Download PEI Declaratory Order - Pennsylvania Public Utility Commission

PENNSYLVANIA
PUBLIC UTILITY COMMISSION
Harrisburg, PA 17105-3265
Public Meeting held August 17, 2000
Commissioners Present:
John M. Quain, Chairman
Robert K. Bloom, Vice Chairman
Nora Mead Brownell, Statement attached
Aaron Wilson, Jr.
Terrance J. Fitzpatrick
Petition of Manufacturer’s Association of
Northwest Pennsylvania for a Declaratory
Order
Docket No. P-00991785
ORDER
BY THE COMMISSION:
Before the Commission for disposition is a Petition for Declaratory Order filed on
December 21, 1999, by the Manufacturer’s Association of Northwest Pennsylvania
(MANP). By this Petition, the MANP requests the Commission to conclude that it is not
required to be licensed as an electric generation supplier, as defined in Section 2803 of the
Public Utility Code, 66 Pa. C.S. § 2803, and Section 54.31 of the Commission’s
Regulations, 52 Pa. Code § 54.31.
The MANP asserts that a declaratory order is necessary so as to remove the
uncertainty regarding their “marketing” activities pursuant to an agreement with Exelon
Energy. According to Section 331(f), 66 Pa. C.S. §331(f), the issuance of a declaratory
order is a matter within the Commission’s discretion. Therefore, in order to remove the
uncertainty associated with MANP’s provision of information regarding Exelon’s services
to MANP’s members, we are entertaining this petition. No responses have been filed
opposing this Petition.
Background
The MANP is a trade association that operates as a not-for-profit organization
established under the laws of the Commonwealth of Pennsylvania. The MANP’s members
are located in 17 counties throughout the state. The MANP supports its members by
providing information and services that will assist them in the pursuit of their business and
community interests.
The MANP entered into an Affinity Master Agreement (Agreement) with Horizon
Energy Company d/b/a Exelon Energy (Exelon), an entity licensed as a electric generation
supplier by the Commission at Docket No. A-110028. Pursuant to the Agreement, the
MANP agreed to provide Exelon with a list of the MANP’s members and to send letters of
introduction as well as information to its members regarding Exelon’s services.
Consequently, if a member of the MANP were interested in entering into a contract with
Exelon for the provision of electricity, all contacts would occur directly between Exelon
and the member, with no involvement by the MANP to facilitate the sale. Under the terms
of the Agreement, Exelon is solely responsible for providing the electricity generation;
billing, collecting and/or meter reading; scheduling delivery of the electricity, and holding
title to the electricity before it is transmitted to the MANP’s members.
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MANP’s Petition
By this petition, the MANP requests the Commission to declare that it is not an
electric generation supplier, aggregator, broker, or marketer as defined by 66 Pa. C.S. §
2803 and 52 Pa. Code § 54.31. The MANP asserts that since its activities pertaining to the
generation of electricity are limited only to introducing its members to Exelon’s services, it
is not required to be licensed under the Public Utility Code and Commission’s Regulations.
Discussion
The issue raised by the Petition for Declaratory Order is whether the MANP is
required to be licensed as an electric generation supplier, as defined in Section 2803 of the
Code and Section 54.31 of the Commission’s Regulation, for providing its members with
information regarding Exelon’s services.
The Electricity Generation Customer Choice and Competition Act (the Act), as well
as the Commission’s Regulation, provide that an electric generation supplier must obtain a
license from the Commission in order to provide services in Pennsylvania. 66 Pa. C.S. §
2803, 52 Pa. Code 54.32. Additionally, both the Act and the Commission’s Regulations
include the terms broker, marketers, and aggregators in the definition of electric generation
supplier. Thus, if any of these terms are applicable to an entity wishing to provide service
in Pennsylvania, the entity is an electric generation supplier and must obtain a license.
An aggregator has been defined as “an entity, licensed by the commission, that
purchases electric energy and takes title to electric energy as an intermediary for sale to
retail customers.” 66 Pa. C.S. § 2803, 52 Pa. Code 54.31. From the activities described in
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the Petition, it is apparent that MANP is not purchasing or taking title to energy for sale to
its membership, thus, MANP is not an “aggregator” for licensing purposes.
Nevertheless, it is also necessary to determine whether MANP’s actions come
within the parameters of a “broker” or “marketer” as defined by the Act and the
Commission’s Regulations. A broker or marketer has been defined as “an entity, licensed
by the commission, that acts as an agent or intermediary in the sale and purchase of electric
energy but that does not take title to electric energy.” 66 Pa. C.S. § 2803, 52 Pa. Code
54.31. (emphasis added). Furthermore, the definition of “electric generation supplier”
includes entities that “arrange or market” electricity for sale to end-use customers. The
question is, therefore, whether the activities set forth in the Agreement between MANP and
Exelon make MANP “an agent or intermediary in the sale and purchase of electric
energy...” requiring MANP to obtain a license from the Commission. The resolution of
this issue depends upon the extent of the MANP participation in the sale and purchase of
the electricity.
From the description of the activities in the Agreement, it appears that MANP
exclusively endorses Exelon’s services to its membership. MANP, however, is not
involved in any communications between the member and Exelon or, for that matter, even
arranging for the ultimate sale of electricity from Exelon to the member. If the member
wishes to enter into a contractual relationship with Exelon for the “special” discounted
rate, it must directly contact Exelon. Because the MANP is merely informing its members
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about the services of Exelon Energy, it appears that its activities do not require it to obtain
a license from the Commission.
Moreover, the Commission takes into consideration its recent conclusion that nontraditional marketing groups seeking to participate in the retail gas service market will not
be required to obtain a license so long as the non-traditional marketer meets the following
criteria:
1.
The non-traditional marketer must conduct their transactions through a
licensed natural gas supplier.
2.
The non-traditional marketer:
a) may not collect revenues directly from retail customers due to the
provision of natural gas services;
b) may not require its members or constituents to obtain their natural gas
service through the non-traditional marketer or the licensed natural gas
supplier(s) with which the non-traditional marketer arranges retail service.
c) is not responsible for the scheduling of natural gas supplies, the payment
or remission of taxes due from the sales of natural gas services and are not
responsible for the payment of the costs of the natural gas to its suppliers or
producers.
Proposed Rulemaking Order, In Re: Licensing Requirements for Natural Gas Suppliers,
Docket No. L-00000150, entered April 13, 2000.
The statutory definition of a “natural gas supplier” is similar and just as broad as the
statutory definition of “electric generation supplier”. See 66 Pa. C.S. § 2202. Although the
Commission has not formally acted to establish final regulations regarding the licensure of
non-traditional marketers seeking to enter the electric generation market, we believe that
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the above-mentioned criteria are relevant to the instant question of whether the MANP, a
non-traditional marketer seeking to participate in the retail electric market, is required to be
licensed. Therefore, we conclude that this additional consideration supports our
conclusion that the MANP is not required to be licensed in order to provide service in
Pennsylvania.
Conclusion
For the foregoing reasons, the Commission finds that the MANP is not required to
be licensed by the Commission; THEREFORE,
IT IS ORDERED:
1.
That the Petition of the Manufacturer’s Association of Northwest
Pennsylvania be granted consistent with the discussion contained in the body of this order.
BY THE COMMISSION,
James J. McNulty
Secretary
(SEAL)
ORDER ADOPTED: August 17, 2000
ORDER ENTERED: August 18, 2000
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