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For Immediate Release: 12/04/2024
Rory M. Christian, Chair Contact:
James Denn | James.Denn@dps.ny.gov | (518) 474-7080 24104 December 04, 2024
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PSC Secures $1.5 Million Financial Settlement in ESCO Court Case |
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25,000 Impacted Customers of Columbia Utilities Will Share Financial Award ALBANY — The New York State Public Service Commission (Commission) today announced that an energy services company or ESCO operating in the Mid-Hudson region will pay a settlement of $1.5 million for failing to provide low-cost renewable energy to customers, as promised. The settlement, approved by an Ulster County Supreme Court judge, will be distributed to impacted customers of the ESCO.
“The Commission remains watchful of ESCO programs so that they can benefit consumers, provide market transparency and integrity, and advance state energy goals,” said Commission Chair Rory M. Christian. “When an ESCO fails to adhere to its promises, the Commission will take swift action to protect customers.”
As a result of this legal action, Columbia will pay a total of $1.5 million into a settlement fund that, after the deduction of expenses, will be used for the benefit of affected ratepayers. In exchange for this settlement payment, the Commission and the other parties would agree to resolve all regulatory enforcement actions related to Columbia’s participating in and conduct relating to the CCA program. As a result of this settlement, approximately 25,000 utility customers in the Hudson Valley will share in the financial settlement with Columbia. The payout will range from $40-$50 per affected customer after legal fees.
In 2021, Columbia Utilities Power, LLC, an ESCO, entered into multiple electricity supply contracts with 10 municipalities located in the Hudson Valley — the cities of Beacon and Poughkeepsie, the towns of Clinton, Marbletown, Philipstown, New Paltz, Red Hook, and Saugerties, and the villages of Cold Spring and New Paltz — to support a Community Choice Aggregation (CCA) plan sponsored by Joule Assets, Inc. as the CCA administrator.
The electricity supply agreements contractually obligated Columbia to provide a fixed price per kilowatt-hour for participating customers within the municipalities for a three-year term: July 1, 2021 to June 30, 2024. The agreements also required that 100 percent of the energy supplied to municipal residents must come from renewable energy sources. The agreements locked in a price for participating residential customers. By contrast, the local utility Central Hudson Gas & Electric Corporation’s standard rate during this time was approximately 35 percent higher than the rates contemplated in the agreements with Columbia as part of the Joule CCA program.
One year later, on July 18, 2021, the New York State Independent Operator (NYISO) terminated Columbia’s rights to participate in NYISO-administered market in New York State as a result of Columbia’s failure to post approximately $3.5 million in collateral to comply with NYISO’s creditworthiness requirements. Columbia’s customers, who originally were promised three years of renewable energy at a favorable fixed price, reverted back to the default utility service, Central Hudson, at a higher retail market rate. Columbia remains in business in New York after the settlement.
On June 3, 2022, Joule, the CCA administrator, and the 10 municipalities banded together to bring a civil action alleging breach of contract and other claims against Columbia in Ulster County Supreme Court. On June 6, 2022, the Commission intervened in the action, to seek redress for affected ratepayers.
If you have difficulty understanding English, please call us at 1-800-342-3377 for free language assistance services regarding this press release.
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