Rory Christian, chair and CEO of New York Public Service Commission, and the PSC approved a $71 million settlement with nine energy service companies operating in New York after a 2025 “show cause” order alleging they had violated state business rules and PSC rules designed to protect customers.
Lori Van Buren/Times Union
On Thursday, Gov. Kathy Hochul announced a $71 million financial settlement between the state and nine energy service companies that had allegedly violated consumer protection rules over gas and electricity contracts with utility customers.
Will Waldron/Times Union
ALBANY — State regulators have approved a $71 million settlement with so-called energy service companies, or ESCOs, that sell retail gas and electric supply to customers.
The settlement, approved Thursday by the Public Service Commission, will provide $50 million in rebates to 278,000 current and former customers over allegations that nine ESCOs associated with the Houston company NRG Energy violated the terms of a 2019 PSC order that “reset” the rules for ESCOs operating in the state to address “unfair business practices” staff at the commission had alleged. The new rules took effect in April 2021.
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The nine ESCOs, which served a mix of residential and business customers, “denied most of the allegations” laid out in a 2025 “show cause” order, according to a news release from Gov. Kathy Hochul’s office.
ESCOs market their services in a wide variety of ways, typically offering customers discounted gas or electric “supply” normally provided by their utility.
Several decades ago, the PSC “deregulated” the gas and electric markets by allowing third parties to offer the actual commodity of the natural gas or electricity in competition with utilities under the premise of driving down prices.
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Utilities charge customers two fees: one for the actual supply and one for “delivering” the gas or electricity to customers. The utilities note they do not “mark up” wholesale gas and electric costs and use a variety of techniques, including hedging strategies, to drive down the cost to customers.
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Deregulation also included the sale of utility-owned power plants to third parties as well. They now sell the electricity they produce on wholesale markets overseen by the New York Independent System Operator in North Greenbush.
In a statement, NRG Energy’s general counsel and Executive Vice President Brian Curci said the company was “pleased” to have reached the agreement with the PSC after “working closely and proactively” with commission staff.
“We believe this agreement presents a strong opportunity to answer the governor’s call for affordable energy by offering guaranteed savings and bill pay assistance to longstanding customers of the NRG brands in New York,” Curci said in a statement.
The nine ESCOs that were part of the settlement are: Gateway Energy Services Corp., Energy Plus Holdings, Energy Plus Natural Gas, Direct Energy Services, Green Mountain Energy Co., Reliant Energy Northeast, Stream Energy New York, XOOM Energy New York and NRG Business Marketing.
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Affordability and high energy prices are a huge political issue both nationally and in New York state as the war in Iran and years of price inflation have driven up energy prices, hurting consumers and businesses alike. Hochul, a Democrat, is seeking reelection in November.
Her opponent, Nassau County Executive Bruce Blakeman, has made affordability and combating high energy prices in the state a major part of his campaign message. Hochul has sought to counter those arguments.
“Too many New Yorkers are struggling with high utility bills, being squeezed every month just to power their homes,” Hochul said in a statement following the PSC’s action. “The settlement agreement adopted by the PSC (on Thursday, April 17) puts money back in the pockets of customers and offers them future savings, putting affordability first for everyday New Yorkers.”
The governor’s office said that the $50 million will go to repay customers who “were allegedly not transitioned to revised (ESCO) contracts after April 2021” which should have been cheaper.
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Also, the same companies will have to provide both current and former customers impacted by the order with a one-year guaranteed offer for gas or electric supply that is 15 percent cheaper than the utility prices, or allow the customers to revert back to getting their supply from their utility. This portion of the settlement is valued at up to $21 million.
The companies also agreed to provide $900,000 in rebates to low-income utility customers who were “inadvertently” signed into ESCO services.
PSC Chairman Rory Christian said that the settlement not only provides money back to consumers but holds the ESCOs “accountable” for their actions.
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The agreement “will ensure customers remain protected and promote greater energy affordability,” Christian said in a statement. “The Public Service Commission remains vigilant in holding all companies in its jurisdiction accountable.”