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What You Should Know Before Choosing An Energy Supplier

Your energy bill consists of two parts – delivery and supply. Your utility is responsible for delivering the energy to your home or business, as well as responding in emergencies. You have a choice of who supplies the energy that you consume, either your utility or an Energy Services Company (ESCO). Your ability to choose who supplies the energy used by your home or business provides an opportunity for you to take better control over your energy costs.

What is an Energy Service Company or "ESCO"?
Why are there ESCOs in NYS?
Do I have to switch from my utility to an ESCO?
Why should I consider switching to an ESCO?
What happens if I decide not to switch to an ESCO?
If I do want to switch, how do I decide what ESCO is right for me?
Are there any special protections for low-income customers?
The Home Energy Fair Practice Act (HEFPA) provides protections for residential customers in NYS. Are there similar protections for ESCO customers?
I know that ESCOs often use door to door or telemarketing to try to sell their products. Are there any rules in place regarding ESCO marketing techniques?
What are the key things I should know before signing an agreement with an ESCO?
What happens after I sign an agreement?
What is a Third Party Verification (TPV)?
Important Facts

What is an Energy Service Company or "ESCO"?

  • An ESCO is a company that offers electricity and/or natural gas supply to customers in NYS. An ESCO is not your local distribution utility: it does not own or operate the distribution and transmission systems that deliver energy to homes and businesses.
  • In order for an ESCO to sell energy in NYS, the NYS Department of Public Service requires the company to go through an application process and be deemed eligible to serve NYS customers. A list of eligible ESCOs is available here on our website.

Why are there ESCOs in NYS?

  • NYS 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. Competition sometimes results in lower prices and innovative new services. For example, some ESCOs may offer value-added services, such as fixed rates, electricity from renewable sources (green power), energy management products, furnace repair or maintenance service, or telephone service bundled with your energy bill.

Do I have to switch from my utility to an ESCO?

  • No. You have a choice of who supplies the energy you use. You can continue to purchase energy from your utility or you can switch to an ESCO for your electric or natural gas supply. If you decide to switch, your local distribution utility will still be responsible for delivering your energy and responding to any emergencies.

Why should I consider switching to an ESCO?

  • Given that ESCOs are competing for your business, there is a wide variety of products and price options available to customers shopping for energy supply.

    • Pricing: Basic 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. By contrast, 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.
    • Value-added services: Some ESCOs offer additional products and services for their customers. For example, some ESCOs offer the opportunity to purchase your electricity from a renewable energy source such as hydro, solar and wind. Others provide furnace repair or maintenance service. A few ESCOs also offer products that provide tools to help manage your home or business energy use. Most of these additional services are not available from your utility.

  • It is important to note that choosing an ESCO does not necessarily mean that you will save money. For only electricity and/or natural gas, some ESCOs charge more than the utility and some ESCOs charge less. In addition, some value-added services like green power may increase your bill. If an ESCO guarantees that you will save money, the guarantee must be in writing on your agreement.

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.

If I do want to switch, how do I decide what ESCO is right for me?

  • Compare prices and services offered by ESCOs. Visit the Department of Public Service’s Power to Choose website at: http://www.newyorkpowertochoose.com to learn about ESCO offers for residential and small commercial customers. Visit each ESCO’s website directly to get complete information on all offers available and the most up-to-date rates. Review the Department’s Complaint Rate Scorecard and 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.

Are there any special protections for low-income customers?

  • Yes. Customers participating in utility low income assistance programs can only sign up for ESCO products that guarantee savings over what the customer would have been charged by the utility, or that provide energy-related services that are designed to reduce a customer’s overall energy bill. Not all ESCOs meet these requirements.

The Home Energy Fair Practice Act (HEFPA) provides protections for residential customers in NYS. Are there similar protections for ESCO customers?

  • Yes. To operate as an ESCO in NYS, companies must register with NYS DPS. They must meet certain eligibility requirements such as establishing complaint handling procedures similar to HEFPA.
  • Additional information about the consumer protections can be found in the ESCO Consumer Bill of Rights available on the DPS website. ESCOs are required to provide a copy of the Consumer Bill of Rights to prospective customers.

I know that ESCOs often use door to door or telemarketing to try to sell their products. Are there any rules in place regarding ESCO marketing techniques?

Door to Door Sales:

If an ESCO solicits you through door to door 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 or similar document 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 English is not your first language, the sales agent must:

  1. find a sales representative in the area that speaks the same language;
  2. supply you with materials that are in your native language.
  3. 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 door to door sale.

* A customer can request that the ESCO marketer leave the premises at any time. *

Telephone Sales:

If an ESCO contacts you by phone, the sales agent must:

  1. provide their name and ID number upon request;
  2. state the name of the ESCO they are calling on behalf of;
  3. never imply they are acting on behalf of the utility;
  4. state the purpose of the call;
  5. remove your name from the marketing database upon your request;
  6. 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,
  7. provide you with materials in your native language.

* A customer can terminate a call at any time. *

What are the key things I should know before signing an agreement with an ESCO?

  • As noted, 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 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 contract, renewal provisions and fees are listed in the terms and conditions.
  • Many ESCOs charge an Early Termination Fee (ETF) for canceling a contract before the end 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, you will be asked to complete a Third Party Verification (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.

What is a Third Party Verification (TPV)?

  • A TPV is a recording verifying a customer’s enrollment with an ESCO through an independent vendor.
  • If a door to door solicitation results in a signed contract, you will receive a phone call after the sales agent has left your premises. You will be asked to answer certain questions to verify that you enrolled with the ESCO.
  • If a telephonic sale has resulted in an agreement, you will be asked to complete a TPV after the sale to verify that you enrolled with the ESCO.
  • The sales agents should not be on the TPV call and should never answer any of your questions or tell you what to say.
  • If you did not intend to sign up with an ESCO, or if you changed your mind, do not complete the TPV.

Important Facts:

  • 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.
  • 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.
  • General questions regarding ESCOs and Power to Choose can be emailed to: powertochoose@dps.ny.gov
  • You can always switch back to your Utility if you are not satisfied with the ESCO you chose.

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