New York ESCO crackdown challenged in court


Energy service companies — better known as ESCOs — are waging a court battle over their right to stay in business in New York.

A state Supreme Court judge in Albany on March 4 stayed a Public Service Commission order cracking down on the companies. That means ESCOs can continue to sell their products while their legal challenge is pending. The stay remains in effect at least until Albany Supreme Court Judge Kimberly O’Connor holds a hearing on the case, now set for April 14.

A decision by the commission February 20 said in sum that ESCOs not selling renewable or “green” energy plans must guarantee prices lower than the default plans offered by Con Edison and other utilities. That will effectively shut many New York ESCOs that promise residential customers a better deal on their electric and gas bills. Several studies have shown that despite the promises, ESCO customers pay more than those who stick with their utilities’ plans.

The Retail Energy Supply Association, an ESCO industry group, says the Public Service Commmission has “effectively eliminated the right of residential and small commercial customers in New York to choose among competitive energy offerings.” It called the stay issued by Albany Supreme Court Judge Kimberly O’Connor “great news for consumers as it protects their right to freely decide for themselves what energy products offer value.”

The Public Service Commission sees the stay as a temporary measure. “This preliminary ruling is merely procedural — it does not address the merits of the PSC’s order,” said commission spokesman James Denn.

In court papers, the ESCOs gripe the commission’s February 20 order took them by surprise. The commission’s decision came in a case set up last year as a review of “requirements that Energy Service Companies (ESCOs) must satisfy when providing electric or gas services in New York State.” Those words “did not put Petitioners [ESCOs] on notice of the requirements now being imposed,” their lawyers complain.

Maybe. But the commission’s action is no surprise to anyone who has followed the issue. It followed years of ESCO intransigence over the state’s efforts to make their pricing more transparent. It also comes amid a spike in consumer complaints against ESCOs. In January 2016, the state collected 592 consumer complaints about ESCOs, 29 percent more than the 459 complaints it collected in January 2015. The commission has also stepped up enforcement against some ESCOs’ shady business practices. Now a judge will decide if the state is right to crack down.


About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, and Politico New York. Twitter: @wpsanderson.
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One thought on “New York ESCO crackdown challenged in court

  1. Dan gale says:

    Many of these Escos are financed from other countries like China and have no other intent but to rip off the USA. Get rid of these companies and their deceptive practices.