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<title>Rhode Island Division of Public Utilities and Carriers Proposes Rules for
Nonregulated Power Producers</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">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.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<td width="69%" valign="top"><img src="../images/statelin.gif" alt="STATELINE by Robert Olson" border="0" WIDTH="375" HEIGHT="75"><p><b><u>
<br>
<br>
December 1998</u><br>
<font face="Arial"><big><big><big>Rhode Island Division Of Public Utilities
And Carriers Proposes Rules For Non-Regulated Power Producers<br>
</big></big></big></font></b><strong>by Robert Olson -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
12/98</em>)</font></p><p ALIGN="JUSTIFY"><font face="Arial">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. </font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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. </font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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. </font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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." </font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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.</font></p>
<p ALIGN="JUSTIFY"><font face="Arial">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.</font></p>
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<blockquote>
<p align="left"><font face="Arial">
<small>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:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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