By William Opalka

ALBANY, N.Y. — New York regulators on Thursday refined their rules on how municipalities can aggregate customers to purchase gas and electricity and rejected a request that the program abandon its opt-out structure (14-M-0224).

The New York Public Service Commission’s Community Choice Aggregation program is part of the state’s Reforming the Energy Vision initiative to encourage the greater use of cleaner and distributed energy resources. The CCA was approved in April, building on a pilot program that was still being organized but did not fully launch until June. (See NYPSC OKs Municipal Aggregation for Energy Purchases.)

Opt-In vs. Opt-Out

The commission rejected complaints that the CCA program is premature. “Given the potential benefits of CCA programs, and the continued operation of retail energy markets while the commission considers further action, delaying the authorization of CCA programs is unnecessary and even potentially harmful,” the order said.

Thursday’s order denied National Fuel Gas Distribution’s request to switch the CCA from an opt-out to an opt-in process. The company said the PSC should require customers to opt into the program because uncertainty exists over the development of the retail market.

In an opt-out program, all customers are enrolled and, after an outreach program run by the municipality is launched, customers are required to notify it if they want to remain with the host utility.

“If we required opt-in, we’d be killing this idea before we gave it a fair chance to succeed,” Commissioner Gregg Sayre said at the PSC’s Thursday meeting.

“Our experience in the retail market and in other states is that the opt-out is necessary for CCA programs to be successful,” Assistant General Counsel Ted Kelly said. New Jersey’s aggregation program failed to gain traction until it switched from the opt-in model, he said.

New York City Wins Clarification

The commission also granted New York City’s request for clarification that the original order did require the CCA to be implemented citywide. The commission agreed with the city that rolling out a new program in large geographic areas with dense populations would prove unwieldy, allowing the city to introduce the changes in stages.

The PSC said the CCA order was intended to provide municipalities flexibility. “Allowing municipalities to implement CCA programs on a partial or phased basis is consistent with this design. Municipalities may choose a partial or phased approach as a pilot of CCA, to manage the implementation process given a large geographic footprint or overlapping jurisdictions, or for another reason beneficial to their program,” the commission said.

The commission also clarified that each implementation plan submitted by a municipality or CCA administrator will be open to public comment and said utilities can exclude customers’ phone numbers from data sent to municipalities, bowing to privacy concerns. The PSC said a multicounty CCA has been proposed by the Municipal Electric and Gas Alliance to eventually serve roughly 500,000 residents in 11 counties from the Finger Lakes to the Hudson Valley.

Westchester Pilot Operating

Meanwhile, the state’s first pilot program, by Sustainable Westchester, has been operating for three months, officials said.

The pilot, dubbed Westchester Power, has about 91,000 customers in more than 20 municipalities. Westchester Power has negotiated to buy electricity at a bulk, fixed price and started enrolling customers in June.

LuAnn Scherer, acting director of the PSC’s Office of Consumer Services, said the commission asked Consolidated Edison to provide an early glimpse of consumer reaction. The company sampled about 1,500 customers. While savings are not guaranteed, customers have saved an average of $10/month in the pilot program, Scherer said.

She said the program has received 14 complaints, mostly related to customers misunderstanding some line items on their new utility bills.

“One of the lessons is that municipalities are going to have to do more for customer education,” Scherer said.

Sustainable Westchester’s first report to the PSC is due in June 2017.

“It’s early, but at least we know we’re headed in the right direction,” PSC Chair Audrey Zibelman said.

Commissioner Diane Burman – who opposed the original CCA order, saying a statewide rollout was premature – abstained Thursday. “While my concerns still are there, I do embrace working through them in a robust way on the work ahead,” she said.