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retail energy competition

Delaware Approves New Consumer Protection Rules for Comment

The Delaware Commission on November 1, 2016, approved for publication and comment new consumer protection rules that largely resemble the rules that were published in October and which we blogged about here.  We expect the newly-approved rules to appear in the December 1, 2016 Delaware Register, followed by a comment period. This marks the near-end of a proceeding that has lasted for more than four years.

The primary stakeholders in the proceeding had agreed to certain modifications to the version of the rules published in October, but two non-consensus issues remained for the Commission’s consideration. The two issues involved the length of the rescission period and issues pertaining to the customer lists that the utility, Delmarva Power, provides to licensed retail suppliers. The Commission ruled on those matters on November 1, and a written, formal order is expected at the Commission’s November 15 meeting.

The newly-approved rules are a total re-write of Delaware’s current rules. They include numerous protections for consumers and include rules for suppliers who want to sell electricity to Delaware customers.  The rules will require suppliers to provide specific information to customers during the marketing and enrollment processes to ensure that customers fully understand the electricity products they are considering. The rules also obligate suppliers to provide information to current customers during at certain times during the contractual relationship. Not only that, but the rules to into great detail concerning marketing channels such as door-to-door and telemarketing, as well as other matters.

Once published, there will be a comment period and we expect the rules to become final at some point in the first quarter of 2017. Our firm has represented the Retail Energy Supply Association in this proceeding. If you want further information on the proposed Delaware rules or have questions about retail energy competition and consumer protection, call one of our energy regulations lawyers.

Charlottesville Projects Add to Solar Energy Growth

Charlottesville Tomorrow has a nice piece on Riverbend Development’s plans to install a sizable solar panel array on one of its properties in the town. This follows on an installation earlier this year by the company on Starr Hill Brewery, nearby in Crozet, Virginia.

As we noted here, when we attended a ceremony in Charlottesville for the opening of a solar energy project within the Albemarle Public Schools, this area of the state is seeing a big interest in solar. Governor McAuliffe was on hand then and sent a very positive message to the whole Commonwealth that solar projects and the jobs they bring are good for Virginia.

If you want to know more about Power Purchase Agreements like those used in Albemarle County or about other opportunities for renewable and solar energy projects in Virginia, contact any of our Virginia energy lawyers.

Panelists Cover Rates and Users and Regulators Respond

Brian Greene co-managing member of the firm, spoke on the “response panel” at the Mid-Atlantic Distributed Resources Initiative Working Group Meeting. Brian’s panel responded to presentations made by an earlier panel involving rate design issues and retail price integration. Entitled “Retail Rate Design for Default Energy Service,” and held at the offices of District of Columbia Public Service Commission on March 22, 2016, the subject is a hot topic among utilities and utility commissions around the country because of the effect that various rate design elements (e.g., fixed charges, demand charges, energy charges, etc.) have on consumer bills and consumer decisions regarding distributed energy resources.

Brian’s comments were, in large part, focused on the various products and services available in today’s competitive retail electricity market in states where consumers have the right to choose their energy supplier. Brian also discussed the importance of allowing retail suppliers access to their own customers’ smart meter data on a next-day basis or sooner. Suppliers today have the ability to process enormous amounts of data relating to energy usage and present the data to their customers in a way that the customer can understand it. These products, combined with data access and today’s technology, empowers customers to better understand and take control over their energy usage.

Brian also spoke about the need for proper cost allocation among default energy service and distribution service. In many states, customers that their electricity from a retail supplier continue to pay the utility’s costs related to the provision of default service even though the customer is not taking default service. That is because many default service costs are embedded in regulated delivery service rates and have not been properly allocated to default service. As an example, a portion of a utility’s call center is used for default service related activity, but typically the utility recovers those costs in delivery service rates. This means that the default service rate does not include all of the utility’s costs to provide that service, which is important because a retail supplier must include these same types of costs in its prices that it charges to its customer and cannot rely on a guaranteed income stream.

After lunch, the initial panel and the response panel fielded questions from the audience.

If you would like to know more about retail rate design issues or anything related to the energy distribution industry, please contact Bran or any of the energy lawyers at our firm.

DC Public Service Commission Rejects Exelon-Pepco merger

On Friday, February 26, 2016, the District of Columbia Public Service Commission (the “Commission”) denied approval to Exelon’s $6.8 billion acquisition of Pepco Holdings, which would have made Exelon the largest electric utility in the United States.  Commissioners Betty Ann Kane and Joanne Dotty Ford rejected the proposed settlement on four grounds, while Commissioner Willie Phillips dissented by arguing that the settlement was in the public interest.  In a separate 2-1 vote, the Commission provided certain changes to the settlement that, should the parties adopt, would result in the Commission’s approval.  Pepco and Exelon have 14 days to consider such changes to the settlement.

Maryland Commission Adopts New Consumer Protection Rules

On February 10, 2016, the Maryland Public Service Commission approved revised consumer protection regulations governing the retail sale of electricity and natural gas. The revised rules include several substantive changes relating to how retail suppliers operate in Maryland. The changes involve additional up-front pricing disclosures to customers, and additional notices throughout each customers’ contract term. One of the more significant operational changes is a new requirement that utilities process a customer’s request to switch electricity providers within three business days. The revised Rules also include entire new sections addressing retail suppliers’ relationships with their marketing and sales agents.

We have previously blogged here, here, and here at various stages of this two-year rulemaking. In sum, the Commission initiated this rulemaking in response to the extreme cold weather conditions in the beginning of 2014 that caused wholesale energy prices to spike dramatically. Generally speaking, customers who had signed up for monthly variable retail priced contracts, which are tied to wholesale prices, saw their retail rates increase considerably. The primary policy goals of the revised rules is to assist customers in better understanding the energy products they are considering, to require certain notices to customers during their contract term, and to afford customers the opportunity and flexibility to change their energy provider quickly to take advantage of pending offers.

The next step for implementation will be publication of the final rules in the Maryland Register. While the timing of the publication is uncertain, it is anticipated that the rules will become effective at some point in March 2016. Retail suppliers will need to review their contract language, third-party verification scripts, training materials, and other areas to ensure they are complying with the new rules. Retail suppliers that are unable to comply with any of the new requirements will need to seek a waiver from the Commission.

If you have any questions about Maryland’s new retail energy supplier rules or the process for seeking a waiver, please contact one of GreeneHurlocker’s energy lawyers for more information.

New Maryland Working Group May Give Retail Suppliers Better Access to Meter Data

canstockphoto17677884The Maryland Public Service Commission has established a new Working Group to develop statewide protocols that will allow retail electricity suppliers to access their customers’ smart meter interval data from the utility on a near real-time basis. In a recent Order, the Commission established the Working Group in response to concerns expressed by the Retail Energy Supply Association (RESA) and NRG Retail Affiliates (NRG Retail) that while Baltimore Gas and Electric Company (BGE) collects the customer interval data, the manner in which BGE makes the data available to suppliers via the BGE portal is so cumbersome and burdensome that it is impossible for suppliers to access their own customers’ data. RESA and NRG Retail contended that BGE lagged behind other utilities in Maryland such as Pepco and Delmarva Power, both of which allow retail suppliers to pull hourly usage batch data on a next-day basis. The Commission directed the Working Group must file a report by March 1, 2016.

Suppliers’ access to their customers’ smart meter interval data in near real-time is a major advantage of smart meter deployment and will allow retail suppliers to expand their product offerings. Efficient data access allows retail suppliers to quickly process the data and present the results in plain English to their customers. This information exchange enables customers to make a connection between what they are doing at a given time and their electricity usage at that time, and they can change their usage behavior and shift their energy consumption as quickly as possible. Older data is simply less valuable and useful to customers, and makes it harder for retail supplies to “engage” with customers.

Technology has dramatically altered consumer expectations and changed how we buy products. We are now living in “Amazon time” where we expect instant access to timely information, from the number of steps we take in a day, to watching basketball games online, to getting election results in real-time. We can buy Alaskan salmon and have it shipped across the country for dinner tomorrow night, and we can buy handmade cannoli from the famous Mike’s Pastry in Boston and have it shipped next-day delivery for a dinner party. (Yes, I did that; yes, it works; and yes, they are awesome.) The electricity usage data available from smart meters is another example of how technology has changed the electricity landscape, and is in line with the broader consumer expectations of wanting access to information and products quickly.

If you have an questions about smart metering or the Maryland working group’s progress, please contact on of our Maryland energy lawyers.

U.S. Supreme Court: Demand Response is Here to Stay

On January 25th, the Supreme Court issued a landmark decision for the electricity industry, and particularly for demand response providers, settling considerable unease and speculation as to the future of the demand response industry. The term “demand response” generally refers to programs allowing individual customers or groups of electricity customers to curtail their energy usage during times of peak demand, and receive a payment for such reductions. The Supreme Court explained demand response as follows: “wholesale market operators can sometimes—say, on a muggy August day—offer electricity both more cheaply and more reliably by paying users to dial down their consumption than by paying power plants to ramp up their production.”

The 6-2 decision in Federal Energy Regulatory Commission v. Electric Power Supply Association et al., with Justice Scalia joined by Justice Thomas dissenting, upheld the Federal Energy Regulatory Commission’s (“FERC”) Order 745, which sets the rules for demand response pricing. Order 745 requires that demand response be compensated at the full price paid to power generators – the locational marginal price (“LMP”). The Supreme Court’s decision overruled a decision by the Court of Appeals for the District of Columbia Circuit that: (1) FERC lacked authority to issue Order 745 because the Order regulates the retail market; and (2) alternatively, Order 745’s compensation scheme, paying full LMP for demand response, is arbitrary and capricious under the Administrative Procedure Act. The D.C. Circuit’s decision was overruled on both counts.

The threshold issue was whether FERC has jurisdiction to regulate demand response compensation. On that issue, the Supreme Court found that FERC’s regulation of demand response compensation is consistent with its authority to regulate wholesale market rates. FERC’s demand response compensation scheme is exclusively directed at the wholesale market. Any natural consequences of such wholesale market regulation at the retail level do not render the regulatory scheme unlawful as exceeding FERC’s jurisdiction. As the Supreme Court explained, “every aspect of FERC’s regulatory plan happens exclusively on the wholesale market and governs exclusively that market’s rules.” Moreover, FERC’s demand response compensation scheme is consistent with the Federal Power Act’s “core purposes of protecting ‘against excessive prices’ and ensuring effective transmission of electric power.”

The Supreme Court also rejected arguments that Order 745 overcompensated demand response by setting compensation for demand response at LMP. The alternative pricing methodology, supported by Order 745 opponents, would deduct the savings customers would receive from not using power from the LMP (the LMP-G (generation) formula). Instead, Order 745 will remain in effect, and demand response will continue to be compensated at the full LMP, where demand response offers satisfy FERC’s “net benefits” test, ensuring that accepted demand response offers will save consumers money.

This decision paves the way for continued investment in demand response programs, promoting system reliability and lower electricity prices by allowing demand response to offset higher-cost generators that would otherwise raise wholesale market prices. The long-awaited decision is critical to the future of demand response. As a member of the Advanced Energy Management Alliance (“AEMA”), GreeneHurlocker shares the enthusiasm of its demand response clients and the AEMA on this decision. (A copy of the AEMA’s press release is attached here.)

For questions about the Supreme Court decision or assistance with any demand response matters, please feel free to contact one of GreeneHurlocker’s energy and regulatory lawyers.

DC Changes Retail Supplier Reporting Requirements

D.C. Public Service Commission Changes Filing Requirements for Retail Electricity Supplier Semi-Annual Fuel Mix and Air Emissions Reports

Licensed retail electricity suppliers are generally required to report the fuel mix and air emissions of the energy they supply. Suppliers often have questions about the technical reporting requirements for fuel mix and emissions, including both (1) the information that must be provided and (2) the procedure for reporting that information. The lawyers of GreeneHurlocker have assisted clients with interpreting the regulatory requirements for emissions and fuel mix reports, as well as understanding how and where to file the reports, in Maryland, the District of Columbia, and Delaware. Recently, as suppliers have shifted to offering more green energy and renewable energy products, some suppliers have had difficulty interpreting the nuanced disclosure requirements regarding these renewable energy products.

The D.C. Public Service Commission has even issued orders to show cause against retail suppliers that failed to meet their fuel mix and emissions reporting obligations. Some of the suppliers subject to past show cause orders missed the filing deadline, and others were unaware of the appropriate PJM system mix to include in their reports. Licensed suppliers are obligated to fulfill the applicable reporting requirements in each jurisdiction in which they operate and, as we have learned from experience in D.C., it is important that all suppliers understand the applicable reporting requirements.

In an Order issued on December 17, 2015, the D.C. Commission revised its docketing system for fuel mix reports, providing a new docket where retail suppliers will be required to file future fuel mix and air emissions reports. As retail suppliers prepare for future fuel mix and emissions filings in D.C. and Maryland, and particularly for the upcoming D.C. semi-annual fuel mix report deadline in June of 2016 under the new docket, the energy attorneys at GreeneHurlocker welcome any questions regarding these compliance matters, or any other issues relating to the retail energy sector.

Coffee Was Great; Solar Focus Even Better

solar focus textWe’ve just returned from Solar Focus 2015, the mid-Atlantic’s premier education and networking meeting for participants in the solar and renewable energy industry. As in past years, it was held in Washington, DC, and attracted a sell-out crowd. In an effort to keep everyone’s energy high, our firm sponsored the coffee breaks and afternoon snacks.

In addition to all the great friendships we renewed and strengthened, along with the impassioned industry leaders we met for the first time, we attended some fantastic and thought provoking sessions on current and developing opportunities. We had the good fortune to moderate a panel on breaking into untapped markets — a topic that we will continue to follow and discuss here in the weeks to come.

Meanwhile, we snapped a few photos, so if you were not able to be there, here’s a little of what you missed. If you want to know more about the conference, the Maryland-Washington, DC-Virginia Solar Energy Industry Association (who put on the conference) or the legal and regulatory environment the solar industry lives in, just call any of our energy and utility lawyers.

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Solar-Focus-2015-2 Solar-Focus-2015-4

Delaware Hearing How to Improve Consumer Choice for Electricity

transmission towers for electricityIn October and November, 2015, the Delaware Commission (Commission) and the Division of Public Advocate (DPA) held two workshops for stakeholders to discuss ways to enhance the visibility of and improve participation in customer choice for electricity products and services.  The group also examined what, if any, options might be available to enhance customer choice that the Delaware Commission and stakeholders might not have been considered. The Commission accepted written comments on November 6, 2015.

GreeneHurlocker’s lawyers represented the Retail Energy Supply Association in the meetings and submitted these comments.  RESA identified market-enhancing programs and services such as a purchase of receivables program that would require the utility to purchase the receivables of retail suppliers; implementing “accelerated switching” to allow customers to more quickly take advantage of suppliers’ offers; requiring the utility to allow customers to keep their supplier if the customer moves within the service territory, which is not operationally possible now and can harm customers if they move residences; requiring the utility to allow suppliers to access prospective and current customer account information with customers consent; and revisiting the manner in which the utility currently purchases its power to serve the customers who do not choose a supplier. It will be interesting to see what the Commission and DPA do with the various comments received.