Will New Definition of Broker Ensnare All Intermediaries and Marketing Agents (Even MLM)?

The Delaware PSC, as part of newly proposed retail electric market rules, has proposed a new definition for "broker," and the proposed definition is so broad that it would appear to include anyone and any entity involved in the sale or marketing of electricity.

Specifically, under the newly proposed rules, "broker" would be defined as having, "the same definition set forth in 26 Del. C. §1001, and shall also include anyone who conducts marketing activities including, but not limited to, promotion and sales of electricity and related services to Retail Electric Customers."

For reference, the definition of broker under 26 Del. C. §1001 which is included under the definition of broker in the newly proposed rules, is, "a person or entity that acts as an agent or intermediary in the sale or purchase of, but that does not take title to, electricity for sale to retail electric customers."

Brokers must be licensed by the Delaware PSC.

The proposed rules do include a separate definition for agent, which means, "a Person who conducts marketing or sales activities, or both, on behalf of an Electric Supplier, including an employee, a representative, an independent contractor or a vendor."

However, the rules aren't clear in defining the difference between an agent and broker (or if any difference even exists, since 26 Del. C. §1001 includes the generic term "agent" under the definition of broker).

Moreover, the proposed rules do not provide any discussion regarding whether certain agents or similar entities operating under a licensed supplier (e.g. an MLM representative or contracted agent) needs to be licensed itself.

Arguably, multi-level marketing representatives, affinity groups (charities, trade associations, chambers of commerce, etc.), and contracted agents are entities which, "conduct[] marketing activities," and are engaged in the "promotion" of retail electric service, and therefore fall within the newly proposed definition of broker, absent any sort of carve-out for agents falling within the supplier's responsibility and license.

See Related Story Today: Latest Delaware Proposal Still Doesn't Allow for Real-Time Supplier Enrollments Via Telemarketing?

Regulation Docket 49