Daily Email







Retail Electric Supplier Newly Petitions Arizona Corp. Commission For Certificate To Provide Service To Arizona Customers

Says Recent Court Case Compels ACC To Rule On Certificate Request, Clarifies ACC Lacks Plenary Authority To Supersede Prior Legislative Mandate For Choice Because Ratemaking Authority Not Infringed

Proposes Range Of Rates, Price Cap For Service

August 4, 2021

Email This Story
Copyright 2010-21
Reporting by Paul Ring •

The following story is brought free of charge to readers by EC Infosystems, the exclusive EDI provider of

Green Mountain Energy ("Green Mountain"), a subsidiary of NRG Energy Inc. ("NRG"), applied at the Arizona Corporation Commission for a Certificate of Convenience and Necessity (CC&N) to provide competitive electric generation service in Arizona in accordance with the Energy Competition Act

Specifically, Green Mountain seeks to be certificated in the service territories of the state's two largest investor-owned electric utilities, Arizona Public Service Company and Tucson Electric Power Company, to serve all customer classes, including residential customers. Green Mountain will only provide plans with 100% renewable power

In its application, Green Mountain Energy states that it, "anticipates serving up to 20,000 customers within a 5 year time period, expecting 80% of customers to be classified as Residential , 15% Small Business, and 5% Commercial and Industrial."

Consistent with Arizona regulation, Green Mountain is proposing two "tariffs" for the Commission's approval, one for residential customers and one for all other customer classes

In keeping with Arizona law, Green Mountain is proposing the Commission approve tariffs that include a proposed "range of rates." Green Mountain noted that such price "bands" are used in the state's competitive telecom market

Furthermore, Green Mountain said that, "An important part of any price band is the necessary inclusion of a price cap, or maximum possible price. The setting of this maximum price has the important impact of protecting consumers from runaway prices. In fact, because of this maximum price, Green Mountain's residential customers will have greater protection from unexpected price increases then [sic] the current monopoly utility customers have today."

Green Mountain's proposed residential tariff provides that Green Mountain Energy's charges for electric generation ("Energy Charge") shall be charged at a rate which is (i) not less than the Minimum Price which shall not be less than Green Mountain Energy's marginal cost of providing such service, and (ii) not more than the Not to Exceed Price. The Minimum Price shall be the generation rate of the incumbent utility that would otherwise serve the Customer minus 35% and the Not to Exceed Price shall be the generation components of the incumbent utility retail rate schedule that would otherwise serve the Customer plus 35%.

"Only the Energy Charge portion of the monthly bill will be used in the calculation of the Minimum Price and the Not to Exceed Price. Any monthly fixed Base Charges will be excluded," the residential tariff provides

"The contract will contain a monthly fixed charge ··("Base Charge") to cover costs incurred by Green Mountain Energy, such as charges assessed by the utility for access to the utility's distribution and billing systems; or related to customized C&I product structures [sic]," the residential tariff states

"The RES ESA [residential service agreement] may contain provisions for the cost pass-through of certain component charges not included in the Energy Charge, but that are required or related to the electric generation provided by Green Mountain Energy. These components will only consist of costs imposed by the relevant utility or the Arizona Corporation Commission. The Minimum Price and the Not to Exceed Price do not include any such cost pass-through charges," the residential tariff provides

Green Mountain proposes that, consistent with existing or proposed Tariffs, the Customer will pay the following Capacity Reserve Charge (to compensate the utilities) that will be used by the utility for system reliability purposes: a. Within the Service Territory of Arizona Public Service: $5.5398/kW-month; b. Within the Service Territory of Tucson Electric Power: $5/kW-month

For C&I customers, Green Mountain's proposed tariff provides for a fixed rate with a similar +/- 35% band versus the applicable utility rate, or an index rate with the band set at +/- an applicable wholesale index price

In its application, Green Mountain said that, "valid written authorization from customers is mandated to switch service providers."

Elsewhere, in discussing enrollment, Green Mountain states in the application that, "Customers complete an application and provide their authorization to switch their service to Green Mountain by signing a tablet or paper agreement in-person, or an electronic signature for online enrollments. Telephone enrollments are recorded. Only the account holder or an authorized person may complete an enrollment application. Third Party Verification (TPV) is used in the case of in-person and telephonic enrollments to confirm the customer's understanding of the transaction as well as to confirm authorization for a switch in service providers."

Green Mountain said that the ACC has already adopted schedules for APS and TEP to permit suppliers to use utility consolidated billing (UCB, supplier consolidated billing (SCB), or dual billing. Green Mountain said that it currently intends to use UCB for the vast majority of customers, but may use SCB in the future

Green Mountain noted that while the ACC previously adopted customer protection and related rules for the retail electric market, there remains uncertainty related to the enforceability and legal status of the Commission's Rules, including Rl4-2-1612.

In order to avoid any question about the enforceability of the rules, Green Mountain is asking for the Commission Order approving the CC&N to require compliance with the terms of Rl4-2-1612, thereby making each of its provisions applicable to Green Mountain whether or not the Rules themselves are fully in effect.

Several suppliers have in the past decade sought CC&Ns from the ACC, but the ACC has not ruled on the petitions. Over a dozen CC&Ns were granted in the late 1990s, but these were later vacated

Green Mountain said that, under Arizona's longstanding Energy Competition Act (the "ECA"), energy providers have the right to petition the Commission for issuance of a certificate to provide competitive retail electric generation service in Arizona.

Green Mountain said that, "A recent Arizona Supreme Court decision, Johnson Utilities, L.L. C. v. Arizona Corporation Commission, 249 Ariz. 215, 468 P.3d 1176 (2020) [a water case], clarifies that the ECA is binding on the Commission. Under Johnson Utilities, because the ECA's command to issue certificates to competitive providers does not infringe on the Commission's exclusive ratemaking authority, the Commission must comply with the ECA and grant this application if it is complete."

"The Johnson Utilities court explained that the Commission's permissive authority is neither plenary nor exclusive. Rather, 'the Commission exercises its permissive authority concurrently with the legislature,' as the provision granting that power 'does not, either expressly or impliedly, limit or divest the legislature of its police power to protect the health, safety, and welfare of the public,'" Green Mountain said

"Johnson Utilities clarified that if a legislative mandate -- in this case the ECA -- does not intrude on the Commission's exclusive ratemaking authority, then such mandate is binding on the Commission ... it is clear the ECA does not intrude on the Commission's exclusive constitutional ratemaking authority and, therefore, the ECA is binding on the Commission," Green Mountain said

Green Mountain said that the ECA provides that, "[a]fter December 31, 2000 service territories . . . shall be open to electric generation service competition for all retail electric customers for any electricity supplier that obtains a certificate from the commission pursuant to § 40-207 or any public power entity."

"Additionally, it [the ECA] states that suppliers 'shall obtain a certificate' from the Commission before offering their services to the public, and it ordered the Commission to adopt certain rules implementing the ECA by December 31, 1998 -- though it did not require the Commission to adopt rules specifically concerning the issuance of certificates to competitive providers. Therefore, if the ECA is controlling on the Commission, the Commission must issue certificates to competitive providers that otherwise meet the application requirements for a Certificate," Green Mountain said

NEW Jobs on
NEW! -- Senior Account Operations Analyst -- Retail Supplier
NEW! -- Energy Procurement Manager
NEW! -- Natural Gas Retail Analyst -- Retail Supplier -- Houston
NEW! -- Associate Director of Market Strategy -- New York/Anywhere
NEW! -- Energy Risk Professional -- Retail Supplier -- Houston
NEW! -- Energy Customer Support Specialist -- Retail Supplier -- Houston
NEW! -- Business Development Account Executive - Indirect Broker Sales -- Retail Supplier -- Houston
NEW! -- Customer Engagement Manager -- Retail Supplier -- Houston
NEW! -- Energy Customer Service Specialist
NEW! -- Energy Sales Executive
NEW! -- Senior Energy Intelligence Analyst
NEW! -- Energy Advisor

Email This Story


Copyright 2010-21 Energy Choice Matters.  If you wish to share this story, please email or post the website link; unauthorized copying, retransmission, or republication prohibited.



Daily Email