Consumer Protections in the Restructured Energy Industry

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Reply Comments
On May 23, 2008, the New York State Department of State Division of Consumer Protection filed reply comments regarding proposed changes to the New York State Public Service Commission's (PSC) Uniform Business Practices for retail access that are intended to address problems revealed by consumer complaints about certain marketing practices. We respond to issues raised in other parties’ initial comments. The Division explains that standards of conduct should apply to marketing activities directed at small commercial, as well as residential customers. Energy service company representatives conducting unsolicited door-to-door or telephonic marketing should be required to make a short, explicit statement that they do not represent the utility, and contract documents should contain a chart containing key terms, including duration, price, price variability, early termination fees and late payment fees similar to the disclosure box currently required by federal law for credit card solicitations.

Initial Comments
In comments filed April 18, 2008, the New York State Department of State Division of Consumer Protection continues to advocate that the New York State Public Service Commission establish enforceable rules governing the marketing practices of energy service companies. We identify those standards and explained why they should apply to marketing conducted to residential and small commercial customers. In addition, we demonstrate that energy service company contracts should be revised to clearly identify, in a single chart on the front page, key items including the price, duration of contract, and early termination fee (if any).

Consumer Protections Regarding ESCO Marketing
The New York State Department of State Division of Consumer Protection is taking action to stop overly aggressive and questionable marketing practices preformed by certain energy services companies (ESCOs) throughout New York State, particularly in New York City and Western New York. These companies provide electricity and natural gas services at prices and under terms and conditions that are generally not regulated, as alternatives to what is available from regulated utilities such as Consolidated Edison and National Grid.

Petition Requesting Marketing Standards
In this formal petition dated December 19, 2007, the New York State Department of State Division of Consumer Protection and the New York City Department of Consumer Affairs, ask the New York State Public Service Commission to strengthen its oversight of the marketing practices of energy service companies (ESCOs). State agencies continue to receive approximately 100 complaints each month regarding ESCOs, mostly concerning misleading and aggressive marketing practices, particularly resulting from door-to-door sales. We recommend in our petition, that current voluntary standards regarding marketing practices by ESCOs, be replaced by mandatory and enforceable requirements to help protect consumers. We propose, among other things, that ESCOs and their representatives provide a photo identification and corporate contact information to customers upon contact, and that they clearly explain that they are not associated with the regulated utility.

Requirements for ESCO Pricing -- Reply Comments
In these Reply Comments dated August 21, 2006, the New York State Department of State Division of Consumer Protection address each of the concerns raised by unregulated energy services companies (ESCOs) as to why they should not provide comparable pricing information to consumers. We demonstrate that these concerns can be addressed by our proposal, under which unregulated ESCOs would provide simple, current, weekly pricing information in a prescribed format. We explain that this information has been provided in other states, and it should be provided to consumers in New York as soon as possible.

Requirements for ESCO Pricing -- Initial Comments
The New York State Department of State Division of Consumer Protection explains in these July 25, 2006, initial comments that the absence of useful, easily accessible information on the prices of electricity and natural gas service offered by energy service companies (ESCOs) is a severe impediment to the development of a competitive retail energy market. We identify price reporting requirements that are fair and balanced, and explain that ESCOs refusing to provide consumers this basic information should not continue to be provided subsidies through New York State Public Service Commission (PSC) decisions. We recommend that the PSC require ESCOs to provide that pricing information as soon as possible.


Last Modified: May 02, 2011