Subchapter D. LICENSING REQUIREMENTS FOR NATURAL GAS SUPPLIERS
Sec.
62.101. Definitions.
62.102. Scope of licensure.
62.103. Application process.
62.104. Application form.
62.105. Change in organizational structure or operational status.
62.106. Open and nondiscriminatory access.
62.107. Publication of notice of filing.
62.108. Protests to applications.
62.109. Approval.
62.110. Reporting requirements.
62.111. Bonds or other security.
62.112. Transfer or abandonment of license.
62.113. License suspension; license revocation.
62.114. Standards of conduct and disclosure for licensees.
The provisions of this Subchapter D issued under the Public Utility Code, 66 Pa.C.S. § § 501, 2203(12) and 2208, unless otherwise noted.
The provisions of this Subchapter D adopted July 20, 2001, effective July 21, 2001, 31 Pa.B. 3943, unless otherwise noted.
The following words and terms, when used in this subchapter, have the following meanings, unless the context clearly indicates otherwise:
(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.
(i) Conducts its transactions through a licensed NGS.
(ii) Does not collect revenues 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.
(v) Is not responsible for the payment of the costs of the natural gas to its suppliers or producers.
(a) An NGS may not engage in marketing, or may not offer to provide, or provide natural gas supply services to retail customers until it is granted a license by the Commission.
(b) An NGDC acting within its certified service territory as a supplier of last resort is not required to obtain a license.
(c) The owners/operators of a building or facility that manage the internal distribution system supplying a building or facility and supply natural gas and other related services to occupants of the building or the facility where the owners/operators, and not the occupants, are the direct purchasers of the natural gas supply services are not required to obtain a license.
(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.
(a) An application for a license shall be made on the form provided by the Commission. A copy of the application can be obtained from the Commission’s Secretary. The application form is also 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 2208(b) of the act (relating to requirements for natural gas suppliers).
(b) An original and eight copies of the completed application and supporting attachments shall be filed. An electronic copy of the application shall also 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).
(c) Subject to subsection (e), copies of the completed applications with supporting documentation shall be served on the following:
(1) The Office of Consumer Advocate.
(2) The Office of Small Business Advocate.
(3) The Office of Attorney General, Bureau of Consumer Protection.
(4) The Department of Revenue.
(5) Each NGDC in whose service territory the applicant intends to provide natural gas supply services.
(d) Incomplete applications and those without supporting attachments, if needed, will be rejected without prejudice. The license application, with supporting attachments, shall be completed in its entirety.
(e) 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. 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.
(1) An applicant must 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 the Commission’s rules and regulations pertaining to confidentiality.
(a) The application form includes information that will be used in the evaluation of the financial fitness and technical fitness to render service. Information includes:
(1) Identification of the geographic area that the applicant proposes to serve.
(2) Identification of the type of service that the applicant proposes to furnish.
(3) Identification of the class of customers to which the applicant proposes to provide these services.
(4) Identification of the applicant’s utility affiliates.
(5) 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 NGS.
(7) Evidence of competency and experience in providing the scope and nature of the applicant’s proposed services. This evidence may include:
(i) Descriptions of the applicant’s prior experience.
(ii) Proposed staffing and employee training commitments.
(iii) Business plans.
(iv) Agreements, arrangements and contracts for natural gas supply procurement, transmission and related services.
(8) Evidence demonstrating the applicant’s ability to comply with applicable Commission requirements concerning customer billing, customer education, billing and terms of service, and customer information. This evidence may include:
(i) Prior regulatory experience of the applicant.
(ii) Prior business experience in energy or other service-oriented industries.
(iii) Staffing and staff training commitments.
(iv) Agreements, arrangements and contracts for customer education and information service.
(v) Customer satisfaction survey results.
(vi) Government agency reports.
(vii) 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) Additional information that shall be submitted in support of the application 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) The trade names or fictitious names used by the applicant.
(3) The type of business association (for example, sole proprietor, partnership or corporation).
(4) The names of the owners, general partners or corporate officers.
(5) The number of the applicant’s current and anticipated employees 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) The applicant’s Department of Revenue tax identification numbers including Sales Tax license number, employer identification number and corporate box number.
(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) Affiliation with an NGDC.
(2) Affiliation with an entity that has a franchised service area.
(3) Affiliation with another NGS.
(4) Affiliation with a licensed electric generation supplier.
(5) Office location.
(6) Chief executive officer or operating partners.
(7) Customer classes served expanded to include residential and small commercial customers.
(c) Unless directed otherwise by the Commission, the licensee does not need to file an amended application with the Commission.
A municipal corporation shall, before it is permitted to provide natural gas supply services as a licensed NGS, demonstrate, and the Commission will determine, that by the date of the issuance of the license, it will provide other NGSs open and nondiscriminatory access to its gas distribution system under standards that are comparable to those found in the act, taking into consideration the particular circumstances of the municipal corporation’s ownership or operation, or both, of its natural gas distribution system. See section 2208(g) of the act (relating to open and nondiscriminatory access).
(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.
(1) 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, Post Office Box 3265, Harrisburg, PA 17105-3265.
(2) The notice in an acceptable electronic format shall be submitted to the Commission’s Secretary for posting on the Commission’s Internet web site. Inquiries concerning the electronic format may be directed to the Commission’s Forms Officer.
(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.
(1) Staff will determine if the protest is sufficiently documented.
(2) If a protest is not sufficiently documented, Commission staff will prepare a recommendation for Commission consideration dismissing the protest and granting the application.
(3) 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.
(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 66 Pa.C.S. (relating to the Public Utility 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 the act (See section 2208(b) of the act (relating to requirements for natural gas 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.
(a) 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:
(1) The total amount of gross receipts from the sales of natural gas supply services for the preceding calendar year.
(2) The total amount of natural gas sold during the preceding calendar year.
(3) The names and addresses of nontraditional marketers and marketing services consultants who are currently or will be acting as agents for the licensee in the upcoming year.
(b) A licensee shall be required to meet periodic reporting requirements issued by the Commission to fulfill the Commission’s duty under the act pertaining to reliability and to inform the Governor and General Assembly of the progress to a fully competitive natural gas market.
Financial Security Determination
PUC has discretion to approve criteria to be used to determine the appropriate financial security based upon financial impact on natural gas distribution company (NGDC) by natural gas supplier default; criteria is for a ‘‘reasonably related’’ financial security requirement, not the worst case scenario as determined by the NGDC, which was contrary to the intentions of the statute to promote competition and choice in the natural gas industry. UGI Utilities v. Pennsylvania Public Utility Commission, 878 A.2d 186, 192 (Pa. Cmwlth. 2005).
Penalties
Natural gas distribution company did not present any evidence supporting its proposition that penalties were in any way related to the financial exposure that it would have in the event of natural gas supplier’s default or bankruptcy, which is a necessary requirement for including penalty as an element of financial security; additionally, there is no language in the Commission’s regulations regarding the inclusion of penalties in a calculation of security. UGI Utilities v. Pennsylvania Public Utility Commission, 878 A.2d 186, 193 (Pa. Cmwlth. 2005).
Public Utility Commission
The Pennsylvania Public Utility Commission is the administrative agency charged with regulating utilities under the Pennsylvania Code, and its expert interpretation of those issues is entitled to great deference unless clearly erroneous; when there is substantial evidence to support the PUC’s decision, the court will not substitute its discretion for the discretion of the PUC. UGI Utilities v. Pennsylvania Public Utility Commission, 878 A.2d 186, 192 (Pa. Cmwlth. 2005).
(a) A license may not be transferred without prior Commission approval. See section 2208(d) of the act (relating to requirements for natural gas suppliers). Approval for transfer shall be obtained by petition to the Commission. A license application shall be filed by the transferee at the same time that the petition for transfer is filed and demonstrate the transferee’s financial and technical fitness to render service under the transferred license.
(b) A licensee may not abandon its license without providing 90 days prior written notice to the Commission, the licensee’s customers, the affected distribution utilities and suppliers of last resort. The licensee shall provide written individual notice to its customers at approximately 90 days and 60 days preceding the effective date of the abandonment.
(a) A licensee shall comply with the applicable requirements of 66 Pa.C.S. (relating to the Public Utility 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) Failure to furnish and maintain a bond or other security.
(2) Failure to comply with the rules, regulations, orders or directives of the Department of Revenue.
(3) Failure to provide the address of its current principal office in this Commonwealth or of its registered agent.
(4) Failure to follow the principles in § 62.114 (relating to standards of conduct and disclosure for licensees).
(5) Violation of applicable provisions of 66 Pa.C.S., Commission regulations and lawful Commission orders. See section 2208(c)(2) of the act (relating to requirements for natural gas suppliers).
(6) Violation of Pennsylvania consumer protection law.
(b) The unauthorized transfer by an NGDC, or its affiliate, of a customer’s NGS without the customer’s express consent will result in a fine, or the suspension, or the revocation of the license of that NGDC’s affiliated NGS. See section 2206(b) of the act (relating to consumer protection and customer service).
This section cited in 52 Pa. Code § 62.113 (relating to license suspension; license revocation).
§ 62.101. Definitions.
Act—The Natural Gas Choice and Competition Act (66 Pa.C.S. § § 2201—2212).
Applicant—A person or entity seeking to obtain a license to supply retail natural gas supply services to retail customers.
City natural gas distribution operation—A collection of real and personal assets used for distributing natural gas to retail gas customers owned by a city or a municipal authority, nonprofit corporation or public corporation formed under section 2212(m) of the act (relating to city natural gas distribution operations).
License—A license granted to an NGS under this subchapter.
Licensee—A person or entity that has obtained a license to provide natural gas supply services to retail customers.
Marketing—The publication, dissemination or distribution of informational and advertising materials regarding the NGS’s services and products to the public by personal contact, print, broadcast, electronic media, direct mail or by telecommunication.
Marketing services consultant—A commercial entity, such as a telemarketing firm or auction-type website, or energy consultant, that under contract to a licensee 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:
NGDC—Natural gas distribution company—As defined in section 2202 of the act (relating to definitions).
NGS—Natural gas supplier—As defined in section 2202 of the act.
Natural gas supply services—As defined in section 2202 of the act.
Nontraditional marketer—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:
Offer to provide service—The extension of an offer to provide services or products communicated orally or in writing to a customer.
Retail gas customer—As defined in section 2202 of the act.
Supplier of last resort—A supplier approved by the Commission under section 2207(a) of the act (relating to obligation to serve) to provide natural gas supply services to customers who contracted for natural gas that was not delivered, or who did not select an alternative NGS, or who are not eligible to obtain competitive natural gas supply, or who return to the supplier of last resort after having obtained competitive natural gas supply.
§ 62.102. Scope of licensure.
§ 62.103. Application process.
§ 62.104. Application form.
§ 62.105. Change in organizational structure or operational status.
§ 62.106. Open and nondiscriminatory access.
§ 62.107. Publication of notice of filing.
§ 62.108. Protests to applications.
§ 62.109. Approval.
§ 62.110. Reporting requirements.
§ 62.112. Transfer or abandonment of license.
§ 62.113. License suspension; license revocation.
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