United States: Albany County Supreme Court Vacates New York PSC Reset Order Related To Retail Electric Supply Companies

A New York Supreme Court recently vacated the New York Public Service Commission's order that would have significantly altered the structure of the New York retail electric market. Although vacated, the matter has been remanded to the Public Service Commission for further proceedings, and it remains to be seen if the deficiencies the court identified will be remedied.

On July 22, 2016, the Supreme Court for Albany County, New York, vacated certain provisions of the Order Resetting Retail Energy Markets and Establishing Further Process (the "Reset Order")1 issued by the New York Public Service Commission ("PSC") earlier this year. Although the court did not consolidate the matters, the Supreme Court's order (the "Court Order") addressed three separate petitions filed by various industry groups (the "Petitioners") making substantially the same arguments and seeking substantially the same relief.2

Background The PSC issued the Reset Order in February 2016, which mandated compliance by the affected market participants within 10 days of its issuance. The Reset Order fundamentally altered the retail electricity market landscape in New York by, among other things, requiring electric service companies ("ESCOs") to enroll or renew residential or small commercial customers (so-called mass market customers) only if either of the following two conditions are met: (a) the contracts must provide guaranteed savings in comparison with what the customer would have paid as a full service utility customer; or (b) the contracts must provide for service comprising at least 30 percent renewable electricity.3

Along with the two conditions referenced above, the provisions required that (a) ESCOs receive the affirmative consent from existing mass market customers from a fixed price or guaranteed savings contract, to one meeting the alternative, renewable content contract; and (b) ESCOs certify in writing to the PSC that their new enrollments or renewals of mass market customers complied with the Reset Order.4

Further, the PSC issued guidance documents to the market related to the Reset Order's implementation, and invited comments regarding the Reset Order being submitted (albeit after the Reset Order's implementation).5 The Petitioners sought and were granted, in early March 2016, a temporary restraining order related to the three Reset Order provisions.6

Arguments The Petitioners argued that they had no notice of the scope and sweeping nature of the Reset Order, let alone the immediate transformation it directed.7 The Reset Order lacked any rational basis, the Petitioners claimed, and was not supported by substantial evidence. It therefore, according to the Petitioners, amounted to arbitrary and capricious action by the PSC.8 Further, and along with arguments based on the New York State and United States Constitutions, Petitioners urged the court to hold that, unlike its authority with public utilities, the PSC does not have authority to set rates for ESCOs.9

For its part, the PSC countered the Petitioners' arguments by pointing to its broad statutory authority and discretion over the competitive retail electric market.10 It argued that its authority with public utilities (i.e., generation providers and transmission and distribution companies) encompassed the authority to regulate an ESCO's access to those public utilities.11 At its core, the Reset Order appears to reflect the PSC's view that, despite various tax breaks, ESCOs are unable to undercut the prices that regulated utilities are able to offer mass market customers, and that ESCOs too frequently utilize underhanded tactics with those customers.12

The Court Order The Court Order upholds the Petitioners' arguments on virtually all points. As evidence of the arbitrary and capricious nature of the PSC's action, the Court Order points to the much narrower scope of the hearing at which the Reset Order was considered, and held that the scope that was considered therefore failed to give Petitioners sufficient notice.13 It likewise considered the PSC's actions after the Reset Order's implementation as evidence of its arbitrary and capricious nature.14 Among the PSC's post-implementation actions, the Court Order discusses the PSC's invitation for comment after the Reset Order's implementation, and its later attempt to base its action on premises not cited before the hearing.15

In spite of its vacatur of the Reset Order's three provisions referred to above, the Court Order departed from the Petitioners' argument in one significant respect. The Court Order seems to diverge from Petitioners' view as to the scope of the PSC's authority, stating that it "defies logic" that the PSC would be unable to regulate prices charged by ESCOs.16 The Court Order remands the matter to the PSC for further proceedings consistent with the Court Order.17

Conclusion Whether the PSC will appeal the Court Order, or will instead attempt to correct the deficiencies identified by the Supreme Court, is not yet certain. ESCOs, companies that supply electric power to ESCOs in New York, and other market participants, should carefully review the Court Order and any resulting litigation or rulemaking to properly plan for any ensuing business contingencies. The holding that the PSC can regulate an ESCO's rates should also be given consideration, as there is not yet a clear picture of the framework with which the PSC would review those rates.

  1. In the Matter of Eligibility Criteria for Energy Services Companies, Order Resetting Retail Energy Markets and Establishing Further Process, PSC Case 15-M-0127, et al. (Feb. 23, 2016).
  2. Nat'l Energy Marketers Ass'n, et al. v. N.Y. Public Service Comm'n, et al., No. 868-16, 2016 WL 4004502 (N.Y. Sup. Ct. July 22, 2016) [hereinafter Order]. The scope of this alert is confined generally to the Order. Accordingly, and for purposes of brevity, background facts and the circumstances of the underlying petition are cited to the Order.
  3. See Reset Order at *14.
  4. Id.
  5. In the Matter of Eligibility Criteria for Energy Services Companies, Notice Seeking Comments on Resetting Retail Energy Markets For Mass Market Customers, PSC Case 15-M-0127, et al. (Feb. 23, 2016)
  6. Order at *4.
  7. Id. at *5-*7.
  8. Id.
  9. Id. at *6.
  10. Id. at *8-*9.
  11. Id.
  12. See id.
  13. Id. at *10-*17, *20.
  14. Id. at *10-*13, *21.
  15. Id.
  16. Id. at *13-*15.
  17. Id. at *23.

This article is presented for informational purposes only and is not intended to constitute legal advice.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions