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CSPs, BGE Argue Maryland PSC Lacks Authority to License CSPs

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October 1, 2010

The Maryland PSC lacks the statutory authority to license curtailment service providers, Baltimore Gas & Electric and several curtailment service providers (CSPs) said in separate comments in Case 9241.

PSC Staff had previously suggested (8/12/10) that the Commission has authority to license curtailment service providers since such entities, "could be considered to be a person that provides 'electricity supply services,'" and because the statute, Staff argued, includes in the definition of electric supplier a person who sells electricity supply services

Specifically, the term "electricity supplier" is defined in Section 1-101(j) of the PUC Article as follows:
(j) Electricity supplier. - (1) "Electricity supplier" means a person:
(i) who sells:
  1. Electricity;
  2. Electricity supply services
  3. competitive billing services; or
  4. competitive metering services; or
(ii) who purchases, brokers, arranges, or markets electricity or electricity supply services for sale to a retail electric customer.

BGE noted that "electricity supply services" is not defined in statute, but is defined in COMAR as meaning, "the retail procurement of: (a) An electricity supplier; (b) Metering, billing, or meter data management services; or (c) Other competitive services traditionally provided by an electric company."

"CSPs do not 'sell' electricity or any services related to the 'supply' of electricity to retail electric customers. Instead, CSPs pay consumers of electricity to reduce their power consumption at critical times or in response to market prices -- i.e., the CSPs are not selling anything, but rather 'buying' demand response capacity from the retail electric customers," BGE argued.

"No party to the transaction is receiving any electricity from the other party, and no services are being provided by the CSP to facilitate any transfer of electricity to a retail electric customer from a third party," BGE said.

Comverge, EnergyConnect, EnerNOC, and Viridity, filing jointly, further noted that while curtailment service providers may sell reductions in demand for electricity in wholesale electric markets, such wholesale sales are not within the scope of the Maryland statute.

The jointly filing CSPs and BGE both noted that Staff's overly broad interpretation of an "electricity supply service" could have unintended consequence. Taken to its extreme, the Commission, under Staff's interpretation of this provision, could license traditional energy efficiency contractors, energy audit companies, electricians, and even, "hardware stores that sell electricity-related items such as light bulbs," the joint CSPs said.

CSPs said that the Commission's concerns about having data related to demand response capacity in the state does not require the Commission to license CSPs, as the data can be obtained from PJM, and alternatively through the potential for voluntary reporting subject to confidentiality protection. As the PSC has not specifically defined what type of data it is interested in having, CSPs suggested a working group process to examine the question.

Hess Corporation supports extending the licensing requirements of § 7-507 of the PUC Article to CSPs, though Hess did not offer any statutory argument to support such an extension.

Pepco and Delmarva have no objections to licensing CSPs but asked the Commission to consider administrative burdens on utilities and PSC Staff. The Pepco companies noted that detailed tariffs had to be developed to govern utility and competitive retail supplier interactions, and were wary of any such administrative duties with respect to CSPs.

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