Retail Electric Service Suppliers Certification Process. Hisham Choueiki, Ph.D., P.E. Ohio PUC Staff October 20-24, 2014 Tbilisi, Georgia

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1 Retail Electric Service Suppliers Certification Process Hisham Choueiki, Ph.D., P.E. Ohio PUC Staff October 20-24, 2014 Tbilisi, Georgia

2 List of Acronyms Used CRES Certified Retail Electric Service AGG Certification application for a broker or aggregator CRS Certification application for generation providers and power marketers GAG Certification application for a governmental aggregator O.A.C Ohio Administrative Code (PUCO Rules) O.R.C Ohio Revised Code (Statute, Ohio Law) 2

3 Certification Certification is required pursuant to Section of the Ohio Revised Code (O.R.C.) This applies to all retail electric service suppliers (retail aggregator/brokers, generation providers and power marketers) and governmental aggregators They must be certified prior to providing service to retail end use customers. 3

4 Certification Application for certified provider services may be made under Commission rule 4901:1-24 of the Ohio Administrative Code (OAC), and on forms authorized by the Commission. 4

5 Certification Process Applications are one of three types: Retail Supplier, Provider, or Marketer (Type CRS) Assumes the contractual and legal responsibility for the sale and provision of CRES (Certified Retail Electric Service) to a retail electric customer and having title to the electricity at some point during the transaction. Broker/Aggregator (Type AGG) Assumes the contractual and legal responsibility for the sale and/or arrangement for the supply of CRES to a retail customer without taking title to the electricity. 5

6 Certification Process Applications are one of three types: Governmental Aggregator (Type GAG) Allows the legislative authority of communities such as cities, counties, villages, townships, etc. to aggregate their citizens in accordance with Section of the Revised Code for the purpose of purchasing electric generation service on an aggregated basis 6

7 Certification Process Applications and filing instructions are available from our website, for both initial and renewal applications Completed Applications are filed at Docketing Applications are reviewed to assure that the applicant is fit and capable of providing the services it intends to provide and that it meets the requirements in three areas: o Managerial o Technical o Financial 7

8 Certification Process Section Details Managerial Jurisdiction of Operations, Experience, Environmental Disclosure, Disclosure of Liabilities and Investigations Financial Annual Reports, SEC Filings, Financial Statements, Financial Arrangements, Forecasted Financial Statements, Credit Ratings, Credit Report, Bankruptcy Information, Merger Information Technical (Retail Suppliers Only) Operations, Operations Expertise, Key Technical Personal, 8

9 Certification Process Financial Details Financial Requirements of the EDU for CRES Providers As required in the tariff filed by the EDU, the CRES provider must provide financial collateral to the EDU. The collateral may be in the form of a guarantee of payment; an irrevocable Letter of Credit; a Prepayment Account established with the Company; a Surety Bond, including the Company as a beneficiary; or other mutually agreeable security or arrangement. The amount of the security required must be commensurate with the financial risks placed on the EDU by that CRES Provider, including recognition of that CRES Provider s performance. 9

10 Certification Process Financial Details Financial Requirements of the EDU for CRES Providers (cont.) The EDU will make available its credit requirements upon request. A CRES Provider may appeal the EDU s determination of credit requirements to the Commission or seek Staff mediation as to any dispute. Per rule 4901: , if a retail electric generation service provider (CRES) fails to maintain sufficient financial security to protect an electric utility from default by the retail electric generation service provider, the electric utility may apply for relief at the commission. In accordance with rule 4901: of the Administrative Code, the commission, upon its own motion or upon complaint, may suspend, rescind, or conditionally rescind a retail electric generation service provider's certificate for failure to maintain sufficient financial security at any electric utility as required by this rule. 10

11 Certification Application Forms Links CRES Initial Certification Application Form Click this link to see examples of the certification applications forms 11

12 Certification Process Applications are on a 30 day auto approval timeline, and are approved on the 31 st day. If there are any issues that cannot be resolved in the 30 day review timeframe, the application will be suspended to provide time for the issues to either be corrected or the application withdrawn. If suspended, the Commission then has 90 days to approve or deny the application. 12

13 Certification Process Once approved, the applicant is issued a numbered certificate. Certification is effective for two years. If the company intends to continue to do business in Ohio, applicants then need to submit a renewal application 13

14 Certification Process Renewal application must be submitted no sooner than: 60 days prior to expiration for electric service providers And no less than 30 days prior to expiration for both types of certification. 14

15 Example of Electric Marketer Certificate Certificate Number Case Number Applicant Effective Date Expiration Date Link to sample certificate: 15

16 Summary of Certified Electric Suppliers Broker/Aggregator (278) Marketer (94) Governmental Aggregation (272) (Note: As of August 19, 2014) List of Regulated Companies 16

17 Supplier Agreement With The Utility Certified suppliers must also enter into a supplier agreement with the Electric Distribution Utility (EDU) for the arrangement of delivery and billing arrangements. The terms and conditions of the supplier agreement are specified in the tariff that the EDU has filed with the PUCO 17

18 Supplier Agreement With The Utility Example of Supplier Agreement Terms and Conditions from filed AEP Tariff 18