PUCO Withdraws Certification Of FirstEnergy Advisors As Broker, Denies Company's Request To Continue Advising Existing Customers Until Contracts Expire

November 3, 2021

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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In response to a matter on remand from the Ohio Supreme Court, the Public Utilities Commission of Ohio today vacated its prior order granting Suvon, LLC d/b/a FirstEnergy Advisors certification as an electric broker/aggregator

In doing so, PUCO denied a motion from FirstEnergy Advisors to continue advising its current customers until it can fulfill the terms of all existing customer contracts

PUCO said that, "The Commission notes that, pursuant to R.C. 4928.10, Suvon may not engage in the marketing, solicitation, sale or provision of aggregation service or power brokerage service until Suvon has been certified by the Commission to provide such service."

"Accordingly, the Commission cannot permit Suvon to continue advising its current customers as Suvon requests," PUCO said.

PUCO stressed that, "However, nothing in this Order on Remand should be construed to preclude customers from continuing to be served under existing contracts arranged by Suvon prior to this Order on Remand or preclude Suvon from receiving compensation for such contracts, to the extent provided by each contract. The Commission further notes that customers to whom Suvon has supplied aggregation or power brokerage service will continue to be served by their certified respective power marketers."

The Ohio Supreme Court recently reversed the Public Utilities Commission of Ohio’s order granting FirstEnergy Advisors certification as a competitive retail electric service (CRES) power broker and aggregator, as the Court essentially stated that PUCO did not support its order with findings that must be included in PUCO decisions, and that PUCO failed to address where FirstEnergy Advisors is fit and capable of complying with all commission rules, given affiliate concerns. The Supreme Court remanded the matter to the Commission for further proceedings (the court's order is discussed further below).

FirstEnergy Advisors had on November 2 filed to withdraw its certification application, but had also requested that it be permitted to advise its current customers until it can fulfill the terms of all existing customer contracts.

FirstEnergy Advisors intends to re-apply for a broker/aggregator license in the future.

FirstEnergy Advisors provided the following statement concerning the matter:

"In response to the recent Ohio Supreme Court decision, FirstEnergy Advisors has proactively filed a motion with the Public Utilities Commission of Ohio to withdraw its application for an energy broker and aggregator license. The company plans to file for a new license in the future."

--- Statement from FirstEnergy Advisors

In its request concerning existing customers that was denied by PUCO, FirstEnergy Advisors had said, "Prior to the Supreme Court Order, the Supreme Court had never reversed a Commission order awarding CRES certification approval to an applicant. Accordingly, the legal and practical uncertainty created by the Supreme Court Order is unprecedented."

"Given these exigent circumstances, the Commission should grant the Motion and permit FirstEnergy Advisors to continue advising its existing customers until it can fulfill its contractual obligations to those customers," FirstEnergy Advisors had said in the motion

FirstEnergy Advisors had said in the motion that such treatment would effectively treat FirstEnergy Advisors in the same manner as a suspended CRES certificate holder under Ohio Adm. Code 4901:1-24-13(B), as such rule 4901:1-24-13(B) explicitly permits the suspended CRES certificate holder to, "continue to provide all services it is obligated to provide under contract to its existing customers," while also prohibiting advertising or contracting with new customers during the pendency of the suspension

FirstEnergy Advisors’ had said in the motion that the grant of its motion would protect FirstEnergy Advisors’ existing customers, "from the potential harm, disruption, or confusion created by the Supreme Court Order[.]"

While seeking to serve existing customers until its contractual obligations to those customers expire, FirstEnergy Advisors had said in the motion that it will not advertise, solicit, or contract with any new customers.

FirstEnergy Advisors had further said in its motion that, "If the Motion is granted, FirstEnergy Advisors intends to file a new certification application in the near future. In doing so, FirstEnergy Advisors will squarely place its new certification application before the Commission for all stakeholders to thoroughly review and evaluate. Thus, filing a new CRES certification application will allow all parties and the Commission to create a more transparent certification process, without a cloud of uncertainty hanging over it, where FirstEnergy Advisors can demonstrate that it satisfies all relevant legal criteria to be certified as a CRES broker/aggregator consistent with the dictates of the Supreme Court Order. Filing a new CRES certification application will avoid any appearance of impropriety that may be associated with recently released text messages that suggest communication between FirstEnergy Corp.’s former CEO and the former PUCO Chair related to FirstEnergy Advisors’ pending certificate. See Exhibit A attached [see page 12]. In sum, a fresh start serves the interests of everyone."

Court Decision

In reversing PUCO's grant of the broker license to FirstEnergy Advisors, the Supreme Court found that, "By statute, PUCO must file 'findings of fact and written opinions setting forth the reasons prompting the decisions arrived at.' R.C. 4903.09. The order in this case falls well short of this requirement. Further, in deferring consideration of issues relating to FirstEnergy Advisors’ relationship with its parent corporation to another proceeding, PUCO violated its statutory duty to find, before approving a certification application, that a company is fit and capable of complying with all commission rules."

"To approve FirstEnergy Advisors’ application, PUCO was required to find that the company was 'managerially, financially, and technically fit and capable of' (1) 'performing the service it intends to provide' and (2) 'complying with all applicable commission rules and orders.' Ohio Adm.Code 4901:1-24- 10(C)(1) and (C)(2). { 24} Neither PUCO’s order nor the staff report it adopts explains how FirstEnergy Advisors is managerially, financially, and technically fit to provide electricity aggregator and brokerage services," the Court said

"Similar deficiencies arise when we consider the requirement that PUCO find that FirstEnergy Advisors is fit and capable of complying with all applicable commission rules and orders. The staff report simply recites that FirstEnergy Advisors 'has stated that it intends to comply with all commission rules.' That report, however, does not explain how FirstEnergy Advisors’ application establishes that the company’s managers and employees possess the skill, experience, and training necessary to provide broker and aggregator services. Nor is it self-evident how the staff’s recitation of FirstEnergy Advisors’ statement that it intends to comply with all commission rules satisfies PUCO’s obligation to find that FirstEnergy Advisors is fit and capable of complying with commission rules. Rather than relying on the company’s stated intent, PUCO should have identified plans, procedures, and protocols FirstEnergy Advisors has in place that show the company is fit and capable of complying with all applicable commission rules and orders," the Court said

"We also conclude that PUCO violated its duty to find that FirstEnergy Advisors was 'fit and capable of complying with all applicable commission rules' by deferring all consideration of the corporate-separation issues to the audit case," the Court said

"Here, PUCO made no finding at all about FirstEnergy Advisors’ capability or fitness to comply with these rules. There was no examination of the shared employees nor of procedures and policies FirstEnergy Advisors had in place to prevent information from passing improperly between shared employees. Instead of determining whether FirstEnergy Advisors had shown that it could comply with the code of conduct, PUCO deferred all issues regarding corporate separation requirements to the audit case. Pub. Util. Comm. No. 20-0103-ELAGG, Entry on Rehearing at 11, 33 (June 17, 2020)," the Court said

"This PUCO cannot do. Under R.C. 4928.08(B), a company cannot provide competitive retail electric services to consumers 'without first being certified.' And to be certified, PUCO must find that an applicant is 'fit and capable of complying' with the commission’s rules. Ohio Adm.Code 4901:1-24-10(C)(2). These rules provide no flexibility for PUCO to defer a finding about a CRES provider’s fitness and capability to comply with the rules until after PUCO has certified the applicant," the Court said

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