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New York Supreme Court Stays A Narrow Part Of NYPSC’s Consultant/Broker Regulation Order Which Specifically Removed Bond Option As Acceptable Form Of Financial Accountability; But Lifted Temporary Restraining Order On Remainder Of NYPSC’s Broker Rules
Following oral arguments that were held on September 10th, the Albany Supreme Court of New York issued a written order that narrowly stayed portions of Ordering Clauses 3, 6 and 7 of the New York Public Service Commission (PSC’s) retail energy consultant/broker regulation order dealing specifically with those clauses that restricted a broker/consultant from using a bond as an acceptable form of financial accountability instrument and instead required the broker/consultant to provide an irrevocable letter of credit.
For reference, Ordering Clauses 3, 6 and 7 deal with the following:
- Ordering Clause 3 – New Uniform Business Practices (UBPs) reflecting the new broker rules are effective July 31, 2024.
- Ordering Clause 6 – Brokers/consultants shall comply with the new UBPs.
- Ordering Clause 7 – Brokers/consultants shall register with the PSC by July 31, 2024.
Under this order brought by the Citizens Choice Energy, LLC and Diversegy petition, LLC, the court ruled that the NY PSC cannot deny use of a bond as an acceptable financial instrument pending the appeal. However, the remainder of the Commission’s broker registration rules and deadlines remain in effect.
“Public Service Law $ 66-T*2, registration of energy brokers and energy consultants, at section 3(a), specifically states that “An energy broker or energy consultant shall register with the commission authorizing such registered energy broker or energy consultant to act as an energy broker or energy consultant in a manner prescribed by the commission; provided that such: (i) energy broker demonstrates financial accountability as evidenced by a bond or other method of financial accountability in an amount not less than one hundred thousand dollars; and (ii) energy consultant demonstrates financial accountability as evidenced by a bond or other method of financial accountability in an amount not less than fifty thousand dollars.” In its “Declaratory Ruling and Order on Rehearing” issued on April 18, 2024, PSC attaches its changes to the Uniform Business Practices and removes bond as an acceptable method of financial accountability as part of their registration.”
“In this matter, it is within the Court’s discretion to only enjoin enforcement of the financial assurance requirement and the removal of bonds as a method of financial accountability. Addressing that alleged harm does not require an injunction barring implementation of PSC’s entire program. This outcome would avert any alleged losses of market share or good will while also permitting the PSC to proceed with the consumer protection rules that the Legislature has directed it to implement, to review applications, communicate with market participants, and review and incorporate staff s final revisions to the regulations while this matter is pending.”
“It is hereby Ordered:
“[T]hat the order to show cause and the restraining order signed by Hon. Peter Lynch on August 1,2024 is hereby vacated.”
“[P]ending a determination and decision by this Court, respondent PSC, its agents, officers, employees, successors assigns and all persons acting in concert with it or on its behalf, is hereby stayed from enforcement of the Ordering Clauses of respondent’s “Declaratory Ruling and Order on Rehearing” issued on April 18,2024, specifically Ordering Clauses 3, 6 and 7, which specifically remove a bond as an acceptable form of financial accountability as set forth in the Public Service Law $ 66-T*2 and instead require an energy broker or energy consultant to submit an irrevocable letter of credit with their registration package to respondent PSC.”
{Emphasis added.}
Note as of publication date the Court had not issued a ruling in the New York Retail Choice Coalition (NYRCC) and M&R Energy Resources Corp. petition.
Order – Index 907356-24 – brought by Citizens Choice Energy, LLC and Diversegy, LLC)
See also Index No. 907244-24, brought by the New York Retail Choice Coalition (NYRCC) and M&R Energy Resources Corp. Use general link to find related documents:
https://iapps.courts.state.ny.us/webcivil/FCASSearch.
