As required by law, the Commission has initiated a proceeding to consider the collection of assessments from Alternative Retail Electric Suppliers and Alternative Gas Suppliers, in addition to electric and gas utilities.

The law specifically provides that "the Commission shall initiate a docketed proceeding in which it shall consider, in addition to assessments from electric and gas utilities subject to this subsection, the raising of assessments from, or the payment of fees by, water and sewer utilities, entities possessing certificates of service authority as alternative retail electric suppliers under Section 16-115 of this Act, entities possessing certificates of service authority as alternative gas suppliers under Section 19-110 of this Act, and telecommunications carriers providing local exchange telecommunications service or interexchange telecommunications service under Sections 13-204 or 13-205 of this Act. The amounts so determined shall be based on the costs to the agency of the exercise of its regulatory and supervisory functions with regard to the different industries and service providers subject to the proceeding. No less often than every 3 years after the end of a proceeding under this subsection (i-5), the Commission shall initiate another proceeding for that purpose."

A procedural schedule for the proceeding has not yet been established. The full texts of the Order and Staff Report are available on the NEM Website.

The Commission held a legislative-style hearing this week to consider the petition of certain suppliers for the implementation of a supplier consolidated billing (SCB) option for electric and natural gas consumers in Maryland. Participating in the hearing were numerous individual competitive suppliers and supplier trade groups, including NEM, the utilities, OPC, Maryland Energy Administration and Commission Staff.

The competitive supplier community explained the benefits to consumers to be realized from a supplier consolidated billing. This includes responsiveness to consumer preferences for a single bill as well as the ability for the supplier to establish a direct relationship with the customer. SCB allows the supplier to communicate with the customer through the bill in the form of bill messages, product information, usage information and consumer education. It also allows suppliers to offer innovative products and services that cannot be accommodated under utility consolidated billing. Moreover, SCB results in decreased utility collections and decreased utility billing systems. SCB would also leverage ratepayer investments in advanced metering infrastructure that have been made in Maryland.

The Commissioners were concerned that SCB may impact consumer protections and supplier oversight. It was noted that suppliers have been offering SCB in Texas and Georgia and meeting all relevant legal and regulatory consumer protection requirements in those jurisdictions. Commissioners were interested in whether and how SCB could spur economic development in Maryland. Commissioners questioned the treatment of partial payments under SCB and how it effects termination for nonpayment. Commissioners were also concerned about the application of an early termination fee to bundled products, beyond commodity.

Utilities maintained that it is important for them to maintain a direct relationship with customers too. They suggested dual billing would be a better option. One utility argued that the utility right to terminate is tied to its obligation to serve and that it would radically change the paradigm to provide otherwise. OPC echoed this argument.

Also discussed was the issue of cost recovery. Suppliers maintained that implementation of SCB was contemplated under the original choice law and as such the implementation costs should be recovered from all customers because it benefits all customers. Certain utilities estimated their implementation costs at approximately $4.5 million, plus on-going maintenance costs. Staff disputed the magnitude of that cost estimate.

The Commission asked about the advisability of a phased approach or "soft open" to SCB.

Commission Staff supported the availability of SCB and believed the time is ripe to develop the SCB model. However, Staff favored a working group process, rather than supplier requests for a Commission Order directing SCB implementation first with the working group to develop the details after that. Staff requested Commission guidance on whether suppliers should be permitted to terminate for nonpayment, saying it would be a large break from past practice. Staff argued that nonpaying customers should revert to standard offer service.

The Commission will hold the record open until March 7th for the submission of any additional filings.

The Commission directed Staff and NYSERDA to submit for its consideration a detailed implementation plan that would change the current manner in which LSEs remit zero emissions credit (ZEC) payments to NYSERDA based on a fixed ZEC obligation calculated based on each LSE's historic share of statewide load, to a new "pay as you go" model that would be based on each LSE's actual known load. Under this approach, "NYSERDA and Staff would annually calculate a fixed dollar per MWh rate that each LSE will use to determine their financial obligation based on the actual monthly load served, as opposed to an obligation to purchase a fixed number of ZECs from NYSERDA based on a dated assessment of an LSE's load share ratio. This process is intended to eliminate the need for the Commission to adjust LSE ZEC compliance obligations and reduce the dollar magnitude of the settlements between NYSERDA and the LSEs during the annual reconciliation process."

The decision was prompted by another ESCO petition requesting a reduction in its ZEC obligation due to a dramatic reduction in load served as compared to NYSERDA's computation based on historical load, from which the ZEC payments are derived. The Commission granted the ESCO's requested reduction in ZEC obligation based on its demonstrated substantial loss in load.

The Commission further cautioned that "in March 2018, LSEs will be notified by NYSERDA as to their April 1, 2018, through March 31, 2019, ZEC obligation. This obligation will be calculated in the same manner as the previous ZEC obligation. [ESCO A] and all other jurisdictional LSEs should note that these obligations must be paid in accordance with their executed ZEC agreements with NYSERDA. LSEs may not, on their own accord, and without explicit Commission authorization, reduce or eliminate monthly payments for any reason; this includes during the pendency of a petition seeking changes to a ZEC obligation."

The full text of the Order is available on the NEM Website.