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Pennsylvania Electric Suppliers, Brokers Must be Specifically Licensed to Serve Small Volume Customers Even in Mixed Meter Situations
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Pennsylvania electric suppliers and brokers seeking to serve residential and small commercial accounts in mixed meter situations must specifically be licensed to serve residential and small commercial customers, the Pennsylvania PUC clarified in a Secretarial Letter issued Friday.
The PUC used the term mixed meter to mean a situation where an electric generation supplier (EGS), including a broker, serving a large commercial, industrial or governmental customer incidentally provides service through multiple meters to one or more residential or small commercial customers. In such situations, the EGS has contracted with the large commercial, industrial or governmental customer, and the service provided to residential or small commercial customers through separate meters is part of or incidental to that contract or account.
Examples of mixed meter scenarios cited by the PUC include:
- An EGS contracts with a university to provide electric supply through multiple meters, and the president's home is served as part of that account through a residential meter;
- An EGS contracts with a military base and provides supply through multiple meters including commercial, such as hospitals and storage depots, and residential, such as dwellings for commanding officers;
- An EGS contracts with a parish and the rectory is served as part of the account;
- An EGS contracts with a bank that has several branches and receives service as a large commercial customer, while automated teller machines are metered as small commercial customers; and
- An EGS contracts with an industrial complex that is a large commercial customer, with maintenance sheds and parking lot lights being served through small commercial meters.
"[R]egardless of who the contracting party is or whether the service to residential or small commercial customers is incidental to service provided to a large commercial, industrial or governmental customer," EGSs must be specifically licensed by the PUC to serve residential customers and small commercial (< 25 kW) customers, the PUC said.
Suppliers and brokers who have only sought, and received, authority to serve commercial customers over 25 kW, industrial customers, and/or governmental customers must seek an amendment to their licenses in order to serve residential and small commercial customers in mixed meter situations.
However, if the EGS intends to limit its supply to residential and small commercial customers to mixed meter situations, and does not intend to market directly to these customers, the PUC said that the necessary license amendment application need not include the otherwise required disclosure statements required by 52 Pa. Code Section 54.5. The EGS would need to provide the disclosure statements to the PUC if the EGS later wishes to interact directly with residential or small commercial customers.
Additionally, for license amendment applications to serve residential and small commercial customers in mixed meter situations, the EGS need not publish notice in newspapers of general circulation, which is required for original applications or requests to amend the geographic area to be served.
Furthermore, the Secretarial Letter clarified that electric generation suppliers serving residential and small commercial customers in mixed meter scenarios, "would generally be exempt from compliance," with the provisions of Chapter 56 of the Commission's regulations in Title 52 of the Pennsylvania Code and the specific customer protections in 52 Pa. Code Sections 54.4-54.9, which are normally applicable to electric generation suppliers serving residential and small commercial customers.
"Our understanding of those [mixed meter] situations is that all of the EGS's interactions, including extending an offer, conducting negotiations, executing a contract and issuing bills, are exclusively with the large commercial, industrial or governmental customer, and that the provision of service to a residential or small commercial customer is merely incidental to the sale of that supply. Since the EGS would have no interactions with a small commercial or residential customer served as part of such a mixed meter account, it would be impractical to require compliance with provisions intended to protect those consumers during contract negotiations and the billing process," the PUC said.
The PUC noted that this treatment is consistent with the treatment of electric distribution companies serving residential customers as part of a large commercial customer account, which likewise do not comply with Chapter 56 provisions except when terminating service.
"We emphasize that the clarifications provided by this Secretarial Letter are not intended to apply to affinity group marketing situations where an EGS that is licensed to serve commercial, industrial or governmental customers offers to provide service to the customer's employees or customers for use at their individual residences. The relevant provisions of Chapters 54 and 56 would apply to these accounts," the PUC said.
The PUC said that further questions regarding whether it is necessary to extend Chapter 54 or 56 protections to residential or small commercial customers who are served incidental to or as part of a large commercial, industrial or governmental contract which are not answered by the Secretarial Letter (such as situations not contemplated by the letter) should be raised with the Office of Competitive Market Oversight, which will seek further guidance from the Law Bureau or the Commission as necessary.
The Secretarial Letter was filed in Docket M-2009-2082042.
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