The New York Public Service Commission (“PSC”) appears to be creating a new Office of Investigations and Enforcement (“OIE”) and has posted a job listing for a Director of OIE (“Director”) who would report to the CEO of the Department of Public Service (“DPS”), as well as the Chairman of the PSC. The Director would be tasked with managing the OIE’s efforts in investigating and enforcing the regulations promulgated pursuant to §25 and §25-a of the Public Service Law. This mandate may include a vast field of public utilities and comes at a time when New York is in the midst of updating its complex Value of Distributed Energy Resources mechanism, which regulates electric utilities in their dealings with the ever-increasing number of privately owned distributed energy resources.
The exact structure and role of the OIE is unknown at this time, but experiences of other states may be informative for the new Director. Pennsylvania, for example, has a similarly named Bureau of Investigation and Enforcement (“BIE”) which has a comparable mandate to enforce utility compliance with laws and regulations while also providing expertise and support to other offices. The Pennsylvania BIE deals with a wide variety of matters, such as investigating public utility tariff changes, enforcing violations of the Public Utility Code by individuals lacking proper certificates and making recommendations to the Pennsylvania Public Utility Commission on how to proceed with certain dockets. Complaints involving electricity prices, unregistered taxi services and railroad safety concerns have all been handled in part by BIE. Most recently, BIE is investigating a gas line incident in Beaver County, PA which led to the complete destruction of one home and the evacuation of 30 others.
The job application for the Director in New York placed particular emphasis on electric and gas safety as well as utility reliance and consumer protection, which fits into the DPS/PSC’s mission statement of ensuring “affordable, safe, secure, and reliable” access to utilities. This posting comes shortly after national attention was focused on the September 13 gas line explosion in Massachusetts following the failure of a utility’s pipeline. The Director will be tasked with ensuring that such failures are prevented through proactive enforcement of existing regulations and making suggestions for new legislation to aid in its mission.
At this time, the OIE’s relationship with the retail energy and distributed generation (“DERs”) markets is unclear, as the precise application of §25 and §25-a of the Public Service Law (“PSL”) to ESCOs and DERs remains an unsettled matter at the PSC. While PSL §25 has traditionally been understood to apply solely to utilities and not to ESCOs, the PSC has contemplated and discussed how to extend its application to the retail energy market. In February 2016, the PSC issued a Notice Seeking Comments on Resetting Retail Energy Markets for Mass Market Customers in which it sought comments on the application of §25 to ESCOs; however, the PSC has not yet issued a final order addressing that question. Any change from the traditional interpretation could have significant enforcement implications for ESCOs or DERs as the OIE begins to take shape. As the PSC continues to clarify its position on this matter, it will be important for ESCOs to keep up to date on such developments in order to ensure compliance with New York’s ever-evolving regulatory regime.