451 Advanced notice of final rulemaking; licensing requirements for natural gas suppliers regulations
Title 52—PUBLIC UTILITIES PENNSYLVANIA PUBLIC UTILITY COMMISSION [ 52 PA. CODE CH. 62 ] [ L-2011-2266832 ] Advanced Notice of Final Rulemaking; Licensing Requirements for Natural Gas Suppliers Regulations [43 Pa.B. 1413]
[Saturday, March 16, 2013]Public Meeting held
February 28, 2013Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Wayne E. Gardner; James H. Cawley; Pamela A. Witmer
Licensing Requirements for Natural Gas Suppliers Regulations at 52 Pa. Code § 62.101—§ 62.102; L-2011-2266832 Advanced Notice of Final Rulemaking By the Commission:
By Order entered January 13, 2012, the Pennsylvania Public Commission (Commission) initiated a rulemaking to review the scope of our natural gas supplier (NGS or supplier) licensing regulations at 52 Pa. Code § 62.101 (relating to definitions) and § 62.102 (relating to scope of licensure). Specifically this review was to address whether or not to maintain the exemptions from the licensing requirement for marketing services consultants and nontraditional marketers. Comments were filed by various interested parties. The Commission has reviewed those comments and issues this Advanced Notice of Final Rulemaking.
Background
On June 22, 1999, Governor Thomas J. Ridge signed into law the Natural Gas Choice and Competition Act, effective July 1, 1999, 66 Pa.C.S. §§ 2201—2212 (Act). Pursuant to the Act, beginning on November 1, 1999, retail customers have had the ability to choose an NGS to provide them with natural gas supply services.1
Section 2208(a) of the Act requires that no entity can engage in the business of a NGS unless it holds a license issued by the Commission. 66 Pa.C.S. § 2208(a). The term NGS is defined, in part, as:
An entity other than a natural gas distribution company, but including natural gas distribution company marketing affiliates, which provides natural gas supply services to retail gas customers utilizing the jurisdictional facilities of a natural gas distribution company.
66 Pa.C.S. § 2202.
Further, the term ''natural gas supply services'' is defined, in part, as ''the sale or arrangement of the sale of natural gas to retail gas customers,'' 66 Pa.C.S. § 2202.
On June 24, 1999, following the passage of the Act, the Commission issued a Tentative Order establishing a draft licensing application for the interim licensing of NGSs. On July 15, 1999, the Commission issued a Final Order at Docket No. M-00991248F0002 that adopted the interim licensing procedures and license application for NGSs. The Final Order required all suppliers of retail natural gas supply services to obtain a NGS license, other than natural gas local distribution companies providing service within their certificated service territories and municipal utilities providing service within their corporate or municipal limits.
Subsequently, in 2000, the Commission adopted a Proposed Rulemaking Order that revised its interim licensing procedures and promulgated proposed regulations governing the licensing requirements for NGSs. See 52 Pa. Code §§ 62.101—114. See Licensing Requirement for Natural Gas Suppliers, Proposed Rulemaking Order, Docket No. L-00000150, 30 Pa.B. 3073 (June 17, 2000). The Commission stated that its initial interpretation of the Act had been that every entity that engages in an activity listed as that undertaken by a natural gas supplier must be licensed. However, the Commission's proposed rulemaking acknowledged that some activities may be undertaken by entities that will not have any direct physical or financial responsibility for the procurement of the customer's natural gas. Accordingly, in the proposed regulations the Commission decided to exempt from licensing two types of entities that worked as brokers or agents for NGSs and retail customers. The proposed regulation used the terms ''marketing services consultant'' and ''nontraditional marketer'' for these agents and brokers.
In the final NGS licensing regulations, the Commission defined the term ''marketing services consultant'' as follows:
A commercial entity, such as a telemarketing firm or auction-type website, or energy consultant, that under contract to a licensee2
or a retail customer, may act as an agent to market natural gas supply services to retail gas customers for the licensee or may act as an agent to recommend the acceptance of offers to provide service to retail customers. A marketing services consultant:(i) does not collect natural gas supply costs directly from retail customers;
(ii) is not responsible for the scheduling of natural gas supplies;
(iii) is not responsible for the payment of the costs of the natural gas to suppliers, producers, or NGDCs.
52 Pa. Code § 62.101 (footnote added).
Additionally, in the regulations the Commission defined ''nontraditional marketer'' as:
''A community-based organization, civic, fraternal or business association, or common interest group that works with a licensed supplier as an agent to market natural gas supply services to its members or constituents. A nontraditional marketer: (i) conducts its transactions through a licensed NGS; (ii) does not collect revenue directly from retail customers; (iii) does not require its members or constituents to obtain its natural gas service through the nontraditional marketer or a specific licensed NGS; (iv) is not responsible for the scheduling of natural gas supplies; [and] (v) is not responsible for the payment of the costs of the natural gas to its suppliers or producers.''
52 Pa. Code § 62.101.
In Section 62.102 of the regulations, relating to scope of licensure, the Commission created licensing exemptions for marketing services consultants and nontraditional marketers.
(d) A nontraditional marketer is not required to obtain a license. The licensed NGS shall be responsible for violations of 66 Pa.C.S. (relating to the Public Utility Code), and applicable regulations of this title, orders and directives committed by the nontraditional marketer and fraudulent, deceptive or other unlawful marketing or billing acts committed by the nontraditional marketer.
(e) A marketing services consultant is not required to obtain a license. The licensed NGS shall be responsible for violations of 66 Pa.C.S. and applicable regulations of this title, orders and directives committed by the marketing services consultant and fraudulent, deceptive or other unlawful marketing or billing acts committed by the marketing services consultant.
52 Pa. Code § 62.102(d)—(e).
The Commission proposed these two exemptions in its June 2000 Proposed Rulemaking Order. Some commenters supported the exemptions and others, including the Independent Regulatory Review Commission (IRRC), opposed them. In the final rulemaking the Commission determined that marketing services consultants and nontraditional marketers are not engaged in the sale or arranging of natural gas supply services to retail consumers. Thus, they fall outside of the definition of an NGS set forth in Section 2202 of the Act. Furthermore, rather than require these entities to obtain a license themselves, the regulations emphasized that the licensed NGS is responsible for any violations of the statute, regulations or orders or for any fraudulent, deceptive or other unlawful marketing or billing acts committed by the marketing services consultant or nontraditional marketer. See 52 Pa. Code § 62.102 (relating to scope of licensure). See also 52 Pa. Code § 62.110(a)(3) (NGSs must identify nontraditional marketers and marketing services consultants who are currently or will be acting as agents for the licensee in the upcoming year).
The proposed regulations were finalized by the Commission in July 2001 in Licensing Requirements for Natural Gas Suppliers, Final Rulemaking Order, Docket No. L-00000150, 31 Pa.B. 3943 (July 21, 2001).
