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PUC Directs Utility To Undertake Measures To Increase Retail Supplier Participation In Procurement To Serve Shopping-Ineligible Customers
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The Public Utilities Commission of Ohio granted to CGE Renewables LLC electric and natural gas broker licenses limited to serving, "large commercial, industrial, and mercantile customers," in Ohio
As previously reported, CGE Renewables is affiliated with Palmco Power. Palmco Power and its owners were, in two separate stipulations, subject to certain stay-out periods in Ohio. In one stipulation, a five-year stay-out (which expired in July 2024) prohibited certain Palmco owners from operating any competitive retail energy "company" in Ohio (which, under the Ohio definitions, included non-LSE brokers in addition to suppliers). A separate stipulation provided a seven-year stay-out (through 2028) only with respect to a retail "supplier", but also held that the Palmco owners would be permitted to operate an Ohio retail supplier after July 31, 2024 to the extent service was limited to, "only large commercial and/or industrial customers".
The stipulation's language did not expressly allow service to mercantile customers as part of the permissible service to large commercial and/or industrial customers. Additionally, while the large C&I provision applied to any "supplier" (a term which is not all-encompassing of any competitive retail service, unlike the term CRES "provider" which includes both brokering and supply), and while CGE applied for broker (not supplier) licenses, this distinction was not brought up in record filings in the PUCO license application review
In an amended application, CGE Renewables LLC had stated that, for electricity, it is seeking to serve as a broker for, "large commercial, industrial and mercantile customers". The standard electric application form does not distinguish the size of commercial customers in designating the applicant's intended authority (only listing a check box for "commercial").
For natural gas, CGE Renewables LLC in an amended application had stated that it seeks to serve, "large commercial, industrial and mercantile customers". The standard natural gas application does distinguish between small and large commercial service. However, while a mercantile designation exists in the Ohio natural gas market, the standard form broker application does not list mercantile customers as an option
While the stipulation had not expressly addressed service to mercantile customers, PUCO granted CGE authority to serve mercantile customers, finding that service to mercantile customers is consistent with the intent of the stipulation, which was to provide heightened protection to residential customers
PUCO said, "The Commission notes that, although not specified in the stipulation, mercantile customers, by definition, may not consume energy for residential use and are otherwise comparable to large commercial and industrial customers in their energy profiles and sophistication."
The need for PUCO to specifically address service to mercantile customers was prompted, in part, because a mercantile customer, while in many cases meeting the definition of a large C&I customer, may actually be smaller and actually may not, in certain instances, meet the definition of a large commercial or industrial customer (though, as noted by PUCO, a mercantile customer may not consume energy for residential use)
As previously noted by ECM, an Ohio commercial customer can be designated as mercantile, regardless of usage level, due to being included in a, "national account involving multiple facilities in one or more states" (for electricity, with a similar multi-location option granting mercantile status on the gas side). In other words, a small commercial customer may be eligible for mercantile status based on the customer's operations at other locations
PUCO said, "the Commission concludes that the inclusion of mercantile customers as possible customers of CGE Renewables does not run afoul of the stipulation ... and is otherwise in line with the desired heightened protections for residential consumers."
PUCO required CGE to provide reports on its customer base in order to ensure compliance with the provision that service may only be provided to large C&I and mercantile customers
For two years (the standard length of a granted broker certificate, which PUCO granted to CGE), PUCO ordered CGE to provide to PUCO Staff, on a quarterly basis, a list of CGE's customers in Ohio
PUCO further stressed that, "This reporting requirement should not be construed as limiting Staff’s ability to request and obtain in a timely manner additional information as Staff deems necessary to confirm compliance with the Commission’s directives during the two-year certificate period."
As previously reported, Staff in its recommendation for approval of CGE's licenses had stated, "the Commission has not issued any CRES/CRNGS certificates that only certify the applicant to provide services to large commercial and industrial customers."
PUCO recited Staff's observation concerning this novelty, in granting the broker licenses to CGE
As previously noted by ECM, the meaning of Staff's specific observation concerning the novelty of a certificate limited only to large C&I service was unclear
While a specific "large commercial" designation does not exist in the electric application, this specific class is an option in the gas application. ECM has found at least one natural gas broker which, in its application which was approved in 2023, selected to serve only large commercial and industrial customers
True, in most cases, certificates for broker or supplier licenses are issued on an administrative basis, without a formal finding and order from PUCO. Thus, it may be true that PUCO has not previously, through a finding and order, limited a license to service to only large C&Is
Additionally, in the routine administrative process in which certificates from PUCO are issued to suppliers and brokers, even in cases where a supplier/broker has specifically indicated service only to large C&Is as part of the application, the certificates do not specify the customer classes (or utility service areas) for which a supplier/broker is authorized
Moreover, in directing applicants to indicate the customer classes and service areas that the applicant will serve, the applications list these selections as the customers and areas that the applicant "intends" to serve, and thus such selections on the application potentially may not be treated as binding by PUCO
PUCO approved CGE's applications to operate as a broker for large commercial, industrial, and mercantile customers, "in Ohio".
In CGE's most recently amended gas filing, CGE had proposed to provide service in all service areas. In CGE's most recently amended electric filing (made via a narrative rather than a revised application form), CGE had proposed to provide service at, "American Electric Power (AEP Ohio), Duke
Energy Ohio, FirstEnergy-Cleaveland [sic] Electric illuminating [sic], FirstEnergy -Ohio Edison and
FirstEnergy-Toledo Edison."
Dayton Power & Light (AES Ohio) was not listed in the amended filing, but had been selected on the original application form
As noted above, PUCO's grant of the licenses were for service "in Ohio", with PUCO not specifically addressing service areas in its written order. The actual certificates (soon to be issued) do not as standard practice make note of the authorized service areas. As noted, the application forms, in providing a list of service areas for applicants to select, direct applicants to select the service areas in which the applicant "intends" to provide service, but the application form is not explicit that such selection is binding and/or that the applicant is limited to such selections, as opposed to just being an informational response regarding the applicant's current intent
CGE broker application: Cases 24-0837-EL-CRS, 24-0836-GA-CRS
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March 19, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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