Albany Times Union
June 3, 2006
By Larry Rulison

ALBANY – The state Public Service Commission is floating a proposal that would require companies selling natural gas and electricity to residential customers to provide prices so consumers could comparison-shop.

These companies—also known as energy service companies, or ESCOs—are not required to divulge their prices to the commission. The proposal was made in a notice issued Wednesday asking for public comment.

"This is a very positive development," said Gerald Norlander, executive director of the Public Utility Law Project of New York, an Albany-based consumer advocacy group. "We support the commission in this initiative because a competitive market depends upon customers having accurate pricing information."

Last month, the Times Union published an investigation of ESCO electricity pricing that found it was nearly impossible for consumers to get accurate pricing information from the ESCOs, making it difficult to comparison-shop.

The PSC operates a site (http://www.powertochoose ny.com) designed to help residential customers compare pricing between their utility and ESCOs. Many of the ESCOs do not provide pricing information to the site, although the PSC has been working get them to provide it voluntarily.

ESCOs moved into New York after the state deregulated its energy market in the late 1990s. As part of that process, the PSC wanted utilities like National Grid to get out of the electric generation business.

It has also pushed the utilities to get out of the business of selling the actual commodity, or supply, as a way of developing a robust competitive market. And it has encouraged both business and residential customers to get their energy supplies from ESCOs.

But that movement has been slow to come. Fewer than 10 percent of all gas and electric customers in New York use ESCOs, although business customers have embraced the concept in large numbers.

The PSC notice said the competitive energy market for residential customers "could be furthered" if more pricing information was included on the PSC Web site and other sources.

One of the ESCOs that does provide pricing information on the PSC Web site is MxEnergy Inc. of Stamford, Conn. The company's residential electric rate was posted on the site Friday as 7.24 cents per kilowatt hour, compared with 7.12 cents per kilowatt hour for National Grid.

Pamela Fink, a spokeswoman for MXenergy, said the company supports the commission's idea.

"Our feeling is that everyone should be forthcoming," she said.

However, she said the company would like to be able to change the price listed on the PSC Web site as much as it needs to reflect current rates. The energy markets are extremely volatile and prices generally fluctuate each day.

Many ESCOs have said price volatility is the reason behind their reluctance to post prices with the PSC.

PSC spokesman David Flanagan declined Friday to elaborate on the notice and said there was no deadline for the commission board to consider any proposal that comes out of the comment period.

If price reporting requirements are adopted by the commission, those who defy the order may face penalties.

"Some ESCOs may be unwilling or unable to comply with a price reporting requirement, if one is adopted," the PSC notice said. "An enforcement mechanism might be needed to ensure ESCO compliance."

The notice said the commission staff is authorized to determine if an ESCO should no longer be permitted to sell electricity or natural gas in the state, and that "it may be appropriate" to use that process to enforce compliance with reporting requirements. Rulison can be reached at 454-5504 or by e-mail at lrulison@timesunion.com.