it apparently misunderstood the renewable product requirements of the December 2019 Order. Mpower Energy contended to Staff that because it offered customers a renewable product that was paired with a home warranty product, MPower was exempt from supporting its renewable load with compliant REC purchases. Mpower Energy further claimed it committed to match 50% of its load obligation with EDP compliant RECs and the remaining 50% with nationally sourced RECs."

The PSC alleged, "Staff contends that Mpower Energy was obligated to purchase RECs based on the terms and conditions it established in its own contract language. As such, Staff further alleges the Mpower failed to comply with its own customer contracts by not purchasing and appropriately retiring compliant RECs to cover 100% of its renewable load, as represented and guaranteed by Mpower through its contracts."

The PSC alleged, "Furthermore, in a letter submitted to Staff dated December 14, 2022, Mpower Energy asserted each 'customer was on a renewable energy plan at the time of enrollment, and the nature of the product has not changed. Thus, we have agreed to pay the cost of ACPs (Alternative Compliance Payments) for 50% greater than the ESCOs current Renewable Energy Standard (RES) obligation without passing this cost onto the customer. We believe that this is not a material change requiring affirmative consent since the only change relates to sourcing of the RECs.' Staff alleges that Mpower Energy apparently failed to retire RECs in its EDP subaccount in NYGATS matching 100% of its contractual load to customers. Therefore, at this juncture, sufficiently credible information exists to demonstrate that Mpower Energy apparently violated UBP Section 2.5.b by failing to 'adhere to the policies and procedures described in its Sales Agreement.'"

The PSC alleged, "The Staff’s investigation also uncovered credible information that Mpower Energy did not obtain customer consent to move certain of its pre-2020 customers (or legacy customers) to a renewable product following the December 2019 Order. Department Staff alleges that three customers being served by Mpower Energy were originally enrolled on a standard electric product without a renewable component."

The PSC alleged, "Staff alleges that ESCOs cannot unilaterally elect to shift customers to a renewable product without the customer’s affirmative consent to participate in a renewable energy product. Transferring a customer to a renewable energy product would constitute a 'material change' under the UBP; if such a change is made without affirmative customer consent, it could constitute an apparent violation of the UBP Section 5.B.5.d."

The PSC alleged, "Staff contends that Mpower Energy marketed, and contracted to provide, its customers a 100% renewable product, but it appears that it failed to adhere to the December 2019 Order which requires 'all voluntary renewable electricity purchases made by ESCOs will be subject to the same location and delivery requirements as Tier-1-eligible REC purchases.'"

The PSC alleged, "In its explanation to Staff, Mpower Energy apparently admitted that it retired its renewable load for 2021 load obligations in the Pennsylvania-New Jersey-Maryland Interconnection tracking system. After further review, Department Staff apparently discovered that MPower Energy allegedly: (1) retired RECs in the wrong vintage year; (2) retired RECs under an inappropriate fuel type; and (3) the RECs that were retired were not generated in New York State, nor properly imported into the State."

Case 23-M-0287

ADVERTISEMENT

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Customer Care Specialist I & II- remote/hybrid -- Retail Supplier
• NEW! -- Pricing Analyst - Retail Power
• NEW! -- Electricity Pricing Analyst -- Retail Supplier
• Business Development Manager -- Retail Supplier
• Call Center Manager -- Retail Supplier

HOME

Copyright 2010-23 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.