In a move to strengthen consumer protections and reduce utility costs, New York State has enacted new legislation targeting energy services companies (ESCOs) that fail to return customer refunds. Governor Kathy Hochul signed the bill into law on May 23, ensuring that entities return money owed to former customers or transfer it to the state’s Office of Unclaimed Funds for recovery.
The legislation—S.7230/A.6762—closes a long-standing loophole that allowed ESCOs to hold on to refunds ordered by the Public Service Commission, even if the customer had switched providers or was unreachable. Now, ESCOs must either return those funds directly to customers or surrender them to the state if they cannot reach the customers.
What the law changes
The new law:
- Aligns ESCOs with utilities by requiring them to follow the same abandoned property rules.
- Mandates public notice of unclaimed deposits, prepayments, and refunds.
- Requires remittance to the State Comptroller if funds go unclaimed after two years.
- Ensures customers can reclaim funds via the Office of Unclaimed Funds database.
More than 150 ESCOs operate in New York, serving roughly 900,000 electric customers and 700,000 gas customers. In the past year, several have lost eligibility to operate in the state, raising concerns about the accountability of transient or non-compliant providers.
Protecting New Yorkers and lowering bills
Governor Hochul said the reforms are part of her broader effort to reduce household costs.
“These reforms will end the practice of bad actors retaining refunds owed to customers, ensuring New Yorkers get their money returned,” she said.
Public Service Commission Chair Rory M. Christian added that the law “prevents ESCOs from taking advantage of everyday New Yorkers” and strengthens the Commission’s enforcement powers.
A step toward transparency and fairness
State lawmakers say the law promotes transparency and puts working families first.
“This bill is about fairness. It makes sure energy companies can’t quietly hold on to money that should go back to the customer,” said State Senator Leroy Comrie.
Assemblymember Carrie Woerner noted that many former ESCO customers struggle to claim refunds due to limited communication after switching providers. The law ensures these funds are no longer lost in regulatory limbo.
What consumers should know
- If you believe you’re owed money from an ESCO, visit the New York State Comptroller’s Office of Unclaimed Funds to search and claim it.
- Starting in 2025, ESCOs must remit all qualifying unclaimed funds by October 10 each year.
Officials expect the law to return millions of dollars to New York households and increase pressure on ESCOs to act in good faith.
This content is brought to you by the FingerLakes1.com Team. Support our mission by visiting www.patreon.com/fl1 or learn how you send us your local content here.