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Trade Group's Purchasing Alliance Seeks Clarification From New York PSC That New Broker Regulation Does Not Apply To It
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The AOBA Alliance, Inc. petitioned the New York PSC to clarify that the PSC's new broker/consultant regulations do not apply to the Alliance
Addressing the PSC's April broker regulation rehearing order, the Alliance sought a finding from the PSC that the relationship between the Alliance and Alliance participants is not sufficient to deem the Alliance an entity subject to the broker/consultant rules
The Alliance had previously sought a finding from the PSC that the Alliance's activities do not make it a broker or consultant, but in an April 2024 rehearing order, the PSC said that the PSC was unable to render a decision, "absent a full understanding of Alliance's relationship to its members."
In its latest petition, the Alliance seeks to address this issue
In its filing, the Alliance recounted its history, and noted that the Alliance developed a standard form retail energy contract, with specific terms and provisions sought by Alliance participants, for use by Alliance participants. In the Mid-Atlantic, "The Alliance
prepared the contract form that would be used exclusively by its members with a single electric
supplier in the Washington, D.C. area, (i.e., The District of Columbia, Maryland, Virginia, and
Pennsylvania). The AOBA Alliance Board of Directors determines the single electric supplier [currently Constellation NewEnergy], as
well as the length of the contract with the supplier."
The Alliance explained that, "the Alliance contract form initially and exclusively applied
to participants who owned or operated buildings in the District of Columbia, Maryland, Virginia
and Pennsylvania[.]"
The Alliance said that, "With the advent of deregulation, Constellation requested permission from the Alliance to
use key provisions from the Alliance contract form and in particular customer favorable provisions
from the Alliance contract form in jurisdictions outside the Washington metropolitan area."
"The Alliance receives a small fee from Constellation for the permission granted to
use those key contract provisions from that contract form. The use by Constellation (not the
Alliance) of those key contract provisions is the only indirect involvement (if that) the Alliance
has with the State of New York," the Alliance said
Unlike in its Mid-Atlantic markets, the Alliance explained that, in New York, the Alliance's single retail supplier, Constellation
NewEnergy, "handles all marketing and sales," with the Alliance further stating that, "the Alliance's involvement is strictly limited to
allowing the use by Constellation of key contract provisions from the contract form."
"There is no membership fee to purchase energy supply through the Alliance," the Alliance said
"The Alliance is compensated by
Constellation for the permission granted to Constellation to use key contract provisions from the
contract form and there is a statement of that effect in the supply contract. However, there is no
additional fee that is added to the participants [sic] cost of supply, the fee is NOT additive," the Alliance said
The Alliance further noted that it is not a party to the energy supply agreement, and that all contractual terms and conditions are negotiated between the customer and CNE
The Alliance said that it does not have any contact with Constellation's customers in New York
"[T]he Alliance neither performs energy management or
procurement functions on behalf of customers doing business in New York nor does the Alliance
act as a broker in soliciting, negotiating or advising any electric or natural gas contract," the Alliance said
Case 23-M-0106 et al.
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July 29, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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