Subchapter B. ELECTRICITY GENERATION
SUPPLIER LICENSING
Sec.
54.31. Definitions.
54.32. Application process.
54.33. Application form.
54.34. Change in organizational structure or operational status.
54.35. Publication of notice of filing.
54.36. Protests to applications.
54.37. Approval.
54.38. Regulatory assessments.
54.39. Reporting requirements.
54.40. Bonds or other security.
54.41. Transfer or abandonment of license.
54.42. License suspension; license revocation.
54.43. Standards of conduct and disclosure for licensees.
Authority The provisions of this Subchapter B issued under the Public Utility Code, 66 Pa.C.S. § 501; and the Electricity Generation Customer Choice and Competition Act, 66 Pa.C.S. § § 2801—2812, unless otherwise noted.
Source The provisions of this Subchapter B adopted August 7, 1998, effective August 8, 1998, 28 Pa.B. 3760, unless otherwise noted.
§ 54.31. Definitions.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise.
Aggregator—An entity licensed by the Commission, that purchases electric energy and takes title to electric energy as an intermediary for sale to retail customers. See section 2803 of the code (relating to definitions).
Applicant—A person or entity seeking to obtain a license to supply retail electricity or electric generation service.
Broker—An entity, licensed by the Commission, that acts as an intermediary in the sale and purchase of electric energy but does not take title to electric energy. See section 2803 of the code.
Code—The Public Utility Code (66 Pa.C.S. Part I).
Default service provider—The incumbent EDC within a certificated service territory or a Commission approved alternative supplier of electric generation.
Department—The Department of Revenue of the Commonwealth.
EDC—Electric distribution company.
EGS—Electric generation supplier—(i) A person or corporation, including municipal corporations which choose to provide service outside their municipal limits except to the extent provided prior to the effective date of this chapter (Editor’s Note: The reference to ‘‘this chapter’’ refers to the code.), brokers and marketers, aggregators or any other entities, that sell to end-use customers electricity or related services utilizing the jurisdictional transmission and distribution facilities of an EDC, or that purchase, broker, arrange or market electricity or related services for sale to end-use customers utilizing the jurisdictional transmission and distribution facilities of an EDC.
(ii) The term excludes building or facility owner/operators that manage the internal distribution system serving the building or facility and that supply electric power and other related power services to occupants of the building or the facility.
(iii) The term excludes electric cooperative corporations except as provided in 15 Pa.C.S. Chapter 74 (relating to generation choice for customers of electric cooperatives). See section 2803 of the code.
Interim license—A temporary license granted to an EGS under interim standards adopted in the Commission’s Final Order on Licensing Requirements for Electricity Generation Suppliers, entered February 13, 1997 at Dkt. No. M-00960890 F0004.
License—A license granted to an EGS under this subchapter.
Licensee—A person or entity which has obtained a license to provide retail electricity or electric generation service.
Market aggregator—An entity licensed by the Commission, that purchases electric energy and takes title to electric energy as an intermediary for sale to retail customers. See section 2803 of the code.
Marketer—An entity, licensed by the Commission, that acts as an intermediary in the sale and purchase of electric energy but does not take title to electric energy. See section 2803 of the code.
Marketing—The publication, dissemination or distribution of informational and advertising materials regarding the EGS’s services and products to the public by print, broadcast, electronic media, direct mail or by telecommunication.
Offer to provide service—The extension of an offer to provide services or products communicated orally, or in writing to a customer.
Renewable resource—As defined in section 2803 of the code.
Source The provisions of this § 54.31 amended September 14, 2007, effective September 15, 2007, 37 Pa.B. 4996. Immediately preceding text appears at serial pages (247132) to (247133).
§ 54.32. Application process.
(a) An EGS may not engage in marketing, or may not offer to provide, or provide retail electricity or electric generation service until it is granted a license by the Commission.
(b) An application for a license shall be made on the form provided by the Commission. A copy of the application may be obtained from the Commission’s Secretary. The application form will also be made available on the Commission’s Internet web site. An application shall be verified by an oath or affirmation as required in § 1.36 (relating to verification). See section 2809(b) of the code (relating to requirements for electric generation suppliers).
(c) An original of the completed application and supporting attachments shall be filed. An application for a license shall be accompanied by the application fee as established in § 1.43 (relating to schedule of fees payable to the Commission).
(d) Copies of the completed application with supporting documentation shall be served on the following: the Office of Consumer Advocate, the Office of Small Business Advocate, the Department and the Office of the Attorney General and the EDCs through whose transmission and distribution facilities the applicant intends to supply customers.
(e) Incomplete applications and those without supporting attachments, when needed, will be rejected without prejudice. The license application, with supporting attachments, shall be completed in its entirety.
(f) When an answer on the application requires the disclosure of privileged or confidential information not otherwise available to the public, the applicant may designate at each point in the application where information is disclosed that is confidential and privileged.
(1) One copy of this confidential or privileged information conspicuously marked at the top as ‘‘CONFIDENTIAL’’ may be submitted to the Office of the Secretary with the application. An applicant shall provide reasons for protecting this information.
(2) The request for confidentiality will be treated as a petition for protective order and will be ruled on by the Commission in conjunction with the license application.
(3) Pending disposition, the information will be used solely for the purpose of evaluating the license application, and the confidentiality of this information will be maintained consistent with regulations in this title pertaining to confidentiality.
(g) An EGS who has been granted an interim license shall apply for a license under this subchapter by updating its prior license application to include additional and updated information required by § 54.33 (relating to application form). An updated application shall be submitted by December 7, 1998.
(h) An EDC acting within its certificated service territory as a default service provider is not required to obtain a license.
Authority The provisions of this § 54.32 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 504, 523, 1301, 1501 and 1504.
Source The provisions of this § 54.32 amended September 14, 2007, effective September 15, 2007, 37 Pa.B. 4996; amended January 10, 2014, effective January 11, 2014, 44 Pa.B. 249. Immediately preceding text appears at serial pages (330045) to (330046).
§ 54.33. Application form.
(a) The application form includes information that will be used in the evaluation of the financial fitness and technical fitness to render service. This information includes the following:
(1) An identification of the geographic area that the applicant proposes to serve.
(2) An identification of the type of service that the applicant proposes to furnish.
(3) An identification of the class of customers to which the applicant proposes to provide these services.
(4) An identification of the applicant’s utility affiliates.
(5) A description of the applicant’s business structure.
(6) Financial information sufficient to demonstrate financial fitness. This information may include credit ratings and history, audited financial statements, and insurance pertinent to the conduct of the applicant’s business as an electric generation supplier.
(7) Evidence of competency and experience in providing the scope and nature of the applicant’s proposed services. This evidence may include descriptions of the applicant’s prior experience, proposed staffing and employe training commitments, business plans, and agreements, arrangements and contracts for generation, transmission and related services. Documentation of the applicant’s membership in the East Central Area Reliability Coordination Agreement (ECAR), the Mid Atlantic Area Council (MAAC) or other National American Electric Reliability Council (NERC) regional reliability councils shall be submitted if applicable to the scope and nature of the applicant’s proposed services.
(8) Evidence of information demonstrating the applicant’s ability to comply with Commission’s applicable requirements concerning customer billing, customer education, billing and terms of service, and customer information. This evidence may include prior regulatory experience of the applicant, prior business experience in energy or other service-oriented industries, staffing and staff training commitments, agreements, arrangements and contracts for customer education and information service, customer satisfaction survey results, government agency reports and complaint statistics compiled by the Better Business Bureau or similar business organizations.
(9) Certification that notice of the application was published in accordance with § 54.35 (relating to publication of notice of filing) shall be filed with the Commission’s Secretary. The certification shall be notarized and include a photostatic copy of the notices as published. An application will not be considered complete for Commission review without this certification.
(b) The application also directs, under sections 2806(g)(3)(i), 2809(c)(1) and 2810(c)(6) of the code (relating to implementation, pilot programs and performance-based rates; requirements for electric generation suppliers; and revenue-neutral reconciliation), that the applicant provide tax information. This tax information includes:
(1) The name, address, telephone number, electronic numbers and addresses used to transmit tax and related information of the persons responsible for preparing and filing the applicant’s Pennsylvania tax returns.
(2) Trade names or fictitious names used by the applicant.
(3) The type of business association (for example, sole proprietor, partnership and corporation).
(4) The names of the owners, general partners or corporate officers.
(5) The number of the applicant’s current and anticipated employes working in this Commonwealth.
(6) An identification of the applicant’s assets in this Commonwealth.
(7) The principal office in this Commonwealth or of its registered agent.
(8) An applicant’s Department tax identification numbers including Sales Tax license number, employer identification number and corporate box number. If tax numbers have not yet been obtained, an applicant shall provide the filing date of its application for these numbers.
(c) Tax information provided under subsection (b) shall be filed with the Secretary of the Department at the time that application is made with the Commission.
Cross References This section cited in 52 Pa. Code § 54.32 (relating to application process); and 52 Pa. Code § 54.39 (relating to reporting requirements).
§ 54.34. Change in organizational structure or operational status.
(a) The applicant is under a duty to inform the Commission of a material change in the information provided in the application during the pendency of the application, or while the licensee is operating in this Commonwealth.
(b) A material change in the organizational structure or operation that affects an applicant’s or a licensee’s operation in this Commonwealth shall be reported to the Commission within 30 days of the date of the change. Specifically, notification shall be given to the Commission of a change in the following:
(1) The ownership of generation or transmission facilities or other inputs to electric power production.
(2) An affiliation with an EDC, or an entity which owns generation or transmission facilities or other inputs to electric power production.
(3) An affiliation with an entity that has a franchised service area.
(c) Unless directed otherwise by the Commission, the licensee does not need to file an amended application with the Commission.
§ 54.35. Publication of notice of filing.
(a) Notice of filing an application shall be published in newspapers of general circulation covering each county in which the applicant intends to provide service as required by § 5.14(a)(2) (relating to applications requiring notice). Applicants may contact the Commission’s Press Secretary to confirm the identity of the newspapers of general circulation in which notice shall be published.
(b) The notice shall be written in plain language and include the name, address and telephone number of the applicant, a description of the proposed services to be provided and the geographic area to be served. The notice shall include the application docket number and a statement that protests related to the technical or financial fitness of the applicant shall be filed within 15 days of the publication date of the notice with the Commission’s Secretary, Public Utility Commission, P. O. Box 3265, Harrisburg, PA 17105-3265. The notice in an acceptable electronic format shall be submitted to the Commission’s Secretary for posting on the Commission’s Internet web site and, if appropriate, on the Commission’s electronic bulletin board.
Cross References This section cited in 52 Pa. Code § 54.33 (relating to application form); and 52 Pa. Code § 62.104 (relating to application form).
§ 54.36. Protests to applications.
(a) Consistent with § 5.14(b) (relating to applications requiring notice), a 15-day protest period commences on the date notice of the application filing is published in newspapers. An interested party may file a protest to an application in compliance with § 5.52(a) (relating to content of a protest to an application) and shall set out clearly and concisely the facts upon which challenge to the fitness of the applicant is based. An applicant may file an answer to the protest within 10 days of when the protest is filed. Protests which do not fully comply with § 5.52(a) will be rejected.
(b) Protests may challenge only the applicant’s financial and technical fitness to provide the service for which a license is requested. Consistent with the requirements of due process, sanctions, such as revocation or suspension of a supplier’s license or the imposition of a fine, may be imposed on parties who intentionally misuse the protest process by repeated filing of competitive protests.
(c) A protest to the applicant’s technical or financial fitness to provide service will be assigned to Commission staff for review. Staff will determine if the protest fully complies with § 5.52(a) and sets out clearly and concisely the facts upon which the challenge to the fitness of the applicant is based. Staff will determine if the protest is sufficiently documented. If a protest is not sufficiently documented, Commission staff will prepare a recommendation for Commission consideration dismissing the protest and granting the application. If a protest is sufficiently documented, the application will be transferred to the Office of Administrative Law Judge for hearings or mediation as deemed appropriate.
§ 54.37. Approval.
(a) A license will be issued, authorizing the whole or any part of service requested, if the Commission finds that:
(1) The applicant is fit, willing and able to properly perform the service proposed in conformance with applicable provisions of the code and the lawful Commission orders and regulations, specifically including Chapter 56 (relating to Standards and Billing Practices for Residential Utility Service).
(2) The proposed service is consistent with the public interest and the policy declared in Chapter 28 of the code (relating to the Electricity Generation Customer Choice and Competition Act. See section 2809(b) of the code (relating to requirements for electric generation suppliers).
(b) Completed applications, with all supporting documentation, including any documentation or clarifying information requested by Commission staff, if unprotested, will be processed within 45 days after acceptance by the Commission. If the application is not processed within the time period, the application will be deemed approved. The review period may be extended for a reasonable period of time by Secretarial Letter.
§ 54.38. Regulatory assessments.
(a) A licensee shall be required to pay assessments to be used to defray regulatory costs. See section 510 of the code (relating to assessment for regulatory expenses upon public utilities). Assessments will be based upon the administrative costs incurred by the Commission related to generation suppliers. These costs include:
(1) Maintaining records related to licensees and administering other provisions of the code related to maintenance of adequate reserve margins.
(2) Compliance with Chapter 56 (relating to standards and billing practices for residential utility service).
(3) Fulfilling consumer information and education obligations.
(b) Yearly assessments shall be paid by the licensee within 30 days of receipt of notice of the amount lawfully charged against it as a condition of maintaining a license to supply electricity or electric generation. See section 510(c) of the code.
Notes of Decisions Conflict with Statute
To the extent that the provisions of § 54.38 can be construed as contrary to the statute under which it was promulgated, then the regulation is invalid so far as it prohibits the grouping of electric generation supplier companies for purposes of assessment. PPL Energyplus, LLC v. Commonwealth, 800 A.2d 360 (Pa. Cmwlth. 2002).
§ 54.39. Reporting requirements.
(a) A licensee shall report its level of gross receipts to the Commission on a quarterly basis. Gross receipt information shall be filed with the Commission within the 30 days following the end of the first full quarter, and of each subsequent quarter that the license is in effect.
(b) A licensee shall file an annual report on or before April 30 of each year, for the previous calendar year. The annual report shall contain the following information (See section 2810(c)(6) of the code (relating to revenue-neutral reconciliation):
(1) Updates to the tax information requested in the application in § 54.33(b) (relating to application form).
(2) The total amount of gross receipts from the sales of electricity for the preceding calendar year.
(3) The total amount of electricity sold, stated in kilowatt hours, during the preceding calendar year.
(4) The percentage of total electricity supplied by each energy source, including a detailed breakdown of renewable resources as defined in section 2803 of the code (relating to definitions).
(c) A licensee shall be required to meet periodic reporting requirements as may be issued by the Commission to fulfill the Commission’s duty under Chapter 28 of the code (relating to Electricity Generation Customer Choice and Competition Act) pertaining to reliability and to inform the Governor and Legislature of the progress of the transition to a fully competitive electric market.
(d) The information requested in this section will be made available for public review upon request to the Commission subject to any rulings on confidentiality made by the Commission.
§ 54.40. Bonds or other security.
(a) A license will not be issued or remain in force until the licensee furnishes a bond or other security approved by the Commission. See section 2809(c) of the code (relating to requirements for electric generation suppliers).
(b) The purpose of the security requirement is to ensure the licensee’s financial responsibility, the payment of gross receipts tax as required by section 2810 of the code (relating to revenue-neutral reconciliation), and the supply of electricity at retail in accordance with contracts, agreements or arrangement. See section 2809(c) of the code.
(c) The initial security level required from each applicant is $250,000. Modifications of this amount commensurate with the nature and scope of business anticipated to be conducted in this Commonwealth may be granted where substantial evidence is submitted in support of the modification. A request for modification of this initial security level may be made in conjunction with the filing of the application. The license will be issued contingent on the submission of proof that the applicant has obtained a bond, or other approved security in the amount directed by the Commission.
(d) After the first year that the license is in effect, the security level for each licensee will be reviewed annually and modified primarily based on the licensee’s reported annual gross receipts information. The security level will be 10% of the licensee’s reported gross receipts. See section 2809 (c)(1)(i) of the code. Maintenance of a license will be contingent on the licensee providing proof to the Commission that a bond or other approved security in the amount directed by the Commission has been obtained. A licensee may seek approval from the Commission of an alternative level of bonding commensurate with the nature and scope of its operations.
(e) Payments pursuant to the security may result from the licensee’s failure to pay the full amount of Gross Receipt Taxes, or failure to supply electricity or other services in accordance with contracts, agreements or arrangements.
(f) The bond or security shall include the following:
(1) The Pennsylvania Public Utility Commission, Commonwealth as the sole beneficiary.
(2) The purpose of the bond as follows:
This bond (or other security) is written in accordance with Section 2809(c)(1)(i) of the Public Utility Code, 66 Pa.C.S. § 2809(c)(1)(i), to assure compliance with applicable provisions of the Public Utility Code, 66 Pa.C.S. § § 101, et seq., and the rules and regulation of the Pennsylvania Public Utility Commission by the Principle as a licensed electric generation supplier; to ensure the payment of Gross Receipts Tax as required by Section 2810 of the Public Utility Code, 66 Pa.C.S. § 2810; and to ensure the supply of electricity at retail in accordance with contracts, agreements or arrangements.
(3) A listing of the prioritization of claims for payment under the security from highest priority to lowest priority as follows:
(i) The Commonwealth.
(ii) EDCs for the reimbursement of Gross Receipts Tax.
(c) Private individuals.
(4) A statement that the security shall be interpreted under law of the Commonwealth, or in the alternative, no choice of law is specified.
(g) The applicant may request the use of a security other than a bond. See section 2809 (c)(1)(i) of the code. The application shall include specific information about the licensee’s need to use a security other than a bond; and shall provide the name, business address, the nature of the business of the entity issuing the security, and if available, the financial rating of the entity. The applicant shall demonstrate that the financial protection afforded by the security is equivalent to that of a bond.
(h) Licensee liability for unreasonable service, or for violations of the code and Commission orders and regulations is not limited by these security requirements.
§ 54.41. Transfer or abandonment of license.
(a) A license may not be transferred without prior Commission approval. See section 2809(d) of the code (relating to requirements for electric generation suppliers). Approval for transfer shall be obtained by petition to the Commission. The granting of such a petition does not eliminate the need for the transferee to complete and file with the Commission an application that demonstrates the transferee’s financial and technical fitness to render service under the transferred license.
(b) A licensee may not abandon service without providing 90 days prior written notice to the Commission, the licensee’s customers, the affected distribution utilities and default service providers prior to the abandonment of service. The licensee shall provide individual notice to its customers with each billing, in each of the three billing cycles preceding the effective date of the abandonment.
Source The provisions of this § 54.41 amended September 14, 2007, effective September 15, 2007, 37 Pa.B. 4996. Immediately preceding text appears at serial page (247140).
Cross References This section cited in 52 Pa. Code § 54.123 (relating to transfer of customers to default service).
§ 54.42. License suspension; license revocation.
(a) A licensee shall comply with the applicable requirements of the code and Commission regulations and orders. Consistent with due process, a license may be suspended or revoked, and fines may be imposed against the licensee for:
(1) The failure to pay the yearly assessment.
(2) The failure to furnish and maintain a bond or other security approved by the Commission in the amount directed by the Commission.
(3) The nonpayment of taxes under Article II of the Tax Reform Code of 1971 (72 P. S. § § 7201—7281.2) and Article XI of the Tax Reform Code of 1971 (72 P. S. § § 8101—8104) and any taxes imposed by Chapter 28 of the code (relating to Electricity Generation Customer Choice and Competition Act). See sections 2806(g)(3) and 2809(c)(1) of the code (relating to implementation, pilot program and performance based rates; and requirements for electric generation suppliers).
(4) The failure to waive confidentiality with respect to tax information in the possession of the Department. See section 2810(c)(6)(iv) of the code (relating to revenue-neutral reconciliation).
(5) The failure to provide the address of its principal office in this Commonwealth or of its registered agent.
(6) The failure to follow the principles in § 54.43 (relating to standards of conduct and disclosure for licensees).
(7) A violation of applicable provisions of the code, this title and lawful Commission orders. See section 2809(b) of the code.
(8) A violation of Pennsylvania consumer protection law.
(9) The transfer of a customer without the customer’s consent. See section 2807(d)(1) of the code (relating to duties of electric distribution companies).
Cross References This section cited in 52 Pa. Code § 54.123 (relating to transfer of customers to default service).
§ 54.43. Standards of conduct and disclosure for licensees.
To protect consumers of this Commonwealth, licensees shall adhere to the following principles in the provision of electric generation service:
(1) A licensee shall provide accurate information about their electric generation services using plain language and common terms in communications with consumers. When new terms are used, the terms shall be defined again using plain language. Information shall be provided in a format that enables customers to compare the various electric generation services offered and the prices charged for each type of service.
(b) A licensee shall respond to reasonable consumer requests for information regarding energy sources by percentage, and plant emissions of its electric generation supply.
(c) A licensee shall provide notification of change in conditions of service, intent to cease operation as an electric generation supplier, explanation of denial of service, proper handling of deposits and proper handling of complaints in accordance with this title.
(d) A licensee shall maintain the confidentiality of a consumer’s personal information including the name, address and telephone number, and historic payment information, and provide the right of access by the consumer to his own load and billing information.
(e) A licensee may not discriminate in the provision of electricity as to availability and terms of service based on race, color, religion, national origin, sex, marital status, age, receipt of public assistance income, and exercise of rights under Subchapter IV of the Consumer Credit Protection Act (15 U.S.C.A. § § 1691—1691f), relating to Equal Credit Opportunity. See 12 CFR 202-1—202.14 (relating to equal credit opportunity Regulation B).
(f) A licensee is responsible for any fraudulent deceptive or other unlawful marketing or billing acts performed by the licensee, its employes, agents or representatives. Licensee shall inform consumers of state consumer protection laws that govern the cancellation or rescission of electric generation supply contracts. See section 7 of the Unfair Trade Practices and Consumer Protection Law (73 P. S. § 201-7).
(g) A licensee shall comply with relevant Commission regulations, orders and directives that may be adopted.
Cross References This section cited in 52 Pa. Code § 54.42 (relating to license suspension; license revocation); 52 Pa. Code § 111.3 (relating to supplier liability for its agent); 52 Pa. Code § 111.5 (relating to agent training); and 52 Pa. Code § 111.12 (relating to consumer protection).
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