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PSC Commissioners Highlight License Requirements, Whether Changes Needed, Greater Importance Under New Law
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During today's Maryland PSC administrative meeting, Commissioners discussed the licensing requirements for retail suppliers and whether changes to the requirements should be considered, with Commissioners noting the greater importance that the licensing requirements will have under SB 1, which includes a three-year renewal requirement for supplier licenses
The discussion arose as the PSC approved a settlement among Eligo Energy MD, LLC, Staff of the PSC, and the Office of People’s Counsel under which, among other things, Eligo agreed to pay $183,000 to resolve alleged violations stemming from its operation in the Delmarva Power and Potomac Edison territories when it had not indicated to the PSC in its license application, or any prior amendment, that it would serve customers in such areas. See full details on the settlement, including a statement from Eligo Energy, here in our related story today
Eligo has stated that its operation at Delmarva and Potomac Edison, without the requisite license approval for those specific service areas, was due to an administrative oversight, as Eligo said that it did not realize that the electricity license granted in 2012 was limited to the Baltimore Gas & Electric and Pepco service territories (as those are the areas Eligo had checked on its application)
Retail suppliers on the Maryland application check boxes for those utility service areas the supplier "intends to serve". There is no "statewide" option. License orders from the PSC typically grant licenses, "limited solely to electricity supplier services for the customer classes
and service territories applied for."
During the PSC's discussion, several Commissioners noted that similar issues have arose in the past, though no specific retail supplier instance was cited during the discussion, and the prior instances that were cited related to brokers operating without any license (not just lacking authority for a specific service area). Staff, in comments filed last year, did cite one instance in which another licensed supplier had operated in service areas in which the supplier had not been specifically licensed, with such instance occurring in 2014
In any event, it prompted a discussion of whether the PSC should require suppliers to be licensed in specific service areas in order to operate in such areas (as is the case presently), or should a supplier's responses related to the service areas in which the supplier intends to operate be modified to be an informational response only, with any license authority granted on a statewide basis (for those utilities with choice), rather than authorizing suppliers to operate on a service area basis.
Commissioners emphasized that suppliers need to be familiar with each state's specific rules, but inquired of PSC Staff what benefit is received from making the licenses specific to the indicated service areas. Other than generally making the PSC aware of where the supplier intends to operate, Staff did not offer any benefit to the current approach. Notably, a supplier's bonding requirement does not change based on the number of service territories it serves
Commissioner Bonnie Suchman said that retail suppliers are responsible for knowing what the licensing requirements are, but added that, if the requirement to receive authority by service area isn't a mandate under statute and doesn't provide material benefit, then it's something that Staff and the Commission need to, "take back and think about[.]"
PSC Chair Frederick Hoover said of Eligo that, "It strikes me that they ought to have enough wherewithal to figure out what the rules of the game are in the various places they operate," but the Chair also emphasized that the Commission's licensing process needs to reflect what the Commission seeks to accomplish through licensing, citing new requirements under SB 1
"This issue needs to be examined so that the licensing requirement has the effect that we want to have on it," Hoover said
"The reason why SB 1 got passed, and signed by the Governor, was concerns with this industry which the General Assembly and the Governor weren't convinced could be adequately overseen by the current laws that were on the books, and so now they've created this whole new process and the important part of that process is this renewal of the license. I think there's obviously a concern about how these companies have been operating, and the General Assembly has decided that the licensing aspect of this is one way to try to control the actions of these companies. So, going forward we're going to have to pay close attention so that the licensing requirements mean what they say. So if you're required to do certain things, you have to do them," Hoover said
Suchman and Commissioner Michael Richard aligned themselves with Hoover's comment quoted immediately above
Hoover also opposed having the utilities policing whether suppliers are licensed by the PSC for the utility's specific service area, as Hoover said that this is an issue for the Commission
"My concern is, I don't necessarily think that the utility should be the policeman for this. I think it's perfectly reasonable for them [the EDCs], if they get a request from this company [the retail supplier] to switch a customer to them [the supplier], it's not really the utility's job to make sure that they've [the supplier] got a valid license," Hoover said
Eligo Energy provided the following statement concerning the matter:
"The settlement stems from inadvertent errors in Eligo Energy's initial license application process. Despite the challenges encountered, Eligo Energy has demonstrated a steadfast dedication to rectifying these issues in a transparent and cooperative manner.
"'We are pleased to have resolved this matter with the Maryland Public Utilities Commission', said Mike Osowski, CEO of Eligo Energy. 'As a company deeply committed to compliance and integrity, we take these matters seriously and have taken proactive steps to ensure full compliance moving forward.'"
--- Statement from Eligo Energy
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PSC Chair Doesn't Want Utilities Policing Supplier License Issues, Role Is For The Commission
May 22, 2024
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Reporting by Paul Ring • ring@energychoicematters.com
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