|
|
|
|
|
To Prevent "Further Disruption" To CCA Market, New York Municipal Aggregator Seeks Confirmation That New Prohibition On Material Changes To Contracts (Including Price) Doesn't Apply To CCAs
The following story is brought free of charge to readers by VertexOne, the exclusive EDI provider of EnergyChoiceMatters.com
Seeking to prevent what it termed "further disruption" to the Community Choice Aggregation (CCA) market in New York, the administrator of several opt-out municipal aggregations in New York is seeking explicit confirmation from the New York PSC that proposed revisions to the Uniform Business Practices (UBPs) to implement legislative changes which prohibit price changes in retail energy contracts (by defining a rate change as a prohibited material change) do not apply to CCAs
As previously reported, Staff of the New York Department of Public Service have filed proposed changes to the Uniform Business Practices to implement General Business Law (GBL) §349-d, which, among other things, generally prohibits ESCOs from changing the rate charged to a customer without the affirmative consent of the customer (with customer having the meaning as defined by law)
Under §349-d, which became effective March 18, 2024, energy services companies (ESCOs) are prohibited from making any change to a contract price, or from changing to or from fixed or variable pricing, without the express consent of the customer
§349-d had already prohibited material changes without express customer consent, but the new revisions explicitly define a change in price to be a material change
See background on the Staff proposal and law here
In comments on Staff's proposal, Joule Assets, Inc. said, "To prevent further disruption to the CCA market, Joule requests that the PSC explicitly confirm that the proposed UBP changes do not impact contracting for Community Choice Aggregation (CCA) programs."
Joule said, "Within the structure of CCA programs, municipalities sign contracts on behalf of residential and small business customers. Since 2016, the foundation of CCA programs is that municipal authority serves as a proxy for individual customer consent and CCA programs are exempt from individual customer consent requirements."
"The amendments to GBL 349-d clarify that 'material change' includes price changes but does [sic] not alter the requirements for customer consent," Joule said
"Nothing in the GBL 349-d amendment alters CCAs’ exemption of the consent provisions of the UBP issued by the PSC in 2016 and CCA programs continue to use municipal authority in place of express customer consent," Joule said
Joule alleged that, for the PSC to alter the consent structure of CCAs, the PSC would need to do so in the CCA proceeding, Case 14-M-0224, and not the generic retail energy proceeding in which Staff proposed the UBP changes
Joule said that current CCA contracts allow for rate changes without individual customer consent
"In both longer- and shorter-term fixed rate contracts, rate changes benefit the customer by ensuring the original rate does not include premiums for components of the rate that are unknown at the time of contracting," Joule said
"When a municipality executes a CCA contract with a longer-term fixed-rate (e.g. 18-36 months) certain pass-through costs are unknown at the time of contract execution. These are costs that the customer must pay if they are on third-party supply or if they are a full-service utility customer. As such, CCA contracts allow for a rate increase or decrease once these pass-through costs are known. A specific example is the cost of compliance with the Clean Energy Standard (CES)," Joule said
"In both longer- and shorter-term fixed-rate CCA contracts, the municipality is agreeing to future "material changes," including increases or decrease to the rate, at the time of contract execution and in advance of the rate change taking effect. The contract outlines the specific process for municipal consent in advance of these changes and it also outlines the notification requirements of the CCA participants," Joule said
"Allowing the continuation of intra-contract rate changes for CCAs is essential to ensure that participants do not pay a risk premium and are able to advance their renewable electricity goals," Joule said
Case 98-M-1343
ADVERTISEMENT ADVERTISEMENT Copyright 2024 EnergyChoiceMatters.com. Unauthorized copying, retransmission, or republication
prohibited. You are not permitted to copy any work or text of EnergyChoiceMatters.com without the separate and express written consent of EnergyChoiceMatters.com
June 14, 2024
Email This Story
Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Energy Regulatory Specialist
• Sr. Market Risk Analyst -- Retail Supplier
|
|
|
|