Chapter 02. Administrative Provisions
Regulation .01 Electricity Supplier License Required.LinkCopy Citation
A.
A person may not engage in the business of an electricity supplier in the State without obtaining a license from the Commission.
B.
A person is limited by the terms of the license issued by the Commission.
C.
A license is valid unless suspended or revoked by the Commission.
D.
A license issued under this chapter may not be transferred without prior approval of the Commission.
Regulation .02 Application Requirements.LinkCopy Citation
A.
A person applying for an electricity supplier license or to transfer an existing license shall file an application on the form provided by the Commission.
B.
The application shall contain at least the following information:
(1)
The technical and managerial competency of the applicant;
(2)
A statement indicating compliance with all applicable requirements of the:
(a)
Federal Energy Regulatory Commission; and
(b)
Any independent system operator, regional transmission operator, or system transmission operator to be used by the applicant;
(3)
A statement of compliance with:
(a)
Applicable federal and State consumer protection laws; and
(b)
Environmental laws and regulations relating to the generation of electricity;
(4)
Financial documents as follows:
(a)
One of the following:
(i)
Balance sheets and income statements for the two most recent 12-month periods for which information is available;
(ii)
If the applicant has not been in existence for at least two-12 month periods, balance sheets and income statements for the life of the business; or
(iii)
If a parent corporation or other person undertakes to ensure the financial integrity of the applicant, the parent corporation's or other person's balance sheets and income statements, for at least the two most recent 12 month periods, together with documentation of the undertaking;
(b)
Credit reports or ratings prepared by a nationally recognized statistical rating organization regarding the applicant's payment and credit history, to the extent available or allowed;
(c)
A current long-term bond rating, or other senior debt rating, if available;
(d)
Proof that the applicant has met the credit requirements of PJM Interconnection, LLC, if the applicant has done so, and a detailed description of any credit security requirements PJM Interconnection, LLC has imposed upon the applicant; or
(e)
Other evidence of financial integrity the applicant wishes to provide for the Commission's consideration;
(5)
A certificate from:
(a)
The state under which the applicant's business is formed, indicating that the applicant is in good standing and qualified to do business in the state of formation; and
(b)
The Maryland Department of Assessments and Taxation indicating that the applicant is qualified to do business in the State, if the business of the applicant is formed under the laws of a state other than Maryland;
(6)
An affidavit of tax compliance, including local taxes and surcharges;
(7)
If the applicant provides competitive billing services:
(a)
A statement of compliance with any local licensing and bonding requirement; and
(b)
A copy of the agreement between the electric company and the applicant that:
(i)
Details the reciprocal responsibilities for collection and ownership of accounts receivable; and
(ii)
Prohibits the electric company from commencing collection or service termination action of any kind against a retail customer for nonpayment of utility charges billed by the electricity supplier unless the retail customer fails upon request to provide evidence of payment to the electricity supplier of the utility charges;
(8)
If the applicant intends to collect a deposit or prepayment from a retail customer, a bond as required under COMAR 20.51.03.03 or similar instrument approved by the Commission;
(9)
If applicable, a certificate of compliance with the provisions of the Labor and Employment Article, Title 9, Annotated Code of Maryland, relating to Maryland Workers' Compensation;
(10)
A statement confirming that upon the Commission granting a license to the electricity supplier under Regulation .09 of this chapter, the electricity supplier will notify each of the administrators appointed under COMAR 20.61.06.09 of its name, contact details and any other relevant administrative details that an administrator may require in order to efficiently invoice such electricity supplier as required by COMAR 20.61.06.11; and
(11)
A statement confirming that the applicant will not offer or provide supplier-consolidated billing without Commission licensing that authorizes the provision of supplier-consolidated billing.
C.
An applicant seeking to act solely as a broker or aggregator of electricity supply and electricity supply services shall submit a $10,000 bond in the form described in Regulation .08G of this chapter.
D.
An applicant who provides financial documents under §B(4)(a) of this regulation shall provide audited balance statements, if available.
E.
In addition to the requirements of §§A—D of this regulation, an applicant seeking to provide supplier-consolidated billing shall, at a minimum, provide the following:
(1)
Certification that the applicant will comply with all laws and regulatory requirements for Maryland bills that contain regulated utility charges and retail energy charges;
(2)
Certification that the applicant will comply with all applicable statutes and regulatory requirements and maintain the following functions:
(a)
Call center operations;
(b)
Complaint resolution procedures; and
(c)
Billing, credit, and collection procedures;
(3)
Certification that the applicant will coordinate with the electric company to exchange information and data using Statewide uniform formats and standards approved by the Commission when engaging in supplier-consolidated billing in the electric company's service territory;
(4)
Proof of an ongoing quality assurance process that documents the accuracy of customer bills; and
(5)
Such additional information as the Commission may require.
F.
A licensed electricity supplier that seeks to perform supplier-consolidated billing shall apply to amend its authority under the terms of this subtitle.
Regulation .03 Number of Copies; Service.LinkCopy Citation
A.
An applicant shall file an application with the Commission.
B.
In addition to filing the application with the Commission, the applicant shall simultaneously provide a copy of the completed application to the Maryland Office of People's Counsel, along with the supporting documentation and any supplemental or updated information.
Regulation .04 Material Change in Application Information.LinkCopy Citation
An applicant shall immediately inform the Commission of any material change in the information provided in the application during the application review process.
Regulation .05 Fees.LinkCopy Citation
When the initial application is filed, the applicant shall pay a nonrefundable filing fee, as specified by the Commission in the application form.
Regulation .06 Accuracy of Information.LinkCopy Citation
A.
An applicant who submits misleading, incomplete, inaccurate information or fails to provide the updated information required under COMAR 20.51.03.01 may be penalized under the Public Utilities Article, Annotated Code of Maryland.
B.
A penalty under §A of this regulation may include the:
(1)
Denial of an electricity supplier license;
(2)
Revocation or suspension of a license issued under Regulation .09 of this chapter;
(3)
Imposition of a civil penalty of up to $10,000 per violation;
(4)
Imposition of a moratorium on adding or soliciting additional customers; or
(5)
Any other action the Commission considers appropriate.
C.
The Commission shall consider, in determining the amount of the civil penalty imposed under §B(3) of this regulation, the:
(1)
Number of previous violations of any provision of Commission law or regulations;
(2)
Gravity of the current violation; and
(3)
Good faith of the electricity supplier or person charged in attempting to achieve compliance after the Commission provides notice of the violation.
Regulation .07 Classification of Information.LinkCopy Citation
A.
An applicant may designate answers or documents proprietary or confidential only if there is a valid legal or factual basis supporting the designation.
B.
Applicant answers or documents designated as proprietary or confidential shall be reviewed by the Commission.
C.
Following review, the Commission shall classify answers or documents identified as proprietary or confidential by the applicant as either public, proprietary, or confidential.
D.
Only answers identified as public may be inspected by the general public.
Regulation .08 Financial Integrity.LinkCopy Citation
A.
Each applicant for a license shall file audited financial documents as listed in Regulation .02B(4) of this chapter.
B.
The Commission shall consider an applicant to have acceptable financial integrity if it:
(1)
Receives an unsecured credit allowance greater than $2,000,000 from PJM Interconnection, LLC, and provides documentation of the credit allowance; or
(2)
Demonstrates financial integrity under §D of this regulation.
C.
Any demonstration of financial integrity under §D of this regulation shall be based on the most recent fiscal year-end and, if available, quarterly audited, financial statements of the applicant, from the parent corporation or other person that has undertaken to guarantee the applicant's financial integrity.
D.
If the applicant has less than 12 months of financial history, review of financial integrity shall be based on an evaluation of indicators including:
(1)
Company growth;
(2)
Customer base;
(3)
History of attracting capital;
(4)
Productivity of assets; and
(5)
Margin of safety for creditors.
E.
An applicant for a license shall demonstrate financial integrity by having:
(1)
One of the following:
(a)
Positive working capital; or
(b)
Debt service coverage equal to or greater than two times the annual interest costs;
(2)
One of the following:
(a)
Positive stockholder equity; or
(b)
Positive working capital and a dedicated source of additional financing including a line of credit, a pending stock issuance or debt issuance, or other committed source of financing; and
(3)
One of the following:
(a)
Positive net income; or
(b)
Stockholder equity equal to or greater than two times the amount of net loss.
F.
If an applicant, a parent corporation, or other person who has undertaken to guarantee the applicant's financial integrity, cannot satisfy the financial integrity tests specified in §E of this regulation, or has not received an unsecured credit allowance greater than $2,000,000 from PJM Interconnection, LLC, the applicant, parent corporation, or other person who has undertaken to guarantee the applicant's financial integrity shall provide the Commission with security in the form of the bond described in §H of this regulation, or other security as required under §I of this regulation.
G.
Bonding; Financial Guarantees.
(1)
A supplier seeking to be licensed to provide supplier-consolidated billing shall provide and maintain bonding or financial guarantees with the Commission in the amount of $500,000.
(2)
The total financial guarantee required under this regulation may include the bond or other form of financial guarantee submitted as proof of financial integrity under §I of this regulation.
(3)
A supplier seeking to be licensed to provide supplier-consolidated billing services or providing supplier-consolidated billing services may petition the Commission to lower the total bonding or financial guarantee requirement of $500,000.
H.
A bond required under §F or G of this regulation shall:
(1)
Identify the Maryland Public Service Commission as the sole beneficiary;
(2)
Be continuous and subject to cancellation on 60 days notice to the Commission unless, for good cause shown, the Commission orders that the bond be maintained;
(3)
Except for an applicant under Regulation .02C or .08G of this chapter, be in the amount of $250,000;
(4)
Contain the following language or similar language acceptable to the Commission: "Payment under this bond shall be due if:
(a)
The Commission determines that (electricity supplier name) is financially insolvent or unable to meet its obligations as a licensed electricity supplier in Maryland; or
(b)
Ordered by a Maryland court after a person who has obtained a judgment against a licensed supplier has previously attempted to collect the judgment through all other means available to the court";
(5)
Permit the Commission to direct that the proceeds of the bond be paid or disbursed to satisfy the electricity supplier's financial obligations to the Commission or other Maryland governmental entity;
(6)
Permit a Maryland court to direct proceeds of the bond be paid to a person that has obtained a judgment against a licensed supplier and has previously attempted to collect the judgment through all other means available to the Court;
(7)
Permit payment of obligations up to the amount of the bond; and
(8)
Be obtained from a company licensed in Maryland to write surety types of insurance.
I.
Proof of Financial Integrity.
(1)
For proof of financial integrity, an applicant may rely upon a guarantee provided by a parent corporation or other person.
(2)
If a parent corporation or other person undertakes to guarantee the financial integrity of the applicant, the parent corporation or other person shall supply the information and meet the financial standards that would otherwise be required of the applicant.
(3)
An applicant may submit an instrument similar to a bond, or other financial surety or guarantee, in the amount of $250,000, for the Commission's consideration.
(4)
The Commission may accept an alternate form of financial guarantee in place of the bond required under Regulation .02C of this chapter or §F of this regulation.
J.
Maintaining a Bond as Proof of Financial Integrity.
(1)
At the request of an electricity supplier, upon expiration or withdrawal of a bond submitted under this regulation, or on a periodic basis, the Commission shall review the financial information submitted by a licensed electricity supplier.
(2)
Based on new or additional information submitted by the electricity supplier, the Commission may find that the electricity supplier meets the Commission's financial integrity standards and no longer needs to provide a bond.
(3)
In the absence of a Commission finding that a bond is no longer necessary, a supplier shall renew or replace a bond before the expiration of the bond.
(4)
Failure to maintain a valid bond required under this regulation may result in the suspension or revocation of an electricity supplier's license.
K.
A licensed electricity supplier may seek to withdraw a bond or other form of financial integrity guarantee provided to the Commission, if:
(1)
PJM Interconnection, LLC grants the electricity supplier an unsecured credit allowance in an amount greater than $2,000,000; and
(2)
The supplier provides documentation of the credit allowance to the Commission.
L.
The Commission may in its discretion require that an electricity supplier that will have an OREC purchase obligation deliver to the Commission, no later than 30 days prior to the year in which the offshore wind energy RPS takes effect, a performance bond or other form of collateral support in such amounts, from such providers and in such form as shall be determined by the Commission to secure the payment obligations of the electricity supplier under COMAR 20.61.06.
Regulation .09 Granting a License.LinkCopy Citation
After review, the Commission may grant a license on finding that the issuance will promote a competitive retail electricity supply and electricity supply services market.
Regulation .10 Approving a Contract for Energy Assistance Households.LinkCopy Citation
A.
For contracts signed on or after July 1, 2023, an electricity supplier may not serve a customer in an energy assistance household except pursuant to a Commission-approved contract for energy assistance households.
B.
An electricity supplier applying for approval of a contract for energy assistance households shall file on a form provided by the Commission.
C.
The submission shall include:
(1)
The identity of the applicant;
(2)
The service territories and commodities applied for;
(3)
A copy of the contract and contract summary form that will be used for sales to energy assistance households;
(4)
A description of the price a customer will pay, as it will appear on the customer contract;
(5)
For any months where the utility standard offer service rate is not known at the time of application, a description of how the supplier will ensure that the retail supplier’s rate for energy assistance households remains at or below the utility standard offer service rate;
(6)
A commitment for the entirety of the term of the supply contract to charge at or below the utility standard offer service rate;
(7)
A commitment to follow the terms of Public Utilities Article, §4-308, Annotated Code of Maryland; and
(8)
A commitment to uniquely identify the offer in such a way as to distinguish the Commission-approved contract for energy assistance households from other supply products the supplier may be offering for sale in Maryland.
D.
The Commission may approve a supplier’s application for a contract for energy assistance households subject to any conditions the Commission determines appropriate.
Chapter annotations
Authority: §§2-113, 2-121, 4-308, 5-101, 7-507, and 7-511, Annotated Code of Maryland
History: Effective date: September 1, 2003 (30:17 Md. R. 1204)
History: Regulation .01 amended effective March 7, 2022 (49:5 Md. R. 366)
History: Regulation .02B amended effective April 11, 2005 (32:7 Md. R. 684); September 15, 2014 (41:18 Md. R. 1010); March 7, 2022 (49:5 Md. R. 366)
History: Regulation .02C, D adopted effective April 11, 2005 (32:7 Md. R. 684)
History: Regulation .02E, F adopted effective March 7, 2022 (49:5 Md. R. 366)
History: Regulation .03A amended effective July 10, 2023 (50:13 Md. R. 513)
History: Regulation .07A amended effective March 7, 2022 (49:5 Md. R. 366)
History: Regulation .08 amended effective April 11, 2005 (32:7 Md. R. 684); March 7, 2022 (49:5 Md. R. 366)
History: Regulation .08K adopted effective September 15, 2014 (41:18 Md. R. 1010)
History: Regulation .10 adopted effective July 10, 2023 (50:13 Md. R. 513)