Update: Regulator Also Prohibits Retail Supplier From Renewing Contracts Under Suspension (Including Continuing Month- to-Month Contracts), Sets Date For Hearing On Potential License Rescission

September 30, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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The Rhode Island Division of Public Utilities and Carriers (Division) recently "suspended" the electric supplier license of Agera Energy LLC (Agera), and held that Agera is prohibited from renewing any customer contracts in addition to being prohibited from signing new customers

As exclusively first reported by EnergyChoiceMatters.com, the Rhode Island Public Utilities Commission (Commission) previously ordered that Agera Energy shall not enroll new customers. The Commission took this action after the Commission determined that Agera was out of compliance with its RPS obligations, and the Commission drew upon Agera's letter of credit to partially fulfill such obligations. The Commission said that the Commission's drawing upon the letter of credit meant that Agera Energy, LLC was out of compliance with the applicable retail energy supplier rules which require security, and, as such, Agera was not authorized to enroll new customers

The Rhode Island Division of Public Utilities and Carriers (Division) recently issued an order that not only prohibited Agera from enrolling new customers, but which also directed that Agera may not renew customers in Rhode Island

"In view of the Commission's finding in Order number 23659 that Agera Energy LLC has failed to comply with the 2018 Renewable Energy Compliance Payment Obligation, Agera Energy LLC is hereby placed on notice that its certification to sell energy with in the State of Rhode Island is hereby suspended pending the Division's final order in this matter. Agera Energy LLC may not enter into new contracts to sell energy to consumers within the State of Rhode Island, nor may it renew existing contracts as they reach the end of the contract term while its certification is suspended. Existing energy contracts with Rhode Island consumers are not affected by this suspension during the original contract period," the Division said

The Division will conduct a public hearing on Tuesday, October 22, 2019 to, "consider whether or not Agera Energy LLC's certification to sell energy within the State of Rhode Island as a nonregulated power producer should be rescinded in view of the recent decision of the Rhode Island Public Utilities Commission (Commission), issued in In Re Agera Energy LLC Renewable Energy Standard Compliance, Commission Order number 23659 dated and effective August 28, 2019, in Commission Docket No. 4964, holding that 'Agera Energy LLC has failed to comply with the 2018 Renewable Energy Standard.'"

The Division noted that, "Commission Order number 23659 found that Agera Energy LLC's Alternative Compliance Payment obligation to the State of Rode Island Renewable Energy Development Fund far exceeded the Letter of Credit on file with the Commission and Division. The Commission Order also held that once demand was made for the full amount of the Letter of Credit and the funds released to the State, Agera Energy LLC would be out of compliance with the Division's Rules Applicable To Nonregulated Power Producers (R.I. Code of Regulations Part 815-RICR-30-05-1)."

Agera sought clarification of the Division's order, stating, "Agera hereby requests that the Division clarify the basis for the language in the Order prohibiting Agera from 'renew[ing] existing contracts as they reach the end of the contract term while its certification is suspended.' The Public Utilities Commission’s (the 'Commission’s') Renewable Energy Standard regulations only prohibit a nonregulated power producer in this situation from 'enroll[ing] new customers.' They do not prohibit renewing existing customers. Accordingly, Agera requests that the Division identify the basis for the prohibition on renewing existing contracts and, if no such basis exists, modify the Order appropriately.

"In addition, Agera requests specific clarification on the impact of the Order on Agera’s service of existing customers on month-to-month contracts ('Monthly Customers'). As the Division is aware, Monthly Customers’ contracts continue until terminated by notice from either party. Thus, Agera is neither entering into new contracts with Monthly Customers nor renewing these customers’ contracts. Further, because the Monthly Customers are already being served by Agera, they are not being enrolled. Accordingly, Agera requests that the Division clarify that the Order does not prohibit Agera from continuing to serve its Monthly Customers," Agera said

In response, the Division stated that the supplier rules require, "companies such as Agera Energy LLC ... to maintain the required level of financial security at all times 'to satisfy penalties assessed by the Division for violations of any consumer protection rules or laws related to nonregulated power producers, refunds ordered by the Division, or failure to comply with the provisions of .. . [the Renewable Energy Standard, RIGL §§ 39-26-1et seq.]"

"Under these circumstances, until such time as Agera Energy LLC provides the Division satisfactory evidence of ongoing financial soundness, its authority to enter into any new contracts has been suspended. As each contract term expires, the consumer with whom that contract was made ceases to be a customer of Agera Energy LLC. The Division views any new contract with such a customer to be a new contract with a new customer. In the absence of satisfactory evidence of ongoing financial soundness, Agera Energy LLC is not in compliance with either the applicable Division or Commission rules or their underlying statutes and may not enter into any new contract in this State," the Division said

"The same reasoning applies with respect to Agera Energy LLC's month-to-month contracts. Such contracts are not of an unknown or continuing duration. They are each for one month of service. At the end of the current month, there has to be an agreement (or 'contract') whether written or oral for a succeeding month. (See RIGL 39-26.7-S(m) as amended by Senate Bill No. 399, Ch. 281, §2, on July 16, 2019, which states 'On and after August 1, 2019, no nonregulated power producer shall automatically renew or cause to be automatically renewed a contract with a residential customer. .. '). In the absence of satisfactory evidence of ongoing financial soundness, Agera Energy LLC is not in compliance with either the applicable Division or Commission rules or their underlying statutes and may not enter into any new contract in this State and may not enter into a new agreement for any existing 'month-to-month' contract customer," the Division said

Division Docket No. D-19-26

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