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As previously reported, parties including RESA, NRG and CleanChoice filed comments in response to Staff’s proposal regarding Green Product Offerings.

In comments filed by the office of People’s Counsel (OPC) among other things argues that utilities are prohibited from offering green product offerings per current statutory and regulatory framework. 

Excerpts from OPC Comments:

{***}”The regulations proposed by the Staff of the Maryland Public Service Commission to address green product offerings by electricity suppliers in response to the Commission’s September 10, 2024 notice1 should incorporate the modifications the Office of People’s Counsel recommends in these comments and the attached markup of the regulations. First, the regulations should delineate the application requirements for an electricity supplier seeking Commission approval to market green power; as proposed, they address only the requirements for an application to set the price for green power at a retail-supplier requested proceeding. Second, the proposed regulations regarding a supplier’s application to request a higher price than the Commission-set baseline price for green power should be altered to include information the Commission is required to consider under Public Utilities Article (“PUA”) §7–707(d)(3). 

Third, the “Scope of Applicability” section of the proposed regulations should be removed, as it implies should be modified for clarity and to ensure that required disclosures are conspicuous and readable for customers. that regulated utilities can offer green power, which is impermissible under the current statutory and regulatory framework. Finally, the proposed COMAR 20.53.07.07B(4)” [Emphasis added]

{***}1. The proposed regulations should be modified to cover the initial supplier application for approval to sell green power. As drafted, the proposed regulations do not address the process by which the electricity supplier must apply to the Commission for approval to market its product as green power under PUA §7-707(c)(3). Proposed COMAR 20.53.07.15.B addresses the application requirements for an electricity supplier requesting Commission approval of a higher price than the baseline green power price, but the initial application to be a green power supplier would be outside of that application process. The proposed regulations should directly address the minimum contents of the PUA §7-707(c)(3) application to market electricity as green power, as the law largely leaves the contents of the application up to the Commission’s discretion. The Commission should consider information that will further substantiate the electricity supplier’s green power claims. In particular, the application should include information about the marketing methods the supplier plans to use and example marketing materials, so that the Commission can evaluate the green power claims the supplier is making. {***}

{***}2. The application to exceed the baseline price for green power should be modified to match the statutory requirements of §7-707(d)(3). 

The proposed COMAR 20.53.07.15B—which addresses the application suppliers must make to the Commission to exceed the standard baseline green power price—should be modified to provide the Commission with all of the information it must consider under PUA §7-707(d)(3). First, PUA §7-707(d)(3)(ii)1. requires suppliers to demonstrate that the electricity supply’s actual cost to the supplier exceeds the baseline green power price via an independent third-party audit. In the interest of efficiency, the regulations should require suppliers to provide that third-party audit as part of the application upfront. Second, PUA §7-707(d)(3)(ii)3 requires suppliers to demonstrate “a significant long-term investment in renewable energy that meets the renewable energy portfolio standard under §7-703.”11 OPC has suggested changes to the regulations to reflect this requirement. {***}

{***} 3. The proposed COMAR 20.61.01.07 should be removed, as it appears to contemplate regulated utilities offering “green power” as a separate product. In COMAR 20.61.01.07, the proposed regulations exempt the regulated utilities from the requirements for “Green Power Offerings” and the reporting requirements of COMAR 20.61.04.01. This appears to envision a scenario in which a regulated electric utility that provides standard offer service could also offer a green power product to its customers. The relevant statutes and corresponding regulations, however, when read together as a whole, indicate that regulated utilities are not permitted to offer customers electricity supply other than standard offer service. 12 

Specifically, PUA §7-510(c)(2)(i) provides that “[e]electricity supply purchased from a customer’s electric company is known as standard offer service.” Standard offer service is defined in PUA §7-501(n) to mean “electric service that an electric company must offer to its customers under §7-510(c) of this subtitle.” A utility is prohibited from marketing or promoting its standard offer service under COMAR 20.40.02.01.B.7, except as provided in COMAR 20.40.02.02, which allows a utility to authorize its affiliate to use advertising that includes the utility’s name, trademark, or logo, as long as the affiliate includes a disclaimer in its advertisement that specifies that the affiliate is not the same company as the regulated utility. As green power is defined in PUA §7-707(a) as “energy sources or renewable energy credits that are marketed…”, this indicates that utilities cannot offer green power as they cannot market standard offer service. Moreover, the broader statutory scheme of deregulated energy supply requires that the regulated utilities not be in direct competition with retail suppliers, as the utilities’ entrenched market power stemming from the utility franchise would result in unfair competition. Therefore, the proposed COMAR 20.61.01.07 should be removed, as it contemplates a scenario which cannot exist under the current statutory and regulatory framework and is therefore unnecessary and in apparent conflict with existing law.

To the extent that the Commission disagrees and believes that utilities should nonetheless be allowed to offer green power, the utilities should not be exempted from the green power regulations proposed in this rulemaking. PUA §7-707 uses the term “electricity supplier” throughout in applying the green power provisions. “Electricity supplier” is only defined in PUA §1-101(l), and §1-101(l)(2) specifically includes an “electric company” in the definition of an electricity supplier. 13 As electric company refers to the regulated electric utilities,14 the utilities are included in the definition of electricity supplier and are thus subject to the provisions of PUA §7-707. PUA §7-707(b) makes several exemptions from the green power provisions, but those exemptions do not include the utilities.15 Thus, the proposed COMAR 20.61.01.07 exemption should also be removed because the provisions of PUA §7-707 would apply to the regulated utilities offering a green power product.

OPC Comments  (10/15/2024)

View all comments here. 

RM84 (07/11/2024)
(Green Product Offerings – Revisions to COMAR 20.53 and 20.61.04.01)