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Md. PSC Defers Action on Utility Choice International Broker Applications

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September 30, 2010

The Maryland PSC deferred action on the electricity and natural gas broker applications of Utility Choice International, LLC, which the Commission considered at yesterday's administrative meeting.  Chairman Douglas Nazarian said that the Commission would issue an order as quickly as it can.  

Commissioners asked Utility Choice International various questions concerning its network marketing operations, training, product type, and other issues.  Although there was some discussion, Commissioners did not engage in any extended questioning regarding whether independent representatives for network or direct marketers require individual broker licenses, which has been the most significant issue in the case (prior coverage here).  

Chairman Douglas Nazarian did suggest, however, that he believes there is a distinction depending on whether an independent representative of a broker is marketing products from a single provider versus multiple providers in determining whether that individual representative requires a broker license.  

Nazarian did not tip his views as to whether an independent representative of a broker which markets the products of a single supplier requires an individual license (which is the model Utility Choice International uses; its representatives only offer service from a single supplier); however, Nazarian said that there is a distinct potential that any independent representative of a broker offering products from multiple suppliers would be functioning as a broker themselves as thus require their own license.  This is because, Nazarian said, the independent representative would be advising the customer on which of the several suppliers offering service through the broker to choose, and would thus be acting as an intermediary which is one of the standards for broker status in Maryland.

Commissioner Susanne Brogan expressed concern with variable rate products (which Utility Choice International will be offering on the gas side), citing the potential for customers to be unaware of the potential for large spikes during the summer.  Brogan asked the Office of People's Counsel regarding this issue, and OPC said that it may be appropriate to address in OPC's proposed rulemaking possible disclosure standards and/or definitions for various product types, to educate customers and enable accurate comparisons.

   
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