Md. PSC Fines Peninsula Energy Services for Supplying Interstate Pipeline Customer Without License, Grants Broker License

The Maryland PSC fined Peninsula Energy Services Company, Inc. $1,826.22 for acting as a gas supplier without the requisite license, and granted Peninsula Energy Services a license to operate as a gas supplier and broker serving non-residential customers.

The fine represents the unpaid Commission assessments that Peninsula Energy Services would have paid had it been licensed during its previous activity as a load serving supplier.

The Commission debated whether a higher fine should be levied given that Peninsula Energy Services is an affiliate of Chesapeake Utilities, and served one Maryland account as a result of being assigned Chesapeake's off-system portfolio as Chesapeake exited supplying that business. Commissioners said that Peninsula Energy Services should have become aware of the licensing requirement when it assumed the Maryland customer from its affiliate, given that its affiliate is familiar with Maryland regulations.

Notably, the lone Maryland customer served by Chesapeake prior to licensure was, based on discussions at yesterday's open meeting, a customer directly connected to Chesapeake's interstate pipeline network and not its distribution system.

Under the annotated code of Maryland, a "gas supplier" means a person who: (i) sells: 1. gas; 2. gas supply services; or 3. competitive billing services for gas supply services; or (ii) purchases, brokers, arranges, or markets gas or gas supply services for sale to a retail gas customer. In other words, had Peninsula Energy Services been acting solely as a broker to the interstate pipeline customer, and not a load serving supplier, its requirement for licensure for such activity is less clear, depending upon whether the definition of a "retail" customer includes end users not behind the distribution system.

Ultimately, Commissioners said that while Peninsula Energy Services should have been aware of the licensing requirement when it was assigned the interstate pipeline customer, Commissioners believed that Peninsula Energy Services was not aware of the requirement, and did not engage in any further activity once learning of the licensing requirement when it began investigating the requirements to act as a broker in other parts of Maryland. Accordingly, the PSC did not elect to raise the fine beyond the unpaid Commission assessment.