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Regulator Says Only Supplier Agents Or Registered Aggregators Can Enroll Customers

Aggregators May Not Be Compensated By Suppliers; Any Entity Receiving Compensation From Supplier May Only Enroll Customers When Acting As Supplier's Legal Agent, And Thus Must Be Trained, Monitored By Supplier

Regulator: "Unregulated Entities" May Not Enroll Customers

March 29, 2023

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Copyright 2010-21
Reporting by Paul Ring •

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The Connecticut PURA has ruled on a motion from its Office of Education, Outreach, and Enforcement (EOE) which had sought to clarify the entities which may enroll customers for retail electric supply

See background on the question here

PURA declined to issue a clarification as it said that, "the issue at hand is already sufficiently clear."

In brief, under PURA's ruling, brokers who are compensated by suppliers, including third-party websites marketing retail energy plans, may not enroll customers, unless they meet the standard for being a supplier agent (which means the broker must receive training and monitoring from the supplier).

PURA did reiterate that, "an 'electric supplier' is a 'person, . . . that is licensed by the [Authority] in accordance with [Conn. Gen. Stat. § 16-245], that provides electric generation services to end use customers in the state using the transmission or distribution facilities of an electric distribution company . . . .' Conn. Gen. Stat. § 16-1(24)."

PURA said, "In addition, 'no person . . . shall sell or attempt to sell electric generation services to end use customers located in the state using the transmission or distribution facilities of an electric distribution company unless the person has been issued a license by the Public Utilities Regulatory Authority in accordance with the provisions of [Conn. Gen. Stat. § 16-245] . . .' Conn. Gen. Stat. § 16-245(b)."

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

"Accordingly, licensed electric suppliers and their agents may sell electric generation services to customers," PURA said

Conn. Gen. Stat. § 16-245o(h)(1) and the Marketing Standards require suppliers to train their agents, monitor their agents, and to be responsible for their agents’ actions.

PURA said, "An 'electric aggregator' is 'a person . . . [that is required to register with the Authority in accordance with Conn. Gen. Stat. § 16-245,] 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. §16-1(25). The Authority has consistently held that '[electric aggregators] are the customers’ agents.' See, e.g., Decision, March 16, 2011, Docket No. 10-06-24; DPUC Review of the Current Status of the Competitive Supplier and Aggregator Market in Connecticut and Marketing Practices and Conduct of Participants in that Market, p. 6. Accordingly, electric aggregators’ 'loyalty must lie with the customers, and as such [electric aggregators] may not represent or act as an agent or representative for any [electric suppliers] at any time, in any capacity.' Id., pp. 6-7. Additionally, electric aggregators may not receive compensation from an electric supplier for the enrollment of a customer with that supplier. See id., p. 39."

"Consequently, to the extent an entity is being paid by and acting on behalf of a licensed supplier, that entity is an agent of the electric supplier and shall be trained accordingly," PURA said

"An entity that gathers customers to negotiate with an electric supplier is an electric aggregator under state law -- regardless of the terminology employed by the entity in describing its services -- and shall be registered as such; further, such entity may not receive compensation for the enrollment of a customer with a supplier from anyone other than the customer(s)," PURA said

However, PURA said, "if an entity represents customers ... then by definition the entity has gathered together customers for the purpose of negotiating their purchase of supply..."

PURA noted that, "RESA posits that earlier Authority rulings may have interpreted the term electric aggregator too narrowly. RESA Written Comments, March 9, 2023, pp. 2-3. The Authority will undertake prospective evaluations of electric aggregator license applications consistent with this Motion Ruling, the Marketing Standards, applicable statutes, and the facts specific to the individual application."

"In sum, 'it would make little sense for the Legislature to have provided the Authority with broad regulatory powers governing customer enrollment by third-party supplier agents and electric aggregators yet simultaneously allow for the existence of unregulated entities enrolling consumers beyond the protective sphere of the Title 16 and the Authority’s Marketing Standards,'" PURA said

PURA said, "To the extent an entity other than a licensed electric supplier, registered aggregator, or an agent of either a licensed electric supplier or registered aggregator, is enrolling customers with a licensed electric supplier, the Authority may issue a notice of violation for violations of Title 16, regulations, or orders of the Authority. See Conn. Gen. Stat. § 16-41(a)."

The Authority declined to distinguish between residential and non-residential customers regarding which entities may enroll such customers with an electric supplier.

An electric supplier is required to annually file with the Authority a list of any aggregator or agent working on behalf of such supplier. Conn. Gen. Stat. § 16-245o(h)(9).

Docket No. 14-07-20RE01


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