Deregulation of a small part of a highly regulated industry … just collapsed
The New York Public Service Commission (PSC) action:
The New York PSC has ordered that ESCOs servicing mass market electric and natural gas customers on month-to-month variable rate products must return these customers to default service or “enroll” the customers onto a compliant product under the PSC’s “full stop” of the retail market.
Mass market customers are defined in the order as including residential and small non-residential customers. Small non-residential customers are defined as either a non-demand metered electric customer or a non-residential gas customer with annual gas consumption that does not exceed 750 dekatherms per year or the equivalent.
ESCOs shall only enroll new mass market customers or renew existing mass market customers in gas or electric service if at least one of the following two conditions is met: (1) enrollment where the contract guarantees that the customer will pay no more than were the customer a full-service customer of the utility; or (2) enrollment based on a contract for an electricity product derived from at least 30% renewable sources.”
Energy marketer’s response:
The Commission’s actions today were partly in response to the marketing practices of a few ESCOs. Consumer protection is a key objective for all market participants, including RESA members. The Commission has promulgated myriad rules governing market conduct that can be effectively used to address abusive marketing practices. Rather than exercise its existing authority to penalize rule violations, the Commission instead is seeking to shut down retail competition for all ESCOs, including the majority of suppliers who diligently follow the rules. This action is akin to shutting down the highway in order to stop a few drivers from speeding.
The effect:
The New York PSC has essentially defined what results a business’s product must deliver. Energy marketers must deliver electric/natural gas that beats the utility on price or provide renewable power (something the PSC wants).
So what’s changed?
1. This is not a market place that will allow for customer choice balanced with consumer protection.
2. The PSC has defined the parameters that must be met, therefore defined what can be offered to customers.
3. This may protect consumers from paying above the utility rates (which Realgy fully supports), however, it is a very heavy regulatory action.
Realgy Energy Services is a registered Retail Energy Marketer in the states of Illinois, Michigan and Indiana. We offer Service Plans that will provide electric and natural gas at wholesale pricing direct to customers without any utility markup. Our Service Plans work with the local utility to provide seamless service and annual energy savings. Service Plans include Guaranteed SavingsTM, ManagedPriceTM, ManagedGreenTM and Index, Fixed pricing.
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