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Joule Assets Seeks Confirmation That New Prohibition On Material Changes To Contracts -Including Price Changes – Do Not Apply To CCAs
Excerpts from comments Of Joule Assets:
“On March 26, 2024, the Department of Public Service (DPS) issued a Proposal to revise the Uniform Business Practices (UBP) as a result of amendments to General Business Law (GBL) 349-d. Joule Assets, Inc. (“Joule”), a Community Choice Aggregation Administrator, submits comments on the Proposal.
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. Altering the consent structure of CCAs requires the Public Service Commission (PSC) to directly address this issue within the CCA Proceeding (Case 14-M-0224). The CCA contracting structure relies on municipal authority including for contract changes after initial contract execution. CCA contracts allow for rate changes without individual customer consent. 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.”
“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.”
“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.”
“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.”
“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.”
“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).”
“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.”
“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.”
As previously reported, NY PSC Staff 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.”
Joule Assets Comments
98-M-1343
(In the Matter of Retail Access Business Rules – Proposal1 to revise the Uniform Business Practices (UBP) because of amendments to General Business Law (GBL) 349-d.)
