RESA petitions LIPA to allow for meaningful competition on Long Island

Earlier this month, the Retail Energy Supply Association formally petitioned the Long Island Power Authority to open an investigation on what the association believes is a lack of meaningful competition in the retail energy markets. The petition seems to be the next stage in the development of the long-held criticisms of the region's utility, PSEG Long Island.

RESA's criticism of PSEG Long Island's Utility 2.0 plan
Last October, the RESA criticized PSEG Long Island's announcement of its Utility 2.0 Revised Long Range Plan, stating that it was overly focused on the value-added services from the utility, and while lacking any substantial plans for increasing competition, according to the comments that the RESA filed with The State of New York Public Service Commission in October 2014.

The association characterized the level of competition in retail energy markets on Long Island as "moribund," and stated that this was restricting meaningful consumer choice and contributing to the region's famously high energy prices.

"Currently, based on the LIPA website there are only seven ESCOs authorized to operate in LIPA and it is our understanding that there has been a relatively insignificant level of migration of load to independent ESCOs. And with respect to small customers, retail access is basically non-existent. Thus, in more than 15 years there has been virtually no progress in bringing retail access to the LIPA consumer," the RESA wrote in its comments to the PSC.

This comprises the crux of the criticism of the Utility 2.0 plan: While the initiative is very specific with its outlook for new utility-provided services to customers, it's conspicuously silent on the topic of creating a systematic approach for bolstering competition in the retail energy market. This, according to the RESA's comments, further entrenches LIPA as the ruling entity in Long Island's energy markets, rather than allowing market forces and customer choice to be the primary determinant of prices and services.

The RESA's petition could lead to an investigation that could open the door to more competition in the LIPA's territory.

RESA formally petitions utility to investigate competition in the retail market
The RESA has finally decided to translate its criticisms into action: On Jan. 5, 2015 it filed a formal petition with the LIPA to initiate an investigation into the stagnant competition in Long Island's retail energy market, according to a press release on the association's website.

Right now, there is a dearth of truly competitive ESCOs/REPs allowed to do business in PSEG Long Island's territory, and consumer migration to these independent providers has not been in line with the rate of customer switching seen in the rest of the state. 

"Consumers and businesses on Long Island face very high electricity costs and have been economically harmed by their inability to access competitively priced electricity," Christopher Wentlent, RESA's New York state chairman said. "Absent the implementation of necessary program modifications it is highly unlikely that a robust market of third-party providers offering electricity services and products to customers will ever develop in the LIPA service territory."

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