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Reversing Earlier Finding, PURA Categorizes PowerOptions As Aggregator, Grants License

July 24, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Karen Abbott • kabbott@energychoicematters.com

The Connecticut PURA has granted PowerOptions, Inc. an electric aggregator certificate to serve commercial, industrial, municipal and governmental customers

PURA had initially categorized PowerOptions as a broker, which are not licensed in Connecticut, and had declined to issue an aggregator license. PowerOptions asked PURA to reconsider its categorization and provided supplemental information.

In Connecticut, an electric aggregator is defined under §16-1(a)(25) of the General Statutes of Connecticut (Conn. Gen. Stat.) as a person, "that gathers together electric customers for the purpose of negotiating the purchase of electric generation services from an electric supplier," provided such person, "is not engaged in the purchase or resale of electric generation services, and provided further such customers contract for electric generation services directly with an electric supplier."

Conn. Gen. Stat. §16-245o(h)(1) further provides: "Any third-party agent who contracts with or is otherwise compensated by an electric supplier to sell electric generation services shall be a legal agent of the electric supplier."

PURA stated that every three years, PowerOptions conducts a Request for Proposal to select a supplier to serve its membership pool. PowerOptions then pre-negotiates a pricing structure and the terms and conditions with the selected supplier for its members. The selected supplier pays PowerOptions a quarterly fixed fee without regard to sales, and a variable fee that is based on the total consortium sales at a very high threshold level beyond PowerOptions’ current book of business. The fee the supplier pays is for exclusivity to PowerOptions’ membership base, and not for PowerOptions’ agreement to sell generation services for the supplier, PURA said

"Based on the foregoing, the Authority finds that PowerOptions’ manner of operations is consistent with the definition of 'electric aggregator' as provided in Conn. Gen. Stat. §16-1(a)(25). The Authority further finds that the supplier payment PowerOptions receives is not 'to sell generation services,' and, therefore, PowerOptions would not be a 'third-party agent' of the supplier selected for the Company’s membership base."

The Authority rescinded its earlier finding, and granted PowerOptions an electric aggregator certificate to serve commercial, industrial, municipal and governmental customers

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