New York DPS Issues Notices Of Apparent Violation To Eight NRG Retail Suppliers, Alleging Service Under Non-Compliant Products

February 29, 2024

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 State Department of Public Service (Department) issued Notices Of Apparent Violation (Notices or NOAV) to eight ESCOs owned by NRG Energy, alleging that each ESCO served customers on non-compliant products after various effective dates of the retail market reset order

NOAVs were issued by the Department to Direct Energy Services LLC (Direct Energy), Energy Plus Holdings LLC (Energy Plus), Xoom Energy New York LLC (Xoom Energy), Gateway Energy Services Corporation (Gateway), Energy Plus Natural Gas LLC (EPNG), Stream Energy New York LLC (Stream Energy), Green Mountain Energy Corporation (Green Mountain), and Reliant Energy Northeast LLC (Reliant Energy)

NRG Energy provided the following statement concerning the matter:

"NRG stands ready to work with Staff of the Department of Public Service to resolve this matter. We have a strong culture of compliance and stand for healthy energy markets that encourage innovation and cleaner energy. We support the right of our customers to continue service on the products they have chosen."

--- Statement from NRG Energy

NRG has responded to the NOAVs, but the entire substantive portion of the response was filed on a confidential basis

NRG disclosed the matter in a 10-K as follows: "The NYSPSC issued an order referred to as the Retail Reset Order in December 2019 that limited ESCO's offers for electric and natural gas to three compliant products: guaranteed savings from the utility default rate, a fixed term capped at 5% of the rolling 12-month average utility default rate, or NY-sourced renewable energy that is at least 50% greater than the prevailing NY Renewable Energy Standard for load serving entities. The order effectively limited ESCO offers to natural gas customers to only the guaranteed savings and capped fixed term compliant products because no equivalent renewable energy product exists for natural gas. NRG took action to comply with the order when it became effective April 16, 2021. On January 8, 2024, the NYSPSC [sic] notified eight of NRG's retail energy suppliers (serving both electricity and natural gas) of alleged non-compliance with New York regulatory requirements. Among other items, the notices allege that the NRG suppliers did not transition existing residential customers to one of the three compliant products authorized by the NYSPSC following the effective date of the order. NRG responded to the notices in February 2024. The outcome of this process has the potential to negatively impact the retail business in New York."

Regarding the retail market reset order, several of its notable provisions implicated by the Notices are as follows:

• The Department states that the Commission’s December 2019 reset order required that any ESCO customers enrolled on a month-to-month contract, including those enrolled on a fixed-rate plan for electricity that shifted to a month-to-month contract at the expiration of the contract term, could only be served going forward via a compliant energy product following April 16, 2021, the effective date of the December 2019 reset order. With respect to customers’ month-to-month contracts, the Department states that the expiration of the agreement is at the end of the current billing period

• ESCOs serving the mass market were required to re-file for eligibility to continue such service, and the granted eligibility is limited to specifically enumerated commodities and specifically enumerated compliant products listed in each ESCO's retail access application form

• The Department states that under the reset order, any mass-market customer contract for a fixed rate commodity service that is subject to automatic renewal shall be renewed by the ESCO only as a contract for variable-rate, commodity-only service that includes a guaranteed savings over the utility price, "unless the ESCO obtains affirmative customer consent to renewable [sic] the contract as a fixed-rate contract that is priced at no more than 5% greater than the trailing 12-month average utility supply rate."

Although the alleged violations are specific to each ESCO, a common allegation from the Department was that the ESCO had continued to serve customers on an allegedly non-compliant month to month basis following the effective date of the December 2019 Order

Another common alleged violation across the Notices is that the ESCO allegedly served gas customers despite its revised, post-reset eligibility being limited to a specific electricity product or products

The NOAVs discuss the Department's steps to determine if the applicable customers were served under any compliant product that the ESCO may be authorized to provide, and the Department alleges that, after such review, there were customers not being served under a compliant product. Generally, the customers being served noted below refer to customers as of data responses provided circa June 2023.

Regarding the enumerated customers served on a month to month listed below, the Department generally alleges that such service is on a non-compliant basis and that the service has not been shown to meet the standards of one of the compliant products (and/or the ESCO may not be authorized to provide that specific product)

With respect to Direct Energy Services LLC (Direct Energy), the Department alleged, "36,940 customers remained on non-compliant month-to-month contracts, all legacy contracts executed prior to April 16, 2021."

The Department alleged, "Since Direct Energy did not serve customers on a renewable product or a GSP [guaranteed savings plan], Staff contends that the majority of Direct Energy’s customers were served on non-compliant month to month contracts following the effective date of the December 2019 Order, which apparently violated the December 2019 Order."

The Department alleged, "Additionally, Staff did an examination of gas migration reports and discovered that Direct Energy has continued to serve gas to over 13,000 mass market gas customers across every utility in New York State, despite only being eligible to serve a renewable electric product after April 16, 2021. Such gas service presumptively subjects Direct Energy to an NOAV for non-compliant service."

With respect to Xoom Energy New York LLC (Xoom Energy), the Department alleged that 6,357 customers continued to be served on non-compliant variable month-to-month electric non-renewable contracts executed prior to April 21, 2023

The Department alleged, "Additionally, Staff examined Xoom’s gas migration reports and discovered that Xoom Energy has continued to serve more than approximately 9,000 mass market gas customers across the utility service territories of Central Hudson Gas and Electric Corporation, Consolidated Edison Company of New York, Inc., Keyspan Gas East Corporation d/b/a National Grid, The Brooklyn Union Gas Company d/b/a National Grid NY, National Fuel Gas Distribution Corporation, Niagara Power Corporation d/b/a National Grid, New York State Electric and Gas Corporation, Orange and Rockland Utilities, Inc. and Rochester Gas and Electric Corporation, despite only being eligible to only provide a renewable electric product to mass market customers after April 16, 2021."

The Department alleged, "Xoom Energy was never issued eligibility to market or serve a gas product to mass market customers following the December 2019 Order, therefore it appears to be in violation of the Order."

With regard to Gateway Energy Services Corporation (Gateway), the Department alleged 8,751 customers had been on non-compliant month-to-month agreements

The Department alleged, "Additionally, Staff did an examination of gas migration reports and discovered as that [sic] Gateway continues to provide gas service to over 14,000 residential and small commercial customers across every utility in the State despite only being eligible to offer a renewable electric product and thus not being eligible to serve gas customers."

With regard to Energy Plus Natural Gas LLC (EPNG), the Department alleged, "Staff examined EPNG’s gas migration reports and discovered that EPNG Plus has continued to serve over 1,300 mass market gas customers across the service territories of Consolidated Edison Company of NY, The Brooklyn Union Gas Company d/b/a National Grid, Natural Fuel Gas Distribution Corporation, New York State Electric and Gas Corporation, and Orange and Rockland Utilities, Inc. in New York State, [sic] Staff reviewed all sales agreements submitted for review on behalf of EPNG, and the most recent sales agreement submitted prior to the December 2019 application process, was for a month-to-month variable rate product that was submitted as part of its Triennial compliance filing submitted October 7, 2019. Staff found no evidence of any fixed term contracts filed on behalf of EPNG prior to the implementation of the December 2019 Order. Therefore, Staff asserts that EPNG may have violated the December 2019 Order by failing to return mass market gas customers to the incumbent utility at the end of the monthly term of their contracts."

With respect to Stream Energy New York LLC (Stream Energy), the Department alleged, "[of] 4,551 customers who began service prior to April 21, 2021, 4,530 continued to be served on a variable month-to-month non-renewable product as of December 31, 2022."

The Department alleged, "Additionally, Staff examined Stream Energy’s gas migration reports and discovered that Stream Energy has continued to serve gas contracts to over 2,500 mass market customers in Consolidated Edison Company of New York, The Brooklyn Union Gas Company d/b/a National Grid NY, Niagara Power Corporation d/b/a National Grid, New York State Electric and Gas Corporation and Rochester Gas and Electric Corporation utility territories, despite only being eligible to serve a renewable electric product after April 16, 2021. Such gas service presumptively subjects Stream Energy to an NOAV for non-compliant service."

With respect to Green Mountain Energy Corporation (Green Mountain), the Department alleged that, "Green Mountain had 43,013 variable and 839 fixed non-compliant legacy customers."

The Department alleged, "To date, Green Mountain continues to serve over 2,500 mass market gas customers in Consolidated Edison Company of New York, Inc., and The Brooklyn Union Gas Company d/b/a National Grid NY territories according to migration data. Green Mountain is only eligible to market an electric renewable product. Consistent with Ordering Clause 2 of the July 15, 2022, Waiver Order, Green Mountain was directed to transfer these gas customers to a product that complies with the Commissions December 2019 Order or drop them back to utility service, which did not occur. Such non-compliant gas service presumptively subjects Green Mountain to an NOAV for non-compliant service."

With respect to Reliant Energy Northeast LLC (Reliant Energy), the Department alleged, "Reliant Energy had 12,498 customers on month-to- month legacy contracts".

The Department alleged, "Additionally, Staff examined gas migration reports and discovered that Reliant Energy continued to serve gas products to over 3,800 mass market customers across the service territory of Niagara Mohawk Corporation d/b/a National Grid, despite only being eligible to serve a renewable electric product after April 16, 2021."

With respect to Energy Plus Holdings LLC (Energy Plus), the Department alleged, "Energy Plus continued to serve customers on non-compliant electric products following the effective date of the December 2019 Order."

ADVERTISEMENT

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- TPV Sales Executive

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.