"Aggregator" Notes Proposed Requirement For Aggregators To Always Solicit Rates From Multiple Suppliers May Run Contrary To Customer Wishes

June 21, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Sprague Energy Solutions Inc. filed exceptions to a proposed omnibus decision from the Connecticut PURA which, as previously reported, would grant aggregator certificates to 22 entities, but in doing so would also impose various new disclosure and other obligations on the specific aggregator applicants covered by the order.

See background on the PURA proposed decisions here

As previously reported, PURA is now interpreting "aggregator" to mean any entity representing the customer

As previously reported, the proposed aggregator certificate decision notably provides that, "All Applicants must solicit prospective rates for each customer from more than one supplier."

"An entity that obtains rates from only one supplier and enrolls customers with only one supplier is an agent of that supplier," the proposed decision states

Sprague said that it generally does not object to this requirement, but said that there are circumstances that may warrant seeking offers from only one supplier, and sought clarification in any final order

Sprague stated, "First, there are times when customers specifically request that the Company only seek offers from a single supplier. For example, if a customer is happy with its current supplier or has invested time and effort negotiating a supply agreement with which its business is comfortable, when it is considering a renewal, it may only wish to receive pricing from that supplier."

"Second, there may be market driven circumstances that provide the customer with an opportunity to extend and blend their current agreement at a lower price. In those circumstances, the customer is not seeking to change suppliers or could incur an early termination fee if it were to do so. Thus, seeking offers from additional suppliers is not warranted," Sprague stated

"Accordingly, the Company requests that the Authority clarify that it is permitted to seek pricing from a single supplier in two very limited circumstances: (a) when the customer requests the Company only provide pricing from a single supplier; and (b) when the offers being sought are to amend and/or extend an existing agreement between the customer and a particular supplier," Sprague stated

As more fully detailed in our prior story, the proposed decision requires that, once an aggregator has obtained offers from suppliers, the aggregator shall provide each customer with a document that, among other things, describes the aggregator's fee that is included in the prices provided to the customer

Sprague did not object to this requirement generally, but sought clarification, specifically in instances when supplier pricing expires, and the aggregator may adjust its fee in response to refreshed pricing

Sprague stated, "To protect against changes in market conditions, when the Company seeks offers from suppliers, it generally receives pricing that expires if the customer has not entered into an agreement with the supplier by a certain date/time."

"If the customer does not accept an offer during this period, due to changed market conditions, subsequent pricing from that supplier will likely differ. When this occurs, the Company will, at times, adjust the amount of its fee to account for this change. For example, if a customer expected the price (including the Company’s fee) to be $0.10/kWh based on the original pricing received, if the expected market price were to increase significantly, the Company may reduce its fees in order to provide the customer pricing that is closer to that original price point," Sprague stated

"As a consequence, the amount of the Company’s fee will have changed from what was originally disclosed to the customer. To accommodate this situation, the Company requests that it disclose the amount of the fee included in each offer as required but that it also be permitted to include a highly visible statement explaining that, if the customer does not accept one of the offers by the offer expiration date, the Company’s fee may vary but will not exceed a set per-unit rate. The Company would then disclose the amount of its fee to the customer in the notice provided after the customer has contracted with the supplier," Sprague stated

Docket No. 23-04-28 et al.

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