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About The Author:

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions.

He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive
Suite 301
Concord, NH 03301
(603) 225-9716









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STATELINE by Robert Olson

December 1998

Rhode Island Division Of Public Utilities And Carriers Proposes Rules For Non-Regulated Power Producers
by Robert Olson  --   Brown, Olson and Wilson, P.C.
(originally published by PMA OnLine Magazine: 12/98)

Two Rhode Island agencies supervise and regulate public utilities: the Public Utilities Commission (PUC) and the Division of Public Utilities and Carriers (Division). The Division is responsible for enforcing all laws and regulations relating to public utilities, and has proposed rules governing the registration of nonregulated power producers (NPPs). NPPs are defined as companies "engaging in the business of producing, manufacturing, generating, buying, aggregating, marketing or brokering electricity for sale at wholesale or for retail sale to the public." The definition excludes companies which merely negotiate the purchase of energy services on behalf of their clients and do not actually buy or sell energy services themselves.

The Division’s proposed rules address registration requirements for NPPs, the registration procedure, and the relationship between NPPs and their customers. Registration of an NPP is automatically effective thirty days after filing the application for registration, unless rejected within that time. Any rejection by the Division of an application must be accompanied by reasons and, if practicable, suggested alternatives. Registration must remain in good standing for an NPP to do business in Rhode Island. An NPP’s application for registration must include proof that the NPP meets the prerequisites for registration. These prerequisites include financial soundness, regional power pool membership or association, and certain other requirements. A showing of the statutory requirement of financial soundness can be met by way of surety bond, a recent financial statement, or any other mechanism the Division may specify. The NPP must provide evidence it meets the PUC’s Reliability Responsibility Regulations for NPPs by either being a New England Power Pool (NEPOOL) participant or by having a written agreement with a NEPOOL member under which the member agrees to include the load served by the NPP in its load. In the registration application, the NPP must affirm it will comply with all Rhode Island General Laws and all rules and regulations of the PUC and Division, and provide proof of approval to do business in Rhode Island. Copies of the registration application must be provided to the PUC and all electric distribution companies. The NPP must update any change in information to a registration application within ten days of the change.

The Division’s proposed rules also establish a registration revocation procedure. Revocation proceedings must be initiated if the Division determines that the NPP is not in compliance with registration requirements and may be initiated based on a consumer complaint or the Division’s own investigation. The NPP will be afforded notice and a hearing. The proposed rules state, without further clarification, that revocation does not affect the rights or liabilities of parties who did business with the NPP in Rhode Island.

The proposed rules also regulate the contracts between NPPs and consumers. The contracts must be written in plain English and include—in this order—pricing information, term of service, rights and limits on termination, whether there is a budget plan available, the dispute resolution process, and the customer service number. Pricing information must identify all charges, any price change formulas, all elements of pricing, and any potential for price volatility. Under the proposal, pricing provisions must be based on the energy actually delivered to the customer’s meter. The NPP may not physically cut off service; rather, the electric distribution company controls service terminations, which must be accomplished in accordance with the distribution company’s termination rules. Copies of any environmental claims made by the NPP, including generation source and emissions claims, must be filed with the Division within ten days of making the claim public, with documentation supporting the claim. These claims must be factually accurate and not misleading.

Finally, the proposed rules address disputes between NPPs and customers. Disputes related to contract claims or billing are to be handled outside of the Division’s dispute resolution process, but disputes based on alleged violations of the PUC’s Consumer Protection Regulations or the Division’s proposed rules fall under the Division’s process. Complaints filed under the PUC’s Consumer Protection Regulations will be heard by the Division where the Division has been delegated authority to hear such a complaint. A response must be filed within ten days, but the Division may shorten the time if the complaint requires expeditious action. The Division may also "take whatever action is reasonably necessary to protect the public while the hearing is pending."

Under the complaint resolution process as proposed, the Division is to issue a decision within ten days of hearing or submission of briefs, although the Division may extend the time up to fifteen additional business days. The Division may order remedies within its authority, which includes any order reasonably necessary to enforce the proposed rules, resolve any disputes, or otherwise protect the public interest. The Division’s decision is final and binding, as though the PUC issued the decision, unless the decision is appealed to the PUC. Appeals of the Division’s decision may be taken as a matter of right to the PUC upon a notice of appeal filed within five business days of the Division’s decision, and an appeal of the PUC’s decision can be made to the Supreme Court. The Division can enforce compliance with its decision by requesting that the PUC issue an order and provide appropriate relief.

The PUC held a public hearing and solicited comments on these proposed rules on November 19, 1998. The PUC estimates a next draft or the final rules will be recommended and presented to the Division at the end of December, 1998 or in January, 1999.

Robert A. Olson is a partner in the law firm of Brown, Olson & Gould P.C. which maintains a nationwide practice in energy law, public utility law and related commercial transactions. He can be reached at:

Brown, Olson & Gould, PC
2 Delta Drive, Suite 301
Concord, NH 03301 | (603) 225-9716

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