BILL NUMBER: S7230
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the abandoned property law, in relation to ensuring
ESCOs are subject to the same consumer protection regulations regarding
unclaimed deposits and refunds currently facing utility companies
 
PURPOSE:
To close a statutory loophole that allows ESCOs to retain unclaimed
customer deposits or refunds, rather than remitting such unclaimed funds
to the Abandoned Property Fund administered by the State comptroller.
 
SUMMARY OF PROVISIONS:
Abandoned Property Law § 103 is amended to add a definition for "energy
services company" or "ESCO." The definition of "utility services" in
Abandoned Property Law § 103(f) is amended to include gas and electric
service provided by an ESCO. Abandoned Property Law Article 4 is amended
to add ESCOs to the list of entities that are subject to Article 4 of
the Abandoned Property Law, which governs unclaimed funds associated
with utility services.
 
LEGISLATIVE HISTORY:
A.10221 of 2024: Passed Assembly
 
JUSTIFICATION:
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, ESCOs' customer contact information is especially prone to
going stale. This reduces the likelihood that ESCOs will be able to find
the funds' rightful owners. In addition, some ESCOs may have only short
connections to New York: ESCOs may abandon their New York presence, or
their eligibility may be revoked. Exploiting the current statutory
loophole, an ESCO may have little incentive to set aside funds for New
York customers. A former customer is more 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 miscon-
duct. They will instead forfeit the funds, either to the rightful owner
or, failing that, the comptroller.
 
FISCAL IMPLICATION:
None.
 
EFFECTIVE DATE:
This act shall take effect on the first day of July next succeeding the
date of which it shall have become law.

Statutes affected:
S7230: 103 abandoned property law, 402 abandoned property law, 402(1) abandoned property law, 402(3) abandoned property law, 402(4) abandoned property law, 403 abandoned property law