NEW YORK (WWTI) – To protect consumers from surprise price increases to their energy bills Governor Kathy Hochul signed legislation that requires energy service companies to obtain the consent of the customer before any material price increases.

“My administration continues to take action to make energy more affordable in New York State, and with this legislation we are taking a significant step toward protecting consumers from surprise price increases to their energy bills.”

Governor Kathy Hochul

Legislation A.703-A/S.683-A is intended to protect customers from surprise price increases to their energy bills from energy service companies.

It is an amendment to the General Business Law which would require the consent of the customer to declare a change in the price or type of price for an energy service to be a “material” change.

Also included in the bill, is a condition that the energy provider shares information about:

  • The current price of services;
  • Any proposed price changes;
  • Distribution prices; and
  • Where the customer may view past bills if there is to be a material change.   

An energy service company — ESCO — is an entity permitted to sell electricity and/or natural gas to customers using the transmission or distribution system of a utility. About 1.6 million customers — including 900,000 electric and 700,000 gas customers — get their energy supply from an ESCO. For comparison, there are more than 7.2 million electric customers and about 4 million natural gas customers who receive their supply from a traditional utility.

Utility supply and ESCO supply pricing fluctuates with global commodity prices and the Public Service Commission regularly reports on supply price forecasts before winter heating and summer cooling seasons. The Commission also requires utilities to have robust communication about price forecasts with their customers. This legislation also helps to provide additional Petroleum Service Corporation oversight of ESCO supply pricing to protect and educate customers. 

New York’s utility regulator The Public Service Commission, has long been critical of certain ESCOs, particularly regarding prices. To maintain eligibility to operate in New York Every ESCO must comply with the New York Uniform Business Practices guidelines and with all applicable orders from the Public Service Commission. ESCOs must also file annual compliance reports by January 31 every year.

Failure to comply with the rules laid out by New York State could result in losing the ability to operate here. In 2019, the Commission required that future variable-rate contracts from ESCOs be no more than 5% higher than the prior 12 months’ average cost for the commodity.