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Companies Respond To Allegations Of Conducting Broker Activity Without a License, Seek Dismissal Of Complaint At PUC

Respondents Note Operating As A "Consultant" Does Not Require A License

December 13, 2019

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Copyright 2010-19
Reporting by Paul Ring •

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Ryan Boucher, RES Consulting LLC (f/k/a Energy Solutions Consulting, LLC or ESC), and Fidelis United Energy Solutions, Inc. (collectively, the Respondents) have jointly filed a response to a complaint filed at the Public Utility Commission of Ohio by H.P. Technologies, Inc. against the Respondents, as Respondents said that at all times they operated under a PUCO broker license or as an agent of a PUCO-certified broker, and that, in any event, the alleged activities amount to consulting which PUCO precedent provides does not require a broker license

As exclusively first reported by, H.P. Technologies, Inc. alleged that RES engaged in providing aggregation and/or broker services in Ohio from a period beginning on or before July 2018 through at least May 2019, without obtaining certificates from the Commission. According to the complaint, Boucher served as president of ESC. According to the complaint, Boucher now serves as COO of Fidelis.

H.P. sought, among other things, an order from PUCO rescinding Fidelis’ CRES and CRNGS certificates to provide aggregator/broker services in the State of Ohio, based on Boucher's employment there and an allegation that Boucher's prior activity makes Fidelis unfit to hold a certificate

See more background on the complaint here

The Respondents said in a motion to dismiss that, "Respondents Ryan Boucher, RES Consulting, LLC ('RES'), and Fidelis United Energy Solutions, Inc. ('Fidelis') (collectively, 'Respondents'), admit to an ongoing business disagreement with Complainant H.P. Technologies, Inc. ('H.P.') relating to the conclusion of Respondent Boucher’s employment with H.P. and family strife with his stepfather Dennis Giancola, current President of H.P. In fact, H.P. is already pursuing contractual and related claims in the Court of Common Pleas against Mr. Boucher based on allegations mirroring those contained in the Complaint. At the core of this ongoing dispute, H.P. asserts that Mr. Boucher stole away its electric and natural gas customers in violation of contractual restrictions. However, H.P. cannot invoke the jurisdiction of the Public Utilities Commission of Ohio ('PUCO' or 'Commission') simply by presenting a business or family dispute involving the electric and natural gas sectors. The statutes cited by Complainant – Ohio Revised Code ('R.C.') 4905.26, 4928.16, and 4929.24 – give the Commission limited jurisdiction to oversee the actual provision of specific competitive energy services, relevantly aggregation and power broker services."

The Respondents said in their filing that, "The Complaint in this case, relying on conclusory allegations based 'upon information and belief,' asserts that Respondents ran afoul of applicable Commission statutes and rules by providing competitive natural gas and electric aggregation and power broker services without the required certificate issued pursuant to R.C. 4928.08 or 4929.20. However, those allegations amount to an unsupported fishing expedition. Complainant’s speculative assertions lack any concrete factual basis and in some cases omit key facts within H.P.’s knowledge, facts that make clear this case is not about ensuring competitive services are covered by a certificate. Rather, H.P [sic] appears to be attempting to use the Commission’s authority to threaten Mr. Boucher’s business and livelihood in conjunction with an ongoing business dispute. But Complainant cannot rely upon conclusory, ill-founded claims to invoke Commission jurisdiction. H.P. bears the burden of providing 'reasonable grounds' for its Complaint and establishing the Commission’s jurisdiction under R.C. 4905.26. Complainant has failed to provide such reasonable grounds, and the Commission should therefore dismiss these claims in their entirety with prejudice to prevent H.P. from further pursuing a PUCO complaint as a tactic of intimidation and harassment."

The Respondents said in their filing that, "In sum, during the entirety of the 2018-2019 time period called out in the Complaint, Respondents Boucher and ESC were under contract with or acting on behalf of one or more entities with active Commission certificates to provide competitive natural gas and electric services: H.P. itself through August 2018; Energy Deals, LLC through November 2018; MSI as of June 8, 2018; and Fidelis as of July 2019."

The Respondents said in their filing that, "Although Mr. Boucher had abandoned direct certification of ESC, as of June 8, 2018 he had entered into a Sales Agency Agreement with another company, MSI Utilities Inc. ('MSI'), for ESC to act as MSI’s sales representative ('MSI Contractor Agreement').9 MSI Utilities Inc. has Commission certificates to provide both competitive natural gas and electric services in Ohio, and has had active certificates since 2012."

The Respondents said in their filing that, "Throughout these evolving circumstances, Mr. Boucher maintained contact with his existing customer base to keep them apprised of his status and to assist them in adjusting their energy procurement plans accordingly. The following year, in May 2019, Mr. Boucher formed Fidelis and in July 2019 received Commission certificates for Fidelis to provide natural gas and electric power broker and aggregation services."

The Respondents said in their filing that, "At all times in 2018 and 2019, Boucher and/or ESC were under contract as the agents of or acting as the employees of a properly certificated entity: H.P. itself; Energy Deals, LLC; MSI; or Fidelis."

Additionally, the Respondents said that the activities alleged in the complaint do not require a broker license, based on PUCO precedent

The Respondents said in their filing that, "H.P. has not provided reasonable grounds for the Commission to assert jurisdiction over Respondents’ activities as alleged in the Complaint, as required by R.C. 4905.26. The statutory provisions cited by the Complainant – R.C. 4905.26, 4928.16, and 4929.24 – extend the Commission’s jurisdiction only to specific activities of certain types of entities. Those entities within Commission oversight do include an 'electric services company' or 'retail natural gas supplier' under R.C. 4928.01(A)(9) and 4929.01(N) that 'suppl[ies] or arrang[es] for the supply of' either a 'competitive retail electric service' or 'competitive retail natural gas service.' Pursuant to R.C. 4928.16 and 4929.24, the Commission may hear complaints against such entities regarding their provision of a competitive retail electric or natural gas service. Under this statutory scheme, the Commission has jurisdiction over claims against Respondents Boucher and RES only with respect to alleged provision of a competitive service. But merely communicating with customers about electric and natural gas supply, or entering into contracts with customers generally involving electricity or natural gas services – which is all that is alleged in the Complaint – does not subject an entity to the Commission’s regulatory authority."

The Respondents said in their filing that, "The Commission explained thoroughly in Buckeye Energy Brokers v. Palmer Energy Co., Case No. 10-693-GE-CSS, Opinion and Order (Nov. 1, 2011), that an entity does not qualify as a regulated company providing a competitive service merely because it engages in activities with a customer relating to natural gas or electric service. Specifically, the Commission made clear that operating as a 'consultant' on natural gas or electric supply issues does not require a certificate unless an entity’s conduct actually rises to the level of 'engaging in the ultimate decision making process and entering into contractual obligations on behalf of . . . clients with respect to the provision of a competitive service.' Such consulting activity by the respondent Palmer Energy Co. in the Buckeye case included: developing energy procurement requests for proposals ('RFPs') for clients; evaluating responses to those RFPs; obtaining and analyzing data related to the issuance of RFPs; and estimating savings potential and making recommendations about energy procurement. The Commission considered these to be the activities of 'an advisor assisting its clients,' not an entity directly engaged in providing a competitive service, even though Palmer 'held agency status and/or power of attorney for the purpose of working with CRNGS suppliers' and sometimes received payments for its services through supplier contracts."

The Respondents said in their filing that, "Mr. Boucher admits to communicating with customers regarding electric and natural gas services in 2018 and 2019, in order to assist them in continuing to make sensible energy procurement and management decisions despite the uncertainty of his fraying relationship with H.P. He also continued to advise his friends and customers on energy supply arrangements pending his agreement with MSI to act as its independent sales contractor. However, on its own, that consultation does not require formal certification by the Commission. If it did, the Commission would find itself having to certify and oversee a range of entities involved in energy services (energy efficiency providers, financial analysts, perhaps even lawyers) that are related to but do not constitute direct provision of competitive services. In promulgating its rules on certification of competitive suppliers, the Commission drew a line excluding consultants and contractors in order to avoid that result."

The Respondents said in their filing that, "Therefore, in order to invoke the Commission’s certification authority, H.P. must establish that Respondents actually provided competitive services and must provide specific factual allegations in support. Complainant has not done so, offering only conclusory assertions that Respondents Boucher or RES were providing competitive services. Those assertions are not sufficient to constitute 'reasonable grounds' for the Complaint."

The Respondents moved to dismiss the complaint

Case No. 19-2050-GE-CSS

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