By Michael Kuser

A federal appellate judge Friday stayed a New York Public Service Commission order that prohibits most energy service companies (ESCOs) from serving low-income customers (17-3361).

Judge José A. Cabranes, of the 2nd U.S. Circuit Court of Appeals, issued the stay while the court considers an appeal in a lawsuit filed by an anonymous ESCO customer who participates in New York’s energy assistance program. A federal district court had previously denied a stay and injunction in that suit, which alleges that the PSC’s order denies energy assistance program participants equal protection under the law and interferes with their right to contract. Cabranes referred the plaintiff’s motion to the next available three-judge panel.

In its brief with the court, the PSC opposed the appeal, contending that it was exercising its authority to set just and reasonable electricity rates and protect customers from overcharges.

While the commission’s December 2016 order banned most ESCOs from serving low-income customers, it left open the possibility of issuing waivers for any ESCO that promised to offer bill savings or guarantee benefits to those customers. A state appellate court earlier this year issued a temporary restraining order on the ESCO ban, which was subsequently lifted by the Albany County Supreme Court. (See Court Blocks NYPSC Order Barring ESCO Contracts.)

Right to Choose?

The plaintiff’s attorney, William J. Dreyer, argued in his brief that his client would be harmed by being forcibly “enrolled in energy programs they do not want and de-enrolled from programs they voluntarily chose.” Furthermore, the suit alleged that the ESCO restrictions could put “low-income New Yorkers in a position where they may no longer be able to pay their electric and gas bills,” and that disclosure of customers’ income levels would violate their privacy rights.

The National Energy Marketers Association reacted to news of the stay with a statement applauding “the 2nd Circuit for stopping the PSC from discriminating against low-income New Yorkers until the facts can be properly litigated before a federal three-judge panel.”

Cabranes’ ruling came one day after the commission acted on allegations of deceptive sales and marketing practices by Brooklyn-based MPower Energy, giving the company seven days to show why it should be allowed to serve low-income customers. The commission on Thursday also allowed three ESCOs to continue serving low-income customers while denying waiver requests for four other ESCOs. (See New York PSC Adopts DER Rules, Sanctions ESCOs.)