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Staff Proposal For Implementing Stronger Price Transparency For Consumers

Overview of Staff Proposal:
{***} Proposed Changes to the UBP ESCO business practices are governed by the UBP.6.   To integrate the new requirements of subdivisions 6 and 7 of GBL §349-d in the Commission’s regulatory framework, Staff proposes several amendments to the UBP. All ESCOs would be subject to these amendments. Attachments A and B, included as part of this proposal, respectively provide proposed modifications in redline to the UBP requirements, and an updated standard renewal notice that includes the specific disclosures required in subdivision 7 of GBL §349-d. {***}

Staff Proposed Changes to UBP §1:

{***} Staff proposes to include two new definitions to the UBP in conformity with the amendments to subdivisions 6 and 7 of GBL §349-d. First, Staff proposes to define a “Material Change” as one that affects the rates, terms, and conditions of service contained in the customer agreement. For example, this could include but not be limited to, the commodity rate, product term, or product type. Second, Staff proposes that “Express Customer Consent” be defined as consent given directly and knowingly by the customer, either verbally, electronically, or in writing, which shall subsequently be maintained by the ESCO in a verifiable format. {***}

UBP §2.B.1.c. – Sample Renewal Notices Proposed

{***} Staff proposes amending UBP §2.B.1.c. to include sample renewal notices as part of the retail access application requirements. New ESCOs would provide these sample notices as part of their initial eligibility application, and existing ESCOs would provide these samples at the time of their next annual or triennial compliance filing, whichever comes first, and on an ongoing basis as part of triennial compliance filings thereafter. The ESCOs’ submissions would require a sample of the updated standardized renewal notice for all product offerings, including variable rate products and guaranteed savings products, as discussed further below. {***}

UBP §5.B.5.d.- Including Guaranteed Savings Products:

{***} Staff proposes amending UBP §5.B.5.d to include this more precise language and to remove language that specifically excludes guaranteed savings products from requiring express customer consent. The new language would provide that any material changes, including a change to a guaranteed savings product, requires express customer consent. Staff also proposes to add a provision requiring the ESCO to maintain records of express customer consent for a minimum of two years or for the length of the sales/renewal agreement, whichever is longer. Staff further proposes to amend UBP §5.B.5.d. to include the specific notice disclosures regarding the transparency of pricing that must be included in customer contract renewal notices. Specifically, these amendments would require that the renewal notices include: (i) the price charged for energy services; (ii) the price the ESCO proposes to charge upon renewal; (iii) the price that is charged by the customer’s distribution utility; and (iv) information notifying the customer how they may compare past bills with what they would have been charged had they received energy services from the respective distribution utility, including the internet address of any bill calculator offered by such customer’s distribution utility’s website. To structurally make these changes to the UBP, Staff proposes to make the material change and renewal provisions currently found at UBP §5.B.5.d through 5.B.5.F their own section found at UBP §5.B.5. The remaining provisions of the existing UBP §5.B.5 would now be found at UBP §5.B.6.{***}

Other Implementation Proposals:

{***} In addition to the proposed UBP modifications, Staff makes the following proposals regarding implementation of the amended language of GBL §349-d. First, regarding the requirement of GBL §349-d(6) to obtain express customer consent for any material change made to the terms and conditions of an ESCO contract, Staff proposes that such consent must be obtained and recorded in a verifiable format and that verifiable proof of customer consent be furnished to Staff upon request. Second, with respect to the information that must be included in renewal notices pursuant to GBL §349-d(7), specifically the price that is charged by the customer’s distribution utility, Staff proposes to allow ESCOs to utilize the 12-month trailing average posted by distribution utilities quarterly to satisfy this requirement. [Emphasis added.] {***}

Proposed Modifications to the Staff-Developed Standard Renewal Notice:

{***} Staff proposes modifying the standardized renewal notice required to be used by ESCOs to reflect the renewal notice disclosures included in the amendments to subdivisions 6 and 7 of GBL §349-d. A modified standardized renewal notice is included herein as Attachment B. Reflecting the UBP redlines at §2.B.1.c, ESCOs would be required to provide a sample renewal notice to Staff as part of their respective initial application package. Existing ESCOs would provide these samples at the time of their next annual or triennial compliance filing, whichever comes first.{***}

Variable Rate/Month-To-Month Product Offerings:

{***} To implement the amendments to subdivisions 6 and 7 of GBL §349-d, Staff recommends that the definition of what constitutes a material change be amended to include a change in price as a material change. This new requirement in GBL §349-d(6) would require an ESCO to obtain a customer’s express consent for any change in price, including a price change pursuant to a variable rate agreement or any changes in the terms used to determine such price. Absent the customer’s express consent to the price change, the ESCO would not be permitted to change the price the customers pay pursuant to their agreement with the ESCO.

Moreover, the amended language of GBL §349-d(7) regarding contract renewals would apply to all month-to-month agreements, which expire and are renewed each month.7 As a result, the ESCO would be required to provide monthly notices that include all required notice disclosures in order to continue service to a customer on a month-to-month agreement in a compliant. {***}

Staff Proposal RE Material Change and Renewal Notice Legislation  (03/26/2024)
98-M-1343
(In the Matter of Retail Access Business Rules)

See also:  17-01275 , 15-M-0127 , 14-02557 , 12-M-0476 , 11-M-0089 , 98-M-0667