New York

Restructuring Overview  |  Public Benefits  |  Restructuring Resources  |  Consumer Protection  |  News and Analysis

Legislation passed
No legislation; restructuring being directed by PSC

Electric
Overview

• 1996-2001: Unlike most other states, New York implemented retail electric restructuring through administrative decisions by the Public Service Commission, not by statute. On March 14, the New York State PSC approved plans to allow residential, small business, commercial, and industrial customers to start buying their natural gas supply from sources other than the traditional utility companies. The Commission issued orders and approved restructuring settlements to phase in retail electric competition for all customers, but implementation has varied among the different electric utilities.
• In all of its restructuring decisions, the Commission required the local electric utility to provide default service, referred to as the provider-of-last-resort, at least during the transition period. The term of the default service varies by individual utility settlements. In most decisions, the settlement resulted in either a rate freeze or modest rate reductions for residential customers. Unlike other utilities, however, Consolidated Edison asked to provide default service through the wholesale market and pass through this rate every month. Because the plan allowed Con Ed to pass through its actual wholesale power fuel costs, it resulted in volatile prices and significant rate increases beginning in the summer of 2000.
• Upstate New York utilities, such as New York State Electric & Gas Corporation (NYSEG) and Niagara Mohawk, proposed multi-year rate plans, which lock in prices for generation service six to eight years while allowing customers to seek lower prices in the competitive market. This will substantially lengthen the transition period for these utilities.
• July 2001: The PSC organized numerous working groups and conferences to grapple with the developments in the retail energy markets both in and out of New York, the rise in wholesale power prices, and the lack of uniformity among the models, programs, and policies for retail competition in the various electric utilities. The Administrative Law Judges assigned to this proceeding recommended that the PSC adopt an explicit "universal service goal" for the electric industry. They also endorsed low-income programs and rates and suggested that the PSC focus on developing workable wholesale competitive markets before implementing full-scale retail competition. Their report rejected the notion of a provider-of-last-resort service that is more expensive than service from non-POLR providers. The decision recommended the continuation of utility-supplied default service until the wholesale market is viable and can provide reasonable prices and encourage suppliers to make offers to mass-market customers. The decision also recommended that the state Home Energy Fair Practices Act be applied to all competitive energy providers and that energy providers be directly regulated by the PSC. The Commission was scheduled to consider comments and reactions to this Recommended Decision late in 2001.
• November 2001: The PSC adopted uniform retail access regulations governing business practices between utilities and electric and natural gas suppliers.
• January 2002: The state-controlled Long Island Power Authority opened its market to retail competition.
• December 2002: Governor Pataki signed the Energy Consumer Protection Act, passed unanimously by the state legislature in June 2002, requiring electric and natural gas suppliers to comply with HEPFA, a residential consumer protection statute applicable to utilities.

Choice Status

• As of May 2003, 388,199 of the state's 7.9 million residential electricity customers (about 5.3%) eligible for choice have switched to new suppliers. Of these 145,021 were in Con Edison territory (which serves New York City), the largest number of any New York utility.

Natural Gas
Overview

• On March 14, 1996, the New York Public Service Commission (PSC) approved plans to allow residential, small business, commercial, and industrial customers the option to start buying their own natural gas supply from sources other than the traditional utility companies. The PSC projected that utilities would exit the merchant function within 3 to 7 years.

Choice Status

• As of April 2003, competitive suppliers served 318,216 residential customers, or 7.6% of New York’s 4.2 million residential natural gas customers.

Choice education
Voice Your Choice
http://www.askpsc.com/campaigns/?action=viewCampaign&id=1024

Your Energy . . . Your Choice: Electric
www.dps.state.ny.us/energyguide.htm
This state website explains energy choice in New York and lists some consumer protections and an example of an itemized bill. It also features a list of electric suppliers and links to their sites.

Your Energy . . . Your Choice: Natural Gas
www.dps.state.ny.us/GasNews.htm
This state website explains energy choice in New York and features a list of natural gas suppliers and links to their sites.

Suppliers
www.dps.state.ny.us/eschoice.htm

Public Benefits

New York’s Public Service Commission initially approved a range of electric efficiency programs for low-income and non-low-income residential, commercial, and industrial customers under a systems benefits charge (SBC) in 1998. The PSC renewed and expanded the SBC in January 2001 to run through June 2006. The SBC-funded programs are administered by the New York State Research and Development Authority. Yearly funding averages $150 million, including $25 million annually for low-income energy efficiency. Additionally, most electric and gas utilities administer a range of low-income energy affordability programs funded as part of restructuring plans, mergers or rate case settlements. As of 2001, these program totaled about $15 million annually, and include rate discounts, affordable payment plans and arrearage forgiveness; some offer energy efficiency and appliance repair or replacement measures as well. (Click here for details on the state’s low-income energy and general residential energy programs.)

Aggregation - buying coops

• An aggregator is a non-utility entity that aggregates customers (including direct customers) for the purpose of obtaining electricity and/or natural gas supply for those customers but does not sell electricity or natural gas to those customers.
  

State Restructuring Resources

Utility Regulatory Commission
New York Public Service Commission
1-888-275-7721
www.dps.state.ny.us/

Consumer advocate
New York Public Service Commission
1-800-342-3377
www.dps.state.ny.us/

Office of Consumer Advocacy and Education
518-474-1540
Consumer Protection Board
Utility Intervention Unit
www.consumer.state.ny.us/strategic.htm

Public Utility Law Project
http://www.pulpny.org/
The Public Utility Law Project (PULP) represents low income and rural consumers in utility, telecommunications and energy-related matters. Its website includes a New York deregulation information center.

Grassroots groups
Environmental Advocates of New York
518-462-5526
www.eany.org/capitolwatch/priorities.html#airenergy
Energy policy is among this environmental group's legislative priorities. It "will support legislation to foster consumer choice for electricity, remove market barriers to clean energy sources, and provide incentives and investment for efficiency and commercialization of renewables."

Consumer Protection

PLEASE NOTE:
The Energy Consumer Protection Act of 2002, extending the protections of the state’s Home Energy Fair Practices Act to customers of competitive electric suppliers, was passed unanimously by both houses of the State Legislature in June 2002.   It will take effect June 18, 2003, 180 days after it was signed by the Governor.

Disconnection policy

• Between November 1 and April 15, utilities seeking to disconnect residential service must contact the customer at least 72 hours before disconnection and determine if any household member would suffer impairment to health if the disconnection occurred. Disconnection is prohibited during these dates if it would harm the health or safety of a household member.
• Service cannot be shut off by the utility if: a Final Termination Notice has not been sent; the amount owed was billed and due more than a year ago, and because of no fault of the customer, the utility did not begin termination procedures; a doctor certifies that there is a medical emergency; the customer has a billing dispute filed with the utility or the PSC concerning the amount owed; the customer makes full payment of the amount owed when the utility comes to shut off service; or the customer makes a payment agreement with the utility which covers the amount owed.
• Service cannot be shut off for non-payment on a public holiday, the day before a holiday, the two-week period that includes Christmas and New Year's Day, or on a day before the utility business office closed.
• Utilities can shut off service only between the hours of 8 a.m. and 4 p.m. from Monday through Thursday.
• A utility may turn off customer service after it has given the customer written notice and waited 15 days to allow the customer an opportunity to pay the overdue bill or make a payment agreement on the overdue amount.
• If customers have not paid a bill, payment agreement installment or deposit payment, the utility must send them a Final Termination Notice before it can turn off service. The notice must state the reasons for the intended shut off, the earliest date on which a shut off might occur, the address and phone number of the utility, and customer rights. The notice can be sent 20 days after the date payment was due. After the notice has been sent, the utility must allow 15 days for the customer to resolve the problem before it can shut off service.
• The utility has to turn service back on within 24 hours, where possible, when the customer has paid the amount due or signed a payment agreement and made the down payment, if required; when the local Department of Social Services agrees to make a direct payment on the customer's behalf or provides a written guarantee of payment; where the utility is notified that serious harm to health or safety is likely to result if service is not reconnected; or when directed by the PSC.

• Utilities must offer customers in danger of disconnection a deferred payment agreement with terms suited to the customer’s financial situation. Payment agreements must offer installment payments as low as $10/month. However, the utility can refuse to offer a payment agreement when it believes customers can pay the amount they owe and, after its own investigation, the PSC also determines that customers have the ability to pay what they owe.
• A utility may offer specific payment agreement terms, but customers do not have to accept what it proposes. They can write their own payment terms. However, these terms must be based upon customers' ability to make payments on what they owe as well as full payments on current bills. The utility must accept any terms that are fair and equitable, considering customers' financial circumstances; however, it can refuse any terms that allow customers to pay less than $10 a month on what they owe.
• Unless customers agree to large installment payments, their monthly installments on a payment agreement cannot be more than half of their average monthly utility bill, or 10% of what they owe, whichever is greater. Should customers' financial situation change due to circumstances beyond their control, they can ask the utility to change the agreement to make sure that the terms are reasonable.

Customer service

• The PSC requires that electric suppliers offer reasonable customer protections, such as a statement disclosing the ESCO's complaint resolution process, a 15-day notice before discontinuing service, customer choice of service from another ESCO or the utility when an ESCO discontinues service, clear procedures for switching suppliers, and convenient complaint handling.
• During the transition to competition, the PSC will track the complaints it receives about electric suppliers. The PSC has the authority to revoke an electric supplier's eligibility to do business if an excessive number of legitimate complaints against it are received.
• A utility can refuse to provide service if customers owe money on a previous account in their name, unless one of the following situations applies: customers pay the amount in full; customers make a payment agreement to pay off the amount in installments; customers have a pending billing complaint with the utility concerning the amount that has not been paid; customers receive or have applied for public assistance, Supplemental Security Income or additional State payments, and the local social services office has agreed to pay for amounts owed on customers' previous account and to provide the utility with a guarantee of future payments on a customer's new account; or the PSC directs the utility to provide service.
• If the utility denies a customer's application, it must sent the customer a notice within three business days of the date of application informing the customer of the reasons for the denial; the steps to take to obtain service; and customer rights to a PSC review of the denial.

Deposits/fees

• Residential customers may be required to pay a deposit if they did not pay two or more utility bills in a row without making a partial payment of at least half of the amount owed; if they had service shut off for non-payment of bills within the past six months; or if they are short-term or seasonal customers. (A short-term customer wants service for less than a year. A seasonal customer receives service periodically each year.)
• The utility must warn customers in writing, 20 days in advance, that if they do not make a timely payment they make have to pay a deposit. Utilities cannot require a deposit from recipients of public assistance or Supplemental Security Income. Utilities cannot require a deposit from customers who are 62 years old or older, unless their service has been shut off for failure to pay a bill within the past six months.
• Deposits cannot be more than twice the average monthly bill (or twice the estimated average monthly heating season bill, for heating customers). Seasonal or short-term customers who must pay a deposit can pay it in installments over a period of at least 12 months.
• Utilities must pay interest on deposit money. They have to refund the deposit plus interest if, after a year, customers have not been behind in their payments.

Billing and collections

• Bills from both utilities and electric suppliers separate (unbundle) charges. Customers who choose an electric supplier may receive two bills, one from the supplier for electricity and other products and one from the utility for its services. Other options are possible -- the utility may bill on behalf of the supplier and include the supplier's charges in its bill, or the supplier may bill on behalf of the utility and include the utility's charges in the supplier's bill. Regardless, customers will always have access to their usage and billing history, and that information can only be released by the utility with their permission.

Supplier licensing

• Both electric and natural gas suppliers must conform to uniform retail access regulations governing business practices between utilities and suppliers. Suppliers must satisfy utility credit requirements, either by proving that they have a satisfactory credit rating or by posting a security deposit or collateral.

• Energy suppliers must provide evidence of meeting the minimum bond rating from an independent rating agency before they can offer prepayment plans for electricity or natural gas supplies.

Slamming

• In order for a switch to be valid, a competitive supplier must receive authorization from a customer, the documentation of which must be retained for 6 years. Agreement can be in the form of either a written agreement signed by the customer, a written statement by an independent third party that witnessed or heard a verbal commitment by the customer, a tape recording of the customer’s verbal commitment made by the competitive supplier, or an electronic transmittal that can be shown to have originated with the customer.

Dispute resolution

• Customers who doubt the accuracy of any bill or deposit amount, or have a service problem, can call their utility and complain about it. If the complaint involves a financial matter, utility service cannot be disconnected for non-payment of that disputed amount while the complaint is being investigated and for 15 days after the decision on the complaint has been made by the utility. However, if customers owe an amount other than the disputed amount, the utility can take action to terminate service for non-payment of the undisputed amount.

Privacy

• Historical customer data will be provided by distribution companies to customers or their authorized designees. All historical data that a competitive supplier receives from the distribution company must be kept confidential, unless authorized for release by the customer. A distribution company cannot disclose customer information to competitive suppliers if the customer has notified the distribution company in writing that he does not authorize release. Thereafter, customer information can only be released to a competitive supplier with the customer’s written authorization.