New York State opened the State’s electric and natural gas industries to competition in the 1990s. Changes in the markets have provided an opportunity for consumers to choose who provides their energy supply – either their utility or a third-party supplier know as an Energy Services Company (ESCO).
What is an Energy Services Company or “ESCO”?
- An ESCO is an entity eligible to sell electricity and/or natural gas to customers using the transmission or distribution system of a utility.
- The NYS Department of Public Service (DPS) requires ESCOs to complete an application process before serving customers.
- View this list of eligible ESCOs or reach out to your local utility.
Why are there ESCOs in NYS?
- New York State opened the state’s electric and natural gas industries to competition in the 1990s. Changes in these markets have provided an opportunity for consumers to choose their supplier of energy.
Switching to an ESCO
Why should I consider switching to an ESCO?
ESCOs are competing for your business. As a result, there may be a wide variety of products and price options available to customers shopping for energy supply.
- Pricing: Supply service may be offered as a variable or fixed rate. With a variable rate, the cost of electricity and natural gas can change monthly based on market conditions, similar to the energy service offered by your utility. Effective April 16, 2021, a variable rate product must guarantee a savings on an annual basis, or with greater frequency, and provide a credit to the utility account or refund if they exceed what you would have paid your incumbent utility.
A fixed rate is one that remains the same for some specified amount of time regardless of changes in market prices. Fixed rates may be offered for up to 3 months, 6 months, 1 year or longer. Some customers may prefer fixed rates because they can anticipate their monthly supply costs, while others like the possibility that a variable rate will result in lower payments when market conditions are favorable. Effective April 16, 2021, a fixed rate product is limited to a price no greater than the trailing 12-month average utility supply rate plus a premium of no more than 5%.
Energy-Related Value-added services: Certain ESCOs have been approved to provide an energy-related value-added product to consumers. The only energy-related valued-added products allowed at this time are HVAC (heating/air conditioning) or electrical/plumbing home warranty products. There is no price cap and the company does not need to guarantee a savings.
Variable and Fixed Renewable Products: These products must meet current Clean Energy Standard (CES) requirements. There is no price cap and the company does not need to guarantee savings.
What happens if I decide not to switch to an ESCO?
- There is no requirement that customers switch to an ESCO. If you decide not to switch, your utility will continue to provide you with electricity or natural gas.
How do I decide what ESCO is right for me?
- Switching to an ESCO begins with comparing prices and services offered by the ESCOs in your area. Visit the Department of Public Service’s Power to Choose website to learn about ESCO offers for residential customers. Visit each ESCO’s website directly to get complete information on all offers available and the most up-to-date rates. You can also review the Department’s Complaint Statistics Report for information about ESCOs complaint rate data.
- Always review the terms and conditions (such as contract length, special fees, deposits, etc.) of service before committing to an ESCO offer.
Signing an ESCO Agreement
What are the key things I should know before signing an agreement with an ESCO?
- If you decide to switch to an ESCO, it is important to know your rights as described in the ESCO Consumer Bill of Rights.
- Residential customers have the right to rescind an agreement within three (3) days of receiving the agreement without a penalty.
- If an ESCO guarantees savings, it must be provided in writing on the agreement in the customer disclosure statement.
- Always review the written terms and conditions of the contract before signing. Important information, such as the length of the contract, renewal provision and fees are listed in the terms and conditions.
- ESCOs can charge an Early Termination Fee (ETF) for canceling a contract before the end of term date. Make sure to check your customer disclosure statement to find out if there is an ETF associated with your contract.
What happens after I sign an agreement?
- The ESCO is required to give you a copy of the agreement including the terms and conditions and ESCO Consumer Bill of Rights.
- If you enroll with an ESCO by telephone or in-person (door to door), you will be asked to complete a Third Party Verification (TPV). A TPV is a recording verifying a customer’s enrollment with an ESCO through an independent vendor. The sales agent should not be present (in your home or on the call) when you complete the TPV.
- If you did not intend to sign up with an ESCO, or if you changed your mind, do not complete the TPV.
- You will receive a verification letter from your Utility that you have chosen an ESCO to supply your energy. If the ESCO listed is not one you chose, or you did not intend to switch to an ESCO, contact your Utility immediately.
- When you receive your bill, make sure the ESCO you chose is correctly identified in the supply portion of your bill. If it is incorrect or you have any questions about your bill, you should contact the consumer information numbers listed on the bill(s).
- If you decide to cancel your agreement, call the ESCO immediately and obtain a cancelation number. It may take several weeks to be returned to the Utility depending on the date of enrollment. Check your agreement to see if an Early Termination Fee applies.
- If you are unable to reach your ESCO, you can ask your Utility to terminate your ESCO service.
Are there protections for ESCO customers?
- Yes. To serve residential customers in NYS, ESCOs must comply with Home Energy Fair Practices Act (HEFPA), which requires that all utility customers be treated fairly with regard to application for service, billing and complaint processing.
- Additional information about the consumer protections can be found in the ESCO Consumer Bill of Rights. ESCOs are required to provide a copy of the Consumer Bill of Rights to prospective customers.
- It is unlawful for your energy supplier to be switched without your approval. If a switch has been made without your authorization, please contact the Department of Public Service’s complaint hotline at 1-800-342-3377 or file a complaint online.
- Your utility will continue to deliver your energy and respond to all emergencies even if you switch to an ESCO.
- If you have an unresolved complaint regarding an ESCO, you can contact the Department at 1-800-342-3377 or visit the File a Complaint page.
- General questions regarding ESCOs and Power to Choose can be emailed to: [email protected].
- You can always switch back to your utility if you are not satisfied with the ESCO you chose.
- If you do not want to switch to an ESCO you can contact your utility to have a block placed on your account.
Rules regarding ESCO marketing techniques
If an ESCO solicits you through in-person sales, the sales agent must
- immediately identify who they are, what ESCO company they represent and notify you that they are not with the utility
- produce identification – an ID Badge must be worn at all times and must have the agent’s name, photo, ESCO company name and telephone number; provide you with a business card that contains the name of the sales agent, the ESCO represented, a contact number for the ESCO and date and time of the visit; and,
- provide you with a copy of the ESCO Consumer Bill of Rights.
If there is an apparent language barrier, the sales agent must
- find a sales representative in the area that speaks the same language;
- supply you with materials that are in your native language; and,
- if the sales agent does not speak the language of the customer and/or does not have handouts in the native language, they are to terminate the sale.
A customer can request that the ESCO marketer leave the premises at any time.
If an ESCO contacts you by phone, the sales agent must:
- Immediately identify who they are, what ESCO they represent and notify you that they are not with the utility;
- state the purpose of the call;
- remove your name from the marketing database upon your request;
- notify you of the ESCO Consumer Bill of Rights and where you can find it online, and provide you with a copy with any written material they discuss with you; and,
- provide you with materials in your native language.
A customer can terminate a call at any time.
Low Income Participant
Energy Services Companies (ESCOs) that meet certain criteria set forth by the Department of Public Service may petition the Commission to serve low income customers in New York State. If you are a low income customer, also known as Assistance Program Participant or APP customer, and would like to find out if an ESCO serves in your service territory, you can click on the "I Am a Low Income Participant" box on the Power to Choose home page and enter your zip code for a listing of approved providers.