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Tag Archive: Brian Greene

Calpine and Direct Energy Win Again, Continue to Provide Renewable Energy in Virginia

The Virginia State Corporation Commission (the “Commission”) denied Dominion Energy Virginia’s (“Dominion”) July 16, 2019 petitions for declaratory judgment in Case Numbers PUR-2019-00117 and PUR-2019-00118 by Final Order on September 18, 2019. Dominion’s petitions sought to have the Commission standardize “around the clock,” “control of renewable capacity” requirements for competitive service providers (“CSPs”) to serve customers under Virginia Code § 56-577 A 5 (“Section A 5”). That section provides a statutory right to customers of all classes to purchase “electric energy provided 100 percent from renewable energy” from a CSP unless the utility has its own 100% renewable energy tariff. Dominion’s application for a 100% renewable energy tariff is pending before the Commission, and Dominion had refused to process enrollments submitted by Calpine Energy Solutions, LLC (“Calpine”) and Direct Energy Business, LLC (“Direct Energy”) under Section A 5 in the interim and initiated these cases at the Commission.

The Commission previously granted Calpine’s and Direct Energy’s requests for injunctive relief, requiring Dominion to process enrollments while these cases are pending. We blogged about that here.

Dominion’s petitions took aim at Calpine and Direct Energy, seeking a determination that CSPs seeking to serve under Section A 5 must establish that they can supply customers with electric energy provided 100 percent from renewable energy on an “around the clock” basis and that the CSPs must have “control” over “renewable capacity.” The Commission flatly rejected Dominion’s positions and declared that both Calpine and Direct Energy provided information to reasonably establish that they have contracted for sufficient renewable energy to match renewable supply with a participating customer’s load on a monthly basis, which is consistent with Section A 5 and Commission precedent.

Regarding Commission precedent, the Commission refused to adopt Dominion’s interpretation of a prior order approving Appalachian Power Company’s Rider WWS (“Rider WWS Order”), which Dominion believes requires a CSP to have “control of sufficient renewable generation resources, including renewable capacity and associated renewable energy, to enable it to serve the full load requirements of the customers it intends to serve.” The Commission’s refused to provide the requested declaration, explaining that the Rider WWS Order did not require “’renewable capacity,’ nor did it define ‘full load requirements’ to mean (as argued by Dominion) ‘full load at all times’ or ‘full load requirements around the clock.’” Significantly, the Commission’s Final Order makes clear: “Nothing in [the Rider WWS Order], however, found that [Appalachian Power Company’s] proposal was the only way to comply with Section A 5.”

The crux of the Commission’s decision relied upon its close reading of Section A 5. “The plain language of Section A 5 also says ‘energy,’ not ‘capacity.’” In acknowledging this critical distinction, the Commission put a finer point on Dominion’s efforts to muddy the waters between “energy” and “capacity” requirements, despite the fact that Section A 5 requires customers to purchase renewable electric “energy” – not “capacity.” In the same way, the Commission examined closely Dominion’s request for more stringent matching standards, noting several times that in other proceedings, Dominion has taken positions inconsistent with those it takes in its petitions for declaratory judgment: “There is nothing in the plain language of Section A 5, however, that mandates Dominion’s “100% of the time” (i.e., “around the clock”) requirement.”

The Commission also scrutinized Dominion’s proposal from a consumer protection perspective, finding that Dominion’s “100% of the time” standard would adversely affect a customer’s right to purchase renewable energy – essentially, upending the entire aim of Section A 5. Dominion’s argument would read certain renewable generating sources (e.g., wind or solar) out of the statute because of their intermittency regardless of the amount of nameplate capacity or peak load served. Finally, the Commission evaluated Dominion’s proposed standard with special focus on the fact that Virginia’s existing monthly matching standard is already one of the most stringent in the country for states with renewable energy markets, as other states generally require customer load and renewable supply to be matched on a yearly basis.

The Commission declined to accept Dominion’s proposed language that would adopt a new standard for Section A 5, presented for the first time at the hearing on August 20, 2019. The Commission reasoned that to do so would contravene the Commission’s past rejection of “capacity,” “peak demand,” or “100% of the time” requirements – including the Commission’s rejection of Dominion’s past requests (notably in the Rider WWS proceeding) for “around the clock” supply of renewable energy pursuant to Section A 5. Similarly, the Commission held that Dominion’s proposal at the hearing regarding what Dominion believes the current law should reflect “improperly goes beyond the specific relief requested in the Petitions for Declaratory Judgment… [and] does not reflect current Commission precedent and is otherwise procedurally improper.”

The Conclusion in the Commission’s Final Order makes clear that:

  • Commission precedent permits a CSP to match customer load with renewable supply on a monthly basis and does not requires CSPs to provide “renewable capacity”;
  • Direct Energy and Calpine have satisfactorily demonstrated that they can supply their customers with electric energy provided 100 percent from renewable energy on a monthly matching basis;
  • Direct Energy and Calpine are required to continue providing information as directed in the Final Order – regarding each CSP’s customer load and wholesale generation contracts, in accordance with Section A 5, the Commission’s Rules Governing Retail Access to Competitive Energy Services, as well as Dominion’s Competitive Service Provider Coordination Tariff; and
  • Even if Dominion’s new proposal were procedurally appropriate, which it is not, the Commission further finds that: (1) the plain language of Section A 5 does not mandate – as a matter of law – adoption of Dominion’s proffered standard; and (2) matching customer load with renewable supply on a monthly basis represents a reasonable standard under Section A 5, and Dominion’s proposed standard is not necessary in order to implement Section A 5 in a reasonable manner,

GreeneHurlocker represents Calpine in these proceedings.
If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

VA SCC Grants Injunction, Orders Dominion to Move Customers

wind turbines and solar arraysThe Virginia Commission has entered an Order on Enrollments granting motions for injunctive relief filed by Calpine Energy Solutions, LLC and Direct Energy Business, LLC. In the Order, the Commission directed Dominion Energy Virginia to “immediately resume processing enrollment requests under Section A 5 for customers who wish to purchase from Direct Energy or Calpine.”

Under Va. Code Section 56-577 A 5 (“Section A 5”), a customer shall be permitted to purchase “electric energy provided 100 percent from renewable energy” from a competitive service provider (“CSP”) if the utility has not filed an approved 100% renewable tariff. To date, Dominion does not have an approved 100% renewable tariff, and several nonresidential customers, with multiple accounts, have signed contracts with Calpine and Direct, two CSPs, to take retail service under Section A 5.

In July, Dominion filed petitions for declaratory judgment asking the Commission to determine that Calpine and Direct had not demonstrated that they were providing “electric energy provided 100 percent from renewable energy” to their customers as required by Section A 5. Calpine and Direct are disputing Dominion’s allegations as well as Dominion’s proposed standard for providing service under Section A 5. In the interim, however, Dominion had refused to process pending and future enrollments until the case was decided.

On July 22, 2019, Calpine and Direct filed for injunctive relief, asking the Commission to require Dominion to process their respective customers’ enrollments – thereby allowing the customers to switch to Calpine and Direct – while the cases are pending.

The Commission held a hearing on the injunction on August 7 and held an expedited hearing on the merits of the cases on August 20, 2019.

In a footnote to the order, the Commission held that Calpine and Direct had satisfied the elements needed for the issuance of an injunction, including: (a) absent the instant order, Calpine and Direct Energy will suffer irreparable harm; (b) Calpine and Direct have no adequate remedy at law; and (c) the Commission is satisfied of Calpine’s and Direct Energy’s equity. The Commission also noted that “A temporary injunction allows a court to preserve the status quo between the parties while litigation is ongoing.”

Our firm is representing Calpine in the proceedings.

If you have questions about this case or electric service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Maryland to Implement Supplier Consolidated Billing

Finding that supplier consolidated billing (SCB) represents the next logical step for Maryland to fully implement customer choice, the Maryland Public Service Commission on May 7, 2019 issued an order authorizing SCB for retail electric and natural gas service in Maryland. In this historic order, the Commission found that SCB could support the growth of retail competition in Maryland and is consistent with the Commission’s policies to promote competition. SCB, by augmenting the existing billing arrangements, should assist suppliers in establishing brand identity and clarifying the products available to customers. At the same time, SCB should facilitate the development of new and innovative products and services and increase the number of Maryland households that shop for electricity and natural gas. Based on these and other conclusions, the Commission found that “it is now appropriate to proceed with the development of SCB.”

The case was initiated by five retail suppliers – NRG Energy, IGS Energy, Just Energy Group, Direct Energy and ENGIE Resources – and the Commission held a hearing in February 2018. We’ve blogged about this case here and here and also posted a video blog here.

In the order, the Commission established the SCB Workgroup and immediately tasked it with developing an implementation timeline within the next 60 days. The timeline, filed in early July 2019, calls for full-on SCB implementation by September 1, 2022.

To guide the SCB Workgroup, the Commission addressed numerous substantive elements of the SCB program, the highlights of which include:

Supplier Qualifications to Provide SCB:

The Commission held: “any proposed regulations should comprehensively address the capabilities necessary to ensure that these functions are performed on par with existing utility offerings. Further, the regulations should be tailored to demonstrate that a supplier can meet the rigorous demands of increased customer service and dispute resolution functions, complex billing requirements, and the quality assurance and record keeping necessary to handle utility charges that may contribute to potential utility disconnections.”

Authority of SCB Providers to Disconnect Customers for Nonpayment:

The Commission rejected the petitioners’ request to allow SCB suppliers to initiate disconnects for non-payment. This had been a central element of the petitioners’ case because it is necessary to manage bad debt, similar to the utilities. In response to those concerns, the Commission will require that utilities purchase the outstanding distribution charges of a delinquent customer account upon the customer’s return to standard offer service (SOS), as further discussed below. For other charges, the SCB provider must resort to the traditional remedies of other non-regulated businesses, including reporting to credit agencies, seeking monetary judgments in court, and pursuing collection activities.

Purchase of Receivables (POR) and Supplier Bad Debt:

The Commission held that SCB suppliers must provide POR to the utili8ty on substantially the same terms as provide in utility consolidated billing (UCB). The Commission directed the workgroups, including the SCB Workgroup, to identify and propose an equitable payment posting priority system and other protections that may be necessary to ensure that any charges contributing to a disconnection are properly handled. Additionally, the Commission agreed with the petitioners that suppliers need some ability to protect themselves from the risk of non-payment. The Commission held that, after reasonable efforts to collect, the supplier should not be required to hold any debt attributable to the customer’s distribution charges paid under POR. Where a supplier can demonstrate the amount of unpaid distribution charges, the utility should repurchase those charges at a zero discount rate unless the SCB Workgroup can provide alternative calculations which are supported by a compelling analysis.

Customer Protection and Customer Education:

The Commission held that a supplier that offers SCB is required to provide all the same consumer protections, disclosures (including the utility’s price to compare), notices,
and billing information required of a regulated utility. This includes providing all surcharge line items and compliance with all current COMARs related to consumer protections. The Commission directed the SCB Workgroup to identify and justify any deviations from or additions to existing consumer protection standards. The SCB Workgroup should consider new disclosure and notice requirements for how utilities and SCB suppliers communicate the varying relationships to the customer, the content of past due notices by SCB suppliers, and the utility notices for customers selecting SCB.

Cost Recovery:

The Commission made no findings regarding cost recovery. The Commission directed the SCB Workgroup to identify and estimate, with as much detail as possible, these and any other costs and benefits related to SCB. The Commission directed the SCB Workgroup to consider varying cost recovery mechanisms and present either a consensus approach or options for Commission consideration. The Commission recognized that the SCB Workgroup might not reach a consensus on cost recovery but said, “this should not delay progress towards proposing regulations in other areas.”

If you have questions about SCB or electric or natural gas retail service in general, please contact one of GreeneHurlocker’s energy and regulatory lawyers.

Delaware Implementing Purchase of Receivables Program for Electricity Suppliers

At long last, the Delaware Public Service Commission entered an order adopting Delmarva Power’s proposed purchase of receivables (“POR”) program effective July 1, 2019. We previously blogged on this issue when Delmarva initially filed its proposal. The effective date was delayed by one month, but Delmarva will purchase suppliers’ receivables effective the end of May so that suppliers are not harmed by the delay.

The going-in rates for the first year of the program are in the table below. These are important because they represent the “haircut” that suppliers must accept when Delmarva purchases their receivables.

Residential Small commercial Large commercial Hourly Priced (LGS, GSP, GST)
Payment factor 99.3833% 99.6591% 99.8818% 100.00%
Discount factor 0.6167% 0.3409% 0.1182% 0.0000%

For more information, please contact one of our energy lawyers.

Maryland PSC Requests Comments on New RFP for Retail Suppliers

The Maryland Public Service Commission issued a Notice of Opportunity to Comment seeking comments on a new “Retail Supplier Load Shaping RFP.” The Commission want to consider “programs designed to demonstrate the ability to shape residential load profiles using innovative business models.” Comments on the RFP, a copy of which is attached to the Notice, are due April 9, 2019.

The RFP states that:

“The primary goal of this RFP is to identify pilots that demonstrate an ability to shape customer load profiles through load shifting, peak shaving, and energy efficiency. Applicants can propose any mechanism for load shaping such as sending appropriate price signals (real time rates), using technology to control usage (controllable thermostats), payment of rebates or behavioral modification treatments. A secondary goal is to test whether load shaping can lower customer bills or reduce the customers’ overall effective rate for electricity by avoiding energy usage during high cost periods. Customer satisfaction will be surveyed at the pilot’s conclusion.”

There’s some background here. In early 2017, the Commission established Public Conference 44 with various working groups. Three working groups involved areas where the retail supply market could be improved or could expand to provide additional services to Maryland customers. One of those working groups involved rate design issues and sought to develop TOU pilot programs. The Commission approved TOU programs for the utilities, which are now being marketed to customers. The Commission also approved an RFP to establish retail supplier programs. However, and the Commission in November 2018 issued a letter order holding that the bids received were not compliant and directed the utilities to reject them.

The Commission has now proposed changes to the prior RFP and has issued the current Notice to elicit more involvement from retail suppliers in a rate design program. The Commission seems determined to engage the retail supplier community in this effort, stating that, “[a]s Maryland moves forward with grid modernization, the retail supply community can play an important role in supporting policy goals, including more active efforts to shape load profiles.”

If you have questions or would like more information about community solar projects or other regulatory issues, contact Brian Greene or any of our mid-Atlantic energy lawyers.

Moves Towards Supplier Consolidated Billing

In this Energy Update, Brian Greene explains how Maryland’s Public Service Commission is soliciting comments on the implementation of supplier consolidated billing. For more information about billing plans and regulation, contact Brian or any of our mid-Atlantic energy lawyers.

Regulators Continue to Press on Consumer Rules

March 2017 Energy Update Brian Greene

The March Energy Update features Brian Greene explaining efforts in Delaware, Maryland and the District of Columbia to improve consumer protection rules that apply to selling commodities direct to consumers in the energy and natural gas markets.

Delaware Adopts New Consumer Protection Rules for Electricity Sales

The Delaware Public Service Commission has approved new Electric Supplier Rules for final publication in the April 1, 2017 edition of the Delaware Register. The rules will become canstockphoto17677884effective April 11, 2017.

The new rules replace Delaware’s existing Electric Supplier Rules and introduce numerous provisions that affect virtually everything that retail suppliers do – including not only obtaining a license but also marketing electricity and enrolling new customers.  In fashioning the new rules, the stakeholders looked primarily to Maryland’s and Pennsylvania’s recently-revised rules, and then tailored them to Delaware.  Retail suppliers will be required to make additional upfront disclosures in marketing and contract documents, and provide specific training for their agents. The rules directly address telemarketing and door-to-door sales and add requirements that do not exist today. As an example, for door-to-door sales, a supplier will be required to obtain a wet or electronic signature and also to perform a third-party verification. The rules also have a new definition and requirements for third-party verifications.

Our firm was very involved in negotiating the new rules and arguing non-consensus items before the Commission. If you’re a retail supplier eyeing Delaware as a new service territory, or if you’re already serving in Delaware, please feel free to call our energy lawyers with any questions.

 

For Retail Energy Suppliers – Compliance Matters Part 2

(Originally posted at LinkedIn.com)

Last week, we introduced Part 1 of our two-part discussion about the importance of retail electricity and natural gas suppliers complying with state laws. We focused on requirements in the contract, the contract summary, certain required disclosures, and so forth. This week, we’ll hit on items relating to marketing, such as your company’s marketing materials, telemarketing, and door-to-door activities. Our lawyers are counseling retail suppliers daily on these and other regulatory issues, so please feel free to contact us at (804) 864-1100 if you have any questions or desire additional information.

Have you checked your marketing materials?

Marketing materials are the primary means of communicating offers to prospective customers. It’s safe to say that all states require marketing materials to contain accurate information and not mislead customers. Additionally, states differ in their requirements that the materials include certain information in specific circumstances. In Pennsylvania and soon in Delaware, if you quote a price, you must also provide a table showing the price per kWh for an average residential customer (and small commercial in Delaware) using 500, 1,000, or 2,000 kWh of electricity. Most states require other disclosures such as a license number and that the state commission does not regulate the supplier’s prices. You want to make sure that marketing materials used in specific states follow that state’s requirements.

Are you training your agents properly?

In the past few years, states have revised their rules to include specific areas of training for supplier’s agents, including telemarketing and door-to-door agents. Roughly, there are about 12 topics that must be included in agent training. Those topics include certain state and federal laws and can include local laws as well. When we review training materials, we recommend a robust slide deck and reference materials that can be produced to a state commission or a public advocate if necessary to show the extent of the training. Many suppliers will require the agent to sign a verification form that he or she completed the training. Some suppliers require a test at the end. What’s in your company’s training materials, and are you ready to produce the documents if you are required to do so?

What’s in your telemarketing sales scripts?

Are your telemarketing agents adequately explaining the product and the material terms and conditions? Agents are generally required to discuss all material terms during the sales portion of the call, and some states have specific disclosures that the agent must make. Are you reviewing your telemarketing sales scripts periodically and ensuring they comply with state laws? Also, while some states require that you record either the sales portion of the call or the third-party verification, others require that you record both. And if you’re recording, in what manner and for how long are your maintaining the recording?

How about that third-party verification?

Many states are now including specific questions to be asked during the TPV. Maryland has a specific requirement that the sales agent not be present and that the TPV agent instruct the customer how to terminate the TPV without enrolling. There’s also an issue of when you need a TPV – states are different, and the TPV can also be done utilizing a process other than the telephone.

Can I cold-call thousands of potential customers and sign them up without a wet or electronic signature on a contract?

Not in Maryland, you can’t. This has tripped up more than one supplier. The Maryland Telephone Solicitations Act has specific exemptions, and if you don’t meet one of those then you have to obtain the customer’s wet or electronic signature to enter into a contract with that customer. If you satisfy one of the exemptions, there are regulations that still apply to the enrollment. This is a perfect example of the importance of knowing a state’s law before you start marketing.

Does my door-to-door contract meet state requirements?

There’s the substance of the contract (and the related Notice of Cancellation), but there’s also the formatting. We’ve seen suppliers get penalized for, or at least forced to litigate, issues such as not placing language in a contract where a statute says it must be placed, or for not putting specific language in bold, or for not providing a sufficient number of copies to the customer.

So there you have it – a list of compliance checks that is enough to get you started but not enough to ensure 100% compliance. If we tried to cover every item, our little two-part series would turn into a big fat book. The takeaway here is that there are a lot of rules in each state, and failing to comply with any one of them could land your company on the regulatory hot seat. As we said in Part 1, compliance is not sexy, but You Gotta Do It (tip: when playing this gif, hover your cursor over the screen, and on the bottom right you’ll see a volume button. Turn on the volume.).

GreeneHurlocker’s lawyers handle a broad range of regulatory and transactional matters related to electricity, natural gas, and water. Our lawyers work extensively with retail electricity and natural gas suppliers throughout the Mid-Atlantic. We’re also heavily involved in the renewable energy business, including solar, biomass and wind. We do other stuff, too. We encourage you to contact us with any questions.

For Retail Energy Suppliers – Compliance Matters

(Originally posted at LinkedIn.com)

If you’re a retail electricity or natural gas supplier and you think no one will ever file a complaint against you, or that no state commission will ever ring you up with a show cause order – just stop it now. While you can’t control complaints filed against your company, you can control how closely your company adheres to laws regarding marketing to, contracting with, enrolling, and serving customers. In other words, you can significantly reduce the risk of complaints.

In the past few years, Maryland, Pennsylvania, Delaware, D.C., and others have started or completed the process of revising their consumer protection rules, adding numerous requirements for retail suppliers who do business in those jurisdictions. Is your company adhering to these new rules? Has your company researched various applicable state statutes in areas such as telemarketing and door-to-door marketing to ensure that you’re compliant?

We get it. Resources devoted to compliance can be costly and certainly don’t produce revenues. But compliance will allow your company to avoid the even greater expense of responding to more and more complaints and, inevitably, participating in a show cause proceeding and enduring the bad press that comes with it. So consider compliance a necessary evil and You Gotta Do It.

Since we’re involved all the time with clients facing compliance requirements, we have developed a quick-hit list of items you should assess internally to ensure your company’s compliance. This is Part 1, which focuses on the retail supplier’s contract with the customer. In Part 2, which we’ll publish next week, we’ll cover items relating to marketing. In the interim, if you have any questions, you are welcome to call one of our energy regulatory lawyers at (804) 864-1100.

The below items are not listed in any particular order, and rules vary by state, but you’ll get the idea.

What’s in your contracts?

Most states have a list of material terms and conditions that must be included in the contract. They include all fees and charges, early termination fees, how the customer and the supplier may terminate the contract, the duration of the contract, renewal procedures, and so forth. Maryland and Pennsylvania require specific contract language for variable-priced contracts, and as of this writing Delaware is about to join them.

What’s this Contract Summary thingamabob?

Many states now require the supplier to summarize the contract in a table or box, similar to what you see in communications from your credit card company. There can be rules identifying which specific provisions must be summarized. Rules also address when you must provide the summary during the different marketing and enrollment channels (telemarketing, door-to-door, internet, etc.). The summary is a useful tool to assist customers in understanding the most material of the material contract terms.

Do I have to notify variable price customers every month about the next month’s price?

In Maryland and soon in Delaware, you will need to provide the customer with access to the next month’s rate at least 12 days before it becomes effective. If you don’t know the price, you must provide an estimate, and your actual price cannot exceed your estimate. The goal here is to allow customers to see their next month’s price. If they don’t like it, they can switch to a different provider before the new price becomes effective. This new rule works in conjunction with changes in law that allow customers to switch in three business days as opposed to the current timeline which can take up to five or six weeks. The customer’s access to the new price can include posting the new price on a website, or allowing the customer to call the supplier to obtain the new price.

What do I need to say in a renewal letter and when do I send it to the customer?

Each state has different requirements in terms of substance and in the timing of sending the notice to customers. Omitting the required information can result in penalties. Some states require you to highlight any changes to the material terms of the contract. Many states have altered their renewal notice requirements in the past few years, so we recommend that you review your notices to ensure they are compliant.

How’s your on-line enrollment process?

Most suppliers allow customers to enroll online. Just pick your product, enter the relevant info and you’ve authorized a switch to the new supplier. But are you providing all the necessary information at the right times? Does your site prompt the customer to print the contract? Are you doing what’s required to ensure that the signature qualifies as an electronic signature? Some states are broadening their review of suppliers’ websites during the application process, and certainly consumer advocates are examining the information on the sites to ensure that customers fully understand the products they are considering.

Compliance can seem daunting, and it takes time. At the end of the day, it’s an investment that will make for well-informed customers that choose your company because they understand the product and trust that your company is better than all others. We hope that the above list, and the list we’ll publish next week in Part 2 of our series, provides a starting point for your review, as these are just some of the issues our lawyers see on a daily basis and that every supplier should address in each state in which it operates. Stressing compliance within your company, while perhaps not popular, should lead to a happier, loyal customer base and avoid significant regulatory costs down the road.

GreeneHurlocker’s lawyers handle a broad range of regulatory and transactional matters related to electricity, natural gas, and water. Our lawyers work extensively with retail electricity and natural gas suppliers throughout the Mid-Atlantic. We’re also heavily involved in the renewable energy business, including solar, biomass and wind. We do other stuff, too. We encourage you to contact us with any questions.