Curtailment Service Providers Now Required to Obtain Supplier License in Maryland

Curtailment service providers (CSPs) must obtain electricity supplier licenses from the Maryland PSC to serve customers in the state, the Maryland PSC ordered yesterday (9241).

The Commission found that that the services CSPs provide in Maryland fall within the definition of electricity supply services contained in PUA Sec. 1-101(j), and thus require a license.

The term "electricity supply services" is not defined in the statute, but it is included in Sec. 1-101(j) as an addition to "electricity" as well as "competitive billing services" and "competitive metering services."

"While the Commission agrees that demand response does not constitute electricity, the aggregation of demand response resources is a service directly related to and comparable with the supply of electricity," the PSC said.

The Commission further said that FERC's recent order on demand response compensation, which requires demand resources to be treated in the same manner as generation resources, "tips the analytical balance."

"[A]lthough they [CSPs] are not selling electricity as such, CSPs are selling a service that aggregates, and secures payment for, an electricity resource that is treated comparably in the wholesale electricity market with electric generation," the PSC said.

"Accordingly, the Commission finds that CSPs do provide electricity supply services which they purchase from Maryland customers and sell to PJM, and therefore that they must obtain electric supplier licenses in order to do business in Maryland."

The PSC directed Staff to submit, by September 30, 2011, proposed amendments to the electric supplier license application form to adapt it for CSPs.

Once the amended form is published, CSPs will have 90 days to file their application for a license, and the Commission will process those applications as quickly as possible.

"In the meantime -- and uniquely to this context, since applicants for electricity supplier licenses normally cannot do business in Maryland before their application is granted -- CSPs may continue their business activity in Maryland, subject to existing law and regulations," the PSC said.

The Commission also directed the establishment of stakeholder process in order to examine the types of information available from CSPs to be reported to the PSC, which could aid the Commission in its resource adequacy determinations.