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PSC Chair: Retail Suppliers Will Need To Be "A Little Patient" As PSC Addresses SB1 Implementation
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Retail energy suppliers in Maryland need to be "a little patient" as the PSC works to implement the SB1 retail energy reform law, Maryland PSC Chair Frederick Hoover said as the Commission took under advisement three implementation questions discussed at today's PSC meeting, including a green power price cap
The PSC today did not issue orders on the following open questions which were discussed at the PSC's administrative meeting:
• The level of a generic green power price cap for retail suppliers (background here)
• Whether "perpetual" residential contracts are subject to the standard price cap and other new consumer protection provisions under SB1, or whether such contracts qualify as grandfathered under SB1 (background here)
• Whether incidental residential accounts, served under a residential utility rate class but in which the account owner is not residential, are deemed residential for purposes of SB1's residential consumer protections (background here)
Also outstanding is what form of billing retail suppliers will be able to use after Jan. 1, 2025, at which time POR is prohibited for new residential customers, and whether dual billing will be mandatory
Hoover said SB1 is the first major change to the retail market since restructuring was initially passed in 1999. Hoover noted that the initial implementation of choice by the PSC didn't happen overnight after the deregulation legislation was passed
In the same vein, "I think everybody's going to have to be a little patient as we sort of work through this process," Hoover said
Hoover said that the PSC would work to get decisions out as soon as possible, but noted that the PSC may need more information from stakeholders on various issues
As to the three questions discussed at today's administrative meeting, while not issuing any decisions today, a majority of the PSC Commissioners present did not rush to embrace the position of retail suppliers on any issue, while also displaying skepticism regarding suppliers' positions on certain issues
The PSC took all three matters under advisement in part to allow for the input of Commissioner Michael Richard, who was attending a meeting of the Maryland Association of Counties, and to allow for the wordsmithing of specific language for any order, due to the specific nature of the relief requested by suppliers
With regard to green power pricing cap, Commissioner Bonnie Suchman was hesitant to adopt suppliers' proposed interim cap of 150% of the 12-month trailing average SOS rate
Suchman asked suppliers for a different cap, but, apart from WGL Energy which had proposed an adder of $20/MWh to the 12-month trailing SOS rate (provided that national RECs are allowed to be used for the part of the green power offer that does not need to use resources that qualify for Maryland's RPS, which could be as high as 49%, details here), suppliers did not endorse a specific number other than 150%, though using 125% to split the difference was offered during the discussion. Approved adders of about 2 cents per kWh for certain utility green power offers was also cited.
Suchman also asked whether the question of whether national RECs may be allowed to form up to 49%, of a residential SB1 green power product, needs to be answered before establishing any price cap
As previously reported, language in SB1 requires that any REC purchased under a section of the law allowing green power offers must be retired in a PJM GATS subaccount "accessible by the Commission". There is question as to whether only in-state RECs can be retired in such a subaccount, or whether other Maryland RPS-eligible RECs from other PJM states may be used. Furthermore, there is debate as to whether this subaccount requirement applies only to the part of a green power plan that must be comprised of RECs which meet the Maryland RPS (51%) or whether all RECs for a green power plan must be retired in such a PJM GATS subaccount "accessible by the Commission" (which would thus ban non-PJM national RECs for the 49%).
Suchman said that if this question about what types of RECs may be used for a green power offer is required to be answered before adopting a green power price cap, it will take the Commission longer to decide on the green power price cap
Regarding perpetual contracts, SB1 applies, effective Jan. 1, 2025, to contracts which are new, or which are renewed on or after Jan. 1, 2025. Retail suppliers argue that perpetual contracts, which do not have an expiration date (as opposed to month to month contracts which are explicitly stated to be renewed monthly), are not renewed and thus are not subject to SB1, since SB1 states that the law shall not disturb an existing contract
Commissioners wondered whether the universe of contracts which are perpetual is large enough to warrant suppliers' concern
Suchman said that granting suppliers any exemption from the SB1 requirements for various subsets of contracts feels "squishy", and expressed concern that suppliers would keep returning with additional types of contracts alleged to not fall within SB1 because the contracts do not "renew"
Regarding incidental residential accounts, Commissioners generally believed that customers already possess the information that retail suppliers need to determine how to treat the customer (e.g. residential or non-residential) since the customer will know their rate classification (or, at least the customer can refer to the bill for the info)
Suchman said that if a retail supplier does inadvertently enroll a residential class customer on service that does not conform to SB1 (whose provisions are limited to residential service) due to an IRA situation, the supplier can come to the Commission explaining the situation if the supplier is concerned about compliance actions
Hoover said that C&I customers, in expressing their desire to be excluded from SB1, had stressed their sophistication in utility matters and energy purchases. As such, Hoover said that these customers should know their rate class when discussing service with retail suppliers
As previously reported, the utility tariffs provide for a process for a customer to request a change to another rate class if the customer believes that the customer has been placed on the wrong rate class. However, rate classification is based on the manner of the usage (e.g. domestic), so it remains to be seen how successful any such customer request will be. Still, retail suppliers during today's administrative meeting said that this utility process allowing customers to seek a change in rate class may resolve their concerns regarding IRAs
Green Power Price - Case 9757
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PSC Takes Under Advisement (No Decision) Three Retail Market Questions, Including Green Power Price Cap
December 11, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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