Regulator's Staff Says Entity "May Not Represent Customers In Securing Contracts With Suppliers" Without Aggregator Certificate
May 10, 2023 Email This Story Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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The Office of Education, Outreach, and Enforcement (EOE) of the Connecticut PURA has stated that an entity, "may not represent customers in securing contracts with suppliers," without an electricity aggregator certificate
That is a departure from the main focus of the prior discourse concerning the licensing of aggregators and entities authorized to "enroll" customers, although support for EOE's position is in PURA's recent motion ruling (though the interpretation has not been previously emphasized outside of "enrollment")
To set the table:
Conn. Gen. Stat. § 16-1(a)(25) states, "'Electric aggregator' means (A) a person, municipality or regional water authority that gathers together electric customers for the purpose of negotiating the purchase of electric generation services from an electric supplier, or (B) the Materials Innovation and Recycling Authority, if it gathers together electric customers for the purpose of negotiating the purchase of electric generation services from an electric supplier, provided such person, municipality or authority 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, and may include an electric cooperative established pursuant to chapter 597].]" [emphasis added]
Statute further provides that, "No electric aggregator shall negotiate a contract for the purchase of electric generation services from an electric supplier unless such aggregator has (A) obtained a certificate of registration from the Public Utilities Regulatory Authority..."
As previously reported, PURA in March issued a motion ruling concerning the interplay of agents, aggregators, suppliers, and enrollments.
What prompted the motion was concern about entities "enrolling" customers -- particularly entities which are not any of the following: (1) a licensed supplier, (2) a registered aggregator, or (3) an agent of a supplier or aggregator (as an example, a third-party rate board shopping site)
None of the pleadings in response to this concern addressed in depth the definition of enroll or enrollment. From context, it was clear that the term enrollment was being used beyond the meaning of an EDI transaction initiating a switch, and it appeared that enrollment was being used to reflect either: the selection of a supplier, the execution of a supplier contract, or the conveyance of an executed contract to the supplier by another party, such as an aggregator. It is notable; however, that the motion ruling did not address what constitutes an enrollment. A cursory examination of the relevant Conn. Gen. Stat. sections, as well as the marketing standards, also does not appear to define enrollment (the marketing standards appear to use the term enrollment to mean contract execution or the initiation of a switch, rather than relating to selection of a supplier from a negotiated set of offers, or final contract negotiation in a broader sense).
While ultimately, given the language in PURA's March 30 motion ruling discussed below, the question of how enrollment is defined is irrelevant, we note it here because the focus of the discourse has previously been on enrollment (whatever that may mean). Two follow-up letters from EOE with directives to suppliers and aggregators concerning PURA's March 30 ruling heavily focused on enrollments, and entities permitted to accept and provide enrollments
The two EOE directives did not contain any language concerning the entities which may represent customers in securing contracts (or contractual negotiation)
As noted above, statute defines aggregator as an entity which "gathers together" (not just "gathers") electric customers for the purpose of negotiating the purchase of electric generation services
PURA in its March 30 ruling explicitly said that, "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)."
As previously reported, to reach this conclusion, PURA, in a footnote, endorsed the interpretation of EOE, and stated, "if an entity represents customers…then by definition the entity has gathered
together customers for the purpose of negotiating their purchase of supply."
EOE had specifically said in the pleading cited by PURA, "[I]f an entity represents customers (i.e., represents the customers’ interests
and serves as the customers’ agent, not a supplier’s agent), then by definition the entity
has gathered together customers for the purpose of negotiating their purchase of supply
(the moment the entity has more than one customer, it has, by definition, gathered
customers; presumably, an aggregator could not function as a business if it had only one
EOE's latest statement about entities needing an aggregator certificate to represent customers in securing contracts came as an aggregator (in this case Worthington Energy Consultants LLC (WEC)) withdrew a pending application for an aggregator certificate
In response to the withdrawal, EOE cautioned WEC that, "EOE reminds WEC that without an aggregator certificate it may not represent customers in securing contracts with suppliers and no supplier may accept a customer from WEC unless WEC is that supplier’s agent."