New York Adopts Rules for ESCOs

Fortnightly Magazine - April 15 1997
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The New York Public Service Commission has adopted eligibility criteria rules for competitive retail energy services companies (ESCOs) seeking to sell electricity in the state.

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The state created the March 5 ESCO rules as part of New York's "Competitive Opportunities" proceeding. The rules are consistent with the PSC's May 16, 1996 decision to open markets to wholesale competition in 1997 and to retail competition in 1998. Consumer protections used in the present monopoly environment will be retained during the transition to competition.

The PSC said it designed the ESCO oversight price to counter potential anti-competitive behavior by incumbent utilities. Under the new rules, ESCOs must provide assurances that they are technically and financially competent, and ensure that their business practices will meet customers' needs. The rules ensure a power provider of last resort during the transition to competition, which will provide electric at market prices for those customers who choose not to change providers or who may not have access to choice. The rules avoid impediments to ESCO growth, while ensuring that ESCO default does not harm the regulated local transmission and distribution company's ratepayers. (em LB


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