News Stories
Sponsored by Earth Etch. Regulatory insight and compliance solutions for today’s energy markets.
HB 1578 Passes Requiring $1 Million In Security For Retail Electric/Gas Entities & Imposes New Sales Channel Requirements Including Training
The Pennsylvania House of Representatives has passed HB 1578 that if signed into law would require retail energy suppliers and brokers marketing to residential customers, under a broad variety of sales channels (to among other things) maintain additional security in the amount of $1 million, while also requiring suppliers/brokers/marketers/aggregator engaged in residential marketing to undergo and pass training conducted by the Pennsylvania Public Utility Commission (PUC).
HB 1578 still requires passage by the state’s Senate and signed by the Governor prior to becoming law.
An Act amending Title 66 (Public Utilities) of the Pennsylvania Consolidated Statutes, in natural gas competition, further providing for requirements for natural gas suppliers; and, in restructuring of electric utility industry, further providing for requirements for electric generation suppliers.
See HB 1578 bill text here.
Memo – Protecting Consumers: Training and Bonding for Retail Energy Suppliers
Among other things the legislation requires all retail electric and natural gas suppliers and their representatives marketing their products in Pennsylvania to pass a required online training and education exam and be certified by the Public Utility Commission. The costs for implementation and administration of this enhancement would be borne by the suppliers through fees assessed by the PUC with enactment of this legislation. Pennsylvania would join Maryland and the District of Columbia in enacting this measure to provide enhanced accountability to retail energy markets.
Additionally, this legislation includes a requirement for increased bonding or financial guarantee to help ensure that the actions of a few suppliers don’t sabotage the good intentions of all stakeholders that have endorsed a customer’s right to shop for their energy supplier over the past two decades. This is an attempt to further exclude those “fly-by-night” companies from doing business in the Commonwealth.
Unless otherwise specifically noted below, the provisions of HB 1578 are applicable to electricity and natural gas suppliers/brokers/marketers.
Additional security requirement:
HB 1578 sets by statute specific bonding level for residential marketing by all EGSs and NGSs.
Note that under statute “electric generation supplier” includes an entity that, “brokers, arranges or markets electricity or related services…”, and the PUC recognizes this broad definition in licensing brokers/marketers and aggregators as “electric generation suppliers”.
HB 1578 requires that electric generation suppliers/brokers/marketers/aggregators and natural gas suppliers/brokers/marketers/aggregators must post an additional $1 million in security if they market to residential customers on a person-to-person basis, with person-to-person defined as including via phone and via certain digital channels.
The required $1 million, in the form of a “bond or security”, for the defined person-to-person residential marketing, would be in addition to any other security currently required by law or regulation.
The term person-to-person is defined as, “an interaction when a person, including an employee, representative or contractor of an electric generation supplier, directly engages with residential customers in person, by telephone or through a digital platform to market, sell or promote the electric generation supplier.”
Training Requirements:
HB 1578 requires that, for a supplier engaged in “person-to-person” residential marketing an employee, representative, or contractor of such supplier must complete online training concerning Pennsylvania’s retail market consumer protections and other rules. Such training is to be conducted by the PUC, and the employee/representative/contractor must pass an online exam administered by the PUC.
“A natural gas supplier engaging in person-to-person sales of natural gas to residential customers that holds a natural gas supplier license before or on the effective date of this paragraph shall ensure that an employee, representative or contractor of the natural gas supplier successfully completes the program no later than 180 days after the commission develops the program.” [identical language used for electric generation suppliers]
House Bill 1578 authorizes the PUC to establish the frequency of the required training and testing. Under this bill the PUC is allowed to fund the training program via assessments on retail suppliers.
Stay Tuned!
