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New York PSC Staff filed proposed amendments to the Uniform Business Practices (UBP) to allow the use of surety bonds as a means of complying with the financial collateral requirements for registration as a broker or consultant in the State of New York.

“To ensure that energy brokers and consultants subject to PSL § 66-t are provided with sufficient time to comply with these requirements, Staff proposes that brokers and consultants be given until 60 days after the issuance of a Commission order addressing this proposal to come into compliance with any revisions to UBP § 11.B.1.j and UBP-DERS § 4.B.1.j.” [Emphasis added.]

Staff’s proposal would allow a broker or consultant to demonstrate the required financial accountability in the form of, “[a] surety bond issued by a reputable financial institution on a form to be prescribed by the Department with a penal sum of $100,000 for registering Energy Brokers; and $50,000 for registering Energy Consultants, as long as it meets the following conditions:

• The New York State Department of Public Service shall be named as beneficiary and the letter of credit applicant shall be clearly named; 
• Any number of partial drawings shall be permitted from time to time; 
• The process for making a drawing, including any required forms and communications or delivery instructions shall be stated; 
• If a drawing is made, payment shall be made to the beneficiary within 5 business days;
• Any expiration date shall be specified and options for renewal, including automatic renewal, shall be stated. 
• The applicant’s filing for bankruptcy, receivership, or any other debt-relief petition shall in no way affect the issuer’s liability to the beneficiary under the letter of credit.
• All commissions, fees, and other charges with respect to the letter of credit shall be paid by the applicant; 
• Except for increases to the amount, the letter of credit shall not be amended, changed, or modified without express written consent of the beneficiary; 
• The beneficiary shall not be deemed to have waived any rights under the letter of credit unless an authorized representative thereof has signed a dated written waiver. No such waiver, unless expressly stated therein, shall be effective as to any subsequent transaction, nor to any continuance of a breach; and 
• If the beneficiary should require a replacement of the letter of credit due to loss or destruction of the original, the issuer will provide one upon request;

Or

• A surety bond issued by a reputable financial institution on a form to be prescribed by the Department with a penal sum of $100,000 for registering Energy Brokers; and $50,000 for registering Energy Consultants, that meets the following conditions: 
  • The New York State Department of Public Service shall be named as the obligee; 
  • As a condition of the bond, the applicant and its employees are required to comply with all applicable provisions of the laws of the State of New York and the rules, regulations, and orders of the Commission and of the Department, including, but not limited to, the Uniform Business Practices and the Uniform Business Practices for Distributed Energy Resource Suppliers;
  • If the applicant breaches the bond’s conditions, the Department may recover against the bond for the reimbursement of fees or other charges that the Department has determined were improperly collected from customers; for the payment of past due fees or other charges owed by the applicant to the Department, including any unpaid penalties; and for any customer reimbursements or other remedial or financial obligations of the applicant in the event of the applicant’s insolvency, liquidation, or bankruptcy or the expiration, surrender, or revocation of the applicant’s registration; 
  • Immediately upon recovery on any claim or action on or under the bond, the applicant shall file a new or supplemental bond restoring the face amount of the bond to the required amount; 
  • The bond shall be continuous and shall remain in force until the surety is released from liability by the Department or until the bond is canceled by the surety. Without prejudice to any liability accrued prior to the cancellation, the surety may cancel the bond on ninety days advance notice in writing sent by mail to the applicant and to the Department; 
  • The bond’s termination shall not terminate or otherwise affect any liability of the applicant or its employees to its customers or to the Department; 
  • The surety will give prompt notice to the applicant and to the Department of any notice received or action filed alleging the insolvency or bankruptcy of the surety or alleging any violations of regulatory requirements which could result in suspension or revocation of the surety’s license to do business. In the event the surety becomes unable to fulfill its obligation under the bond for any reason, notice shall be given immediately to the applicant and to the Department; 
  • All commissions, fees, and other charges with respect to the surety bond shall be paid by the applicant.

UBP & UBP-DERS Modification Proposal  (08/28/2025)
23-M-0106
(In the Matter of Commission Registration of Energy Brokers and Energy Consultants Pursuant to Public Service Law Section 66-t.)