The New York PSC denied rehearing of its prior order suspending the ability of Flanders Energy LLC to market to and enroll new residential and non-residential customers

See details on the prior order here

Flanders (Petitioner) had filed for rehearing, alleging that its suspension reflects disparate treatment versus other ESCOs which had faced similar show cause orders from the PSC, and also alleging errors in material fact in the PSC's order

As summarized by the PSC, "Petitioner also claims that the Commission has not uniformly applied the same standard in determining consequences imposed upon an ESCO for non-compliance. This claim also lacks merit. First, the UBP sets forth the Commission’s clearly established parameters to be used when considering consequences for noncompliance with the UBP, including the scope of harm to individual customers, and the gravity of the non-compliance."

The PSC said on rehearing that, in contrast to other ESCO cases, "the findings set forth in the Suspension Order demonstrated that Flanders actions since the NOAF and Show Cause Order warranted suspending its ability to market to and enroll new customers."

"Here, Flanders asserts that the Commission ignored Flanders’ enhancements to its internal compliance protocols and marketing processes, which it suggested are similar to those changes made by other ESCOs whose ability to market to and enroll new customers were not suspended. However, such protocol enhancements are not dispositive. Whether or not Flanders made certain improvements to its protocols does not negate the actions observed since the Show Cause Order. It was those post-Show Cause Order actions that resulted in the Suspension Order. The Commission must take into account the nature, circumstances and the scope of harm to customers, the gravity of the non-compliance, and, as in this case, the experience with the particular ESCO’s behavior following the NOAF and Show Cause Order. Every ESCO investigation is unique, requiring consideration of a wide range of information with which the Commission must consider when evaluating the facts of each particular case," the PSC said

Flanders alleged that the PSC erred in concluding that Flanders enrolled customers after stating that it would voluntarily cease marketing to customers.

As summarized by the PSC, "Petitioner states that new customers were not enrolled after Petitioner claimed it suspended its marketing and new enrollment activity in May 2017. Rather, Flanders states, the customers who were switched to Flanders after May 2017 had been enrolled previously, and there was simply a delay in the utility switching those customers. This does not, however, account for the enrollments processed by Con Edison up to seven months after May 2017."

On rehearing, the PSC said that, "Flanders explanation does not negate the Commission’s finding in the Suspension Order."

"Flanders, before it suspended its marketing, concluded that its outside marketing agents were not following the UBP requirements for proper enrollment. Even so, and after receiving the NOAF in April 2017, Petitioner allowed pending enrollments to proceed for hundreds of customers that Flanders had reason to believe had been improperly marketed to on Flanders’ behalf. That Flanders allowed these customers to be switched, when it was aware that those customers were marketed to and enrolled by marketers that did not comply with the marketing procedures outlined in the UBP, is unacceptable. Flanders should have taken some action to assess whether the pending enrollments had been done appropriately, and if it could not ensure that the enrollments complied with the UBP, Flanders should have dropped all of the pending and suspect enrollments. Instead, even though it had already received the NOAF alleging that it was slamming customers, Flanders took no proactive measures to prevent additional slams from occurring. Thus, Petitioner’s claim regarding the post-May 2017 enrollments does not demonstrate an error of fact in the Suspension Order," the PSC said on rehearing

17-M-0415