Dive Brief:

• The New York Public Service Commission (PSC) has halted the sale of electricity and natural gas by competitive energy service companies to low-income customers, seeking to protect them from "unscrupulous" marketers, the Buffalo News reports. 
• The new rules are the latest in enhanced protections the state is putting in place regarding how ESCOs operate following accusations of wide-scale overcharging.
• According to a statement from Gov. Andrew Cuomo, during collaborative meetings on reforms,
  "some ESCOs confirmed that they were not likely to provide a guaranteed savings to low-income customers."

Dive Insight:

New York is continuing to crack down on unscrupulous ESCOs, after many were found to be overcharging customers earlier this year. Roughly 1 in 5 residential customers in the state get their energy from an independent company.

“This action will help protect low-income households from unscrupulous energy service providers and deliver much-need relief to New Yorkers across the state,” Cuomo said. “By taking aggressive action to keep energy costs affordable, we are building a stronger, more sustainable New York.” 

The announcement comes on the heels of a series of meetings to define the energy-related value-added products and services that must be provided to low-income customers, and to consider how best to protect existing low-income customers who are served by ESCOs.

During those "collaborative meetings," Cuomo's statement explained "some ESCOs confirmed that they were not likely to provide a guaranteed savings to low-income customers. Stakeholders were also unable to define energy related value-added services that would provide a cost-effective benefit to low-income customers."

That lead the PSC to determine low-income customers "would be best served and protected through utility commodity service." Now, customers who participate in a utility's low-income program will get their energy services from utilities rather than a competitive supplier.

PSC Chair Audrey Zibelman said it is clear that low-income customers have not benefited from ESCO power and gas service.

"The Commission is taking steps to ensure energy affordability for low income customers. Unless and until these guarantees can be made, it is critical that we ensure that low-income customers are not paying any more than necessary for gas and electricity," Zibelman said in a statement. "We challenged the competitive retailers to look for ways to guarantee savings at or below the cost of utility supplied power and gas.”

In February, regulators began conducting an audit of the state's ESCOs and blocked new contracts unless they provide guaranteed cost savings, or at least 30% of the supply comes from renewable energy.