Dive Brief:
- After winning a stay of new rules they say could force them out of business, energy service companies, known as ESCOs, are now facing a potential $98.6 million bond the New York Public Service Commission wants to cover customer repayments.
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The state proposed new rules on ESCOs last month, including requiring the energy providers to either guarantee savings or require a portion of the energy to come from clean sources.
- There are about 200 ESCOs operating in the state, and the Albany Times Union reports the state proposed setting up a $98.6 million bond to repay customers if customers have been overcharged while the judge arrives at a decision.
Dive Insight:
There are still several weeks remaining on ESCO's temporary restraining order on new rules, but the companies are already facing another potential threat – a bond they say is wildly speculative and which could also put them out of business.
"The commission bases its request on incorrect legal and factual premises and wild speculation," attorneys for the Retail Energy Supply Association wrote in a filing last week. "First the commission does not, because it cannot, identify any harm that it would suffer as a result of the (restraining order)."
According to the PSC, ESCOs have about 2 million customers in New York and are overcharging by about $30 per month.
"We have zero tolerance for these unscrupulous companies, whose business model is to prey on ratepayers with promises of lower energy costs only to deliver skyrocketing bills," Cuomo said in a statement announcing the new rules last month. "These actions will root out these bad actors and protect New Yorkers from these unfair and dishonest tactics."
Regulators are conducting an audit of ESCOs and has blocked new contracts unless they provide guaranteed cost savings, or at least 30 percent of the supply comes from renewable energy. The PSC has indicated it intends to strengthen the process for revoking ESCO eligibility to do business in New York, and instituted a "do not knock" rule to protect customers, similar to "do not call" provisions
