What's happening
This bill requires energy brokers and consultants in New York to register with the state, disclose compensation, and prohibits rebates.
Why it matters
Increases oversight and consumer protection. By requiring energy brokers and consultants to register with the state and demonstrate financial accountability (through bonds), the bill aims to reduce fraud and ensure that only qualified, vetted entities can advise or broker energy deals. This adds an extra layer of security for consumers navigating complex energy markets.
Mandates transparency in broker compensation. The requirement for brokers and consultants to clearly disclose the form and amount of their compensation in contracts and on customer disclosure labels helps consumers understand potential conflicts of interest and the true costs of their energy agreements.
Seeks to eliminate hidden incentives and unethical practices. By prohibiting rebates, kickbacks, or other forms of undisclosed compensation tied to energy contracts, the bill targets potentially deceptive practices that could lead to higher costs or biased recommendations for consumers.
Potentially impacts energy choice and competition. The added compliance requirements, including registration fees and bonding, could limit the number of smaller or less-capitalized brokers and consultants in the market, potentially affecting the range of options available to consumers but also weeding out bad actors.
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Headline styles
Register Energy Brokers, Consultants
Plain English, a few words. Used as the page title.
Sponsors
Senator · Senate District 14
2 Co-sponsors
History
- Referred to energy and telecommunications
- Returned to senate
- Died in assembly
- Referred to corporations, authorities and commissions
- Delivered to assembly
- Passed senateVote 55–6
- Ordered to third reading cal.1264
- Committee discharged and committed to rules
- Referred to energy and telecommunications
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Register Energy Brokers, Consultants
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor Jeffrey Dinowitz
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5998
2019-2020 Regular Sessions
IN SENATE
May 16, 2019
Introduced by Sen. COMRIE -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public service law, in relation to requiring the registration of energy brokers and energy consultants
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The public service law is amended by adding a new section 66-p to read as follows:
§ 66-p. Registration of energy brokers and energy consultants. 1. Definitions. For the purposes of this section, the following terms shall have the following meanings unless the context indicates otherwise:
a. "Broker compensation" means any payment made to an energy broker or energy consultant for the purposes of securing or procuring of energy for the end-use customer, or advising on the securing or procuring of energy for the end-use consumer.
b. "Customer disclosure label" means the statement an energy service company must provide a customer with whom it enters into a sales agreement pursuant to the rules and regulations of the public service commission.
c. "Energy broker" means an entity that assumes the contractual and legal responsibility for the sale of electric supply service, transmission or other services to end-use retail customers, but does not take title to any of the electricity sold, or an entity that assumes the contractual and legal obligation to provide for the sale of natural gas supply service, transportation or other services to end-use retail customers, but does not take title to any of the natural gas sold.
d. "Energy consultant" means any person, firm, association or corporation who acts as broker in soliciting, negotiating or advising any electric or natural gas contract, or acts as an agent in accepting any electric or natural gas contract on behalf of an ESCO.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11085-03-9
S. 5998 2
e. "Energy service company" or "ESCO" means an entity eligible to sell electricity and/or natural gas to end-use customers using the transmission or distribution system of a utility corporation.
2. Acting without registering with the commission. a. (i) No person, firm, association or corporation shall act as an energy broker or energy consultant without first registering with the commission.
(ii) Any person, firm, association or corporation who or which acts as an energy broker or energy consultant in violation of this subdivision shall, in addition to other penalties prescribed by law, be subject to a penalty not to exceed five thousand dollars for each violation.
b. No person, firm, association or corporation shall identify or hold himself, herself or itself out to be an energy broker or energy consultant unless registered with the commission.
c. No person shall accept any commission, service fee, brokerage or other valuable consideration for selling, soliciting or negotiating an energy contract in this state if that person is required to be registered under this section and is not so registered, unless stated otherwise herein.
3. Energy broker and energy consultant registration. a. An energy broker or energy consultant shall register with the commission authorizing such registered energy broker or energy consultant to act as an energy broker or energy consultant in a manner prescribed by the commission; provided that such: (i) energy broker or energy consultant demonstrates financial accountability as evidenced by a bond or other method of financial accountability in an amount not less than one hundred thousand dollars; and (ii) energy consultant demonstrates financial accountability as evidenced by a bond or other method of financial accountability in an amount not less than fifty thousand dollars.
b. The commission may refuse to register or revoke a registration if, in the commission's judgment, the energy broker or energy consultant registering has given cause for the revocation or suspension of operations.
c. Each registered energy broker or energy consultant shall annually pay the commission a five hundred dollar registration fee.
d. Each registered energy broker or energy consultant shall notify the commission upon changing his, her or its legal name.
4. Disclosure of compensation. a. Energy brokers and energy consultants shall be required to disclose their form and amount of compensation to customers via a conspicuous statement on any such contract or agreement between the energy agent, energy consultant, energy broker or energy intermediary and its customer.
b. If an energy service company collects broker compensation on behalf of an energy broker or energy consultant, such broker compensation shall be added as a provision to the customer disclosure label and shall reflect the amount and method of broker compensation.
5. Rebates prohibited. a. No energy broker, energy consultant or any other person acting for or on behalf of the energy broker or energy consultant shall offer or make, directly or indirectly, any rebate of any portion of the fee, premium or charge made, or pay or give to any applicant, or to any person, firm, or corporation acting as agent, representative, attorney, or employee of the energy rate payer or any interest therein, either directly or indirectly, any commission, any part of its fees or charges, or any other consideration or valuable thing, as an inducement for, or as compensation for, any energy supply or energy-related business, nor shall any applicant, or any person, firm, or corporation acting as agent, representative, attorney, or
S. 5998 3
employee of the energy rate payer or of the prospective energy rate payer or anyone having any interest in the real property knowingly receive, directly or indirectly, any such rebate or other consideration or valuable thing. Any person or entity who violates this subdivision shall be subject to a penalty equal to the greater of: (i) five thousand dollars; or (ii) up to ten times the amount of any compensation or rebate received or paid.
b. For the purposes of this section, "an inducement for, or as compensation for, any energy supply business" shall mean a benefit given with the intention to compensate or offer compensation, directly or indirectly, for any past or present placement for a particular piece of energy supply or energy-related business to any applicant, or person, firm, or corporation acting as agent, representative, attorney, or employee of the energy rate payer, lessee, mortgagee or the prospective energy ratepayer, or any interest therein. Nothing contained in subdivision one of this section to the contrary shall prohibit any energy supplier corporation, energy broker, or energy consultant, or any other person acting for or on behalf of the energy service company, energy broker or energy consultant from undertaking any usual and customary marketing activity aimed at acquainting present and prospective customers with the advantages of using a particular energy supplier, energy broker, or energy consultant that are not intended for the purpose of a reward for the future placement of, or the past placement of, a particular piece of energy supply business.
§ 2. This act shall take effect on the one hundred eightieth day after it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public service law, in relation to requiring the registration of energy brokers and energy consultants
Purpose of the bill
The purpose of this bill is to create a regulatory framework for energy brokers and energy consultants.
Summary of provisions
Section 1 amends the public service law by adding a new section 66-p that would require the registration of, energy broker and energy consultants. It would also set penalties for violations of this article, impose customer disclosure requirements for how energy brokers and ener- gy consultants set their prices and prohibit rebating by energy brokers while protecting common marketing business practices that take place in the energy industry.
Section 2 establishes the effective date.
Justification
In the current retail choice marketplace, energy service companies are regulated by the Uniform Business Practices Rules implemented by the Public Service Commission. However, energy brokers and energy consult- ants who act as third parties for purposes of procuring energy for the end use customer from the energy service company are not regulated. This has allowed some unscrupulous actors to enter the market place and led to deceptive marketing practices, slamming and undisclosed fee splitting and rebates between brokers and third parties. This bill would mandate energy brokers and energy consultants to register with the Public Service Commission to help better protect energy service companies and end use customers from these practices.
Prior legislative history
Similar to A.10804-A of 2018.
Fiscal implications
To be determined.
Effective date
This act shall take effect on the one hundred eightieth day after it shall have become a law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.