Legislation S.7230/A.6762 Puts Money Back Into New Yorkers’ Pockets and Protects Consumers From Unfair Business Practices by Energy Services Companies

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Governor Kathy Hochul today signed legislation to allow energy services company (ESCO) customers to easily claim owed funds and prevent ESCOs from holding onto such money indefinitely. Specifically, this bill prevents any bad actors in the ESCO industry from retaining customer refunds that the Public Service Commission has ordered the ESCO to provide to its customers in situations where the customer is no longer served by the ESCO and the ESCO is unable to contact the customer. This legislation aligns ESCOs with standards already required of utilities.

“I’ll never stop fighting to lower costs for families — that’s why I’m signing legislation to bring down energy bills, protect consumers and hold energy services companies accountable,” Governor Hochul said. “These reforms will end the practice of bad actors retaining refunds owed to customers, ensuring New Yorkers get their money returned.”

New York State Public Service Commission Chair Rory M. Christian said, “This action by Governor Hochul reinforces New York’s history of consumer protection through real, tangible changes that prevent ESCOs from taking advantage of everyday New Yorkers. Before this legislation, there was little incentive for ESCOs that no longer operated in New York to continue reaching out to customers to return unclaimed funds. These changes enhance the ability of the Commission to act on consumers’ behalf.”

This change would make it easier for ESCO customers to obtain their unclaimed funds and strengthen the deterrence effect of the Commission's ESCO enforcement orders. The unclaimed funds would not be remitted to the comptroller unless the ESCO's efforts to contact the rightful owner have failed. Given how often ESCO customers tend to switch service providers, ESCO's customer contact information is especially prone to going stale, reducing the likelihood that ESCOs will be able to find the funds’ rightful owners. In addition, some ESCOs may have short-term stints in New York after which they abandon their New York presence, or their eligibility is revoked. Exploiting the current statutory loophole, an ESCO may have little incentive to set aside funds for New York customers.

A former customer is most likely to learn about their unclaimed funds from the State, which regularly publicizes its unclaimed funds recovery process, than from an ESCO with which the customer no longer has a relationship. This change would ensure that, when the Commission penalizes ESCO misconduct by ordering customer refunds, the ESCO cannot retain those funds indefinitely in spite of their misconduct. They now will forfeit the funds, either to the rightful owner or the comptroller.

State Senator Leroy Comrie said, “This bill is about fairness. It makes sure energy companies can’t quietly hold on to money that should go back to the customer. I’m proud to sponsor legislation that puts working families first, strengthens consumer protections, and brings more transparency to how these companies operate in our state.”

Assemblymember Carrie Woerner said, “My thanks to Governor Hochul for signing this important piece of legislation to protect the interests of consumers. Former customers of Energy Service Companies (ESCOs) often report finding it difficult to impossible to request and receive refunds to which they are entitled. This bill would require ESCOs to turn the unclaimed funds over to the NYS Comptroller’s office, in exactly the same manner that utility companies are required, so that consumers can claim these funds easily.”

The legislation signed today also amends the abandoned property law to require ESCOs to publish notice of abandoned customer deposits, advance payments and refunds and then remit any funds that remain unclaimed to the State Comptroller. Specifically, the legislation expressly includes ESCOs within the scope of the abandoned property law and within the statute’s definition of utility services.

Abandoned property law deems any utility customer deposits, advance payments, or refunds abandoned if such funds go unclaimed for two years. Any funds that remain unclaimed after these efforts must be remitted to the comptroller on or before October 10. Once the funds have been transferred to the State Comptroller, the customer may obtain them through the Office of Unclaimed Funds, and the utility is relieved of any remaining liability to the customer.

This legislation increases the likelihood that ESCO customers receive funds to which they are entitled. The Office of the State Comptroller conducts regular outreach about its unclaimed funds recovery process and maintains a searchable database on its website, making it much more likely that an ESCO customer will be able to reclaim funds.

There are more than 150 ESCOs operating in New York State, providing service to approximately 900,000 electric customers and 700,000 gas customers. More than four ESCOs have had their eligibility to serve the New York market revoked in the past year.