Energy Industry Deregulation and Energy Broker Licensing Compliance

Starting in the 1970’s with the passage of the Public Utilities Regulatory Policies Act, and continuing in 1992 with the Energy Policy Act, many US states have chosen to deregulate their local energy industry1.  With this change, utilities are no longer responsible for generation and transmission of energy and instead the production of energy is handled by energy supplier companies who may set their own prices and compete to win over both commercial and residential energy consumers.  To aid consumers in their supplier decision, energy brokers offer their services to sift through the available offers to find the most advantageous supplier relationship.

Much like energy supplier licensing, energy broker licensing is heavily regulated by state governments.  License applications often include extensive educational and experience background information on all owners of the business entity. Proof of financial fitness must often be provided through a surety bond, current financial statement, and forecasted financial outlook of the business. Many times energy broker license applications automatically become a matter of public record once submitted, and applicants must file a Motion for Protective Order to request the application remain confidential. Most licenses require annual reports and annual or biennial renewals, and require license holders to keep the state appraised of any changes in their management and scope of business.

Unfortunately, state regulations and requirements for energy brokers are not always clear, and penalties for non-compliance can be crippling.  In the case of an energy broker in Pennsylvania who operated without a license for almost a year, the Pennsylvania Public Utility Commission (PUC) levied a civil penalty of $89,800.  According to an attorney representing the energy broker, the PUC website does not specify that a broker needs a license, and only on the third page of the application was it apparent that this broker needed a license. To complicate matters further, the PUC does not require a supplier to check if brokers are licensed before allowing sale to go through them2. This lack of clarity and oversight create a situation in which an energy broker may not realize they are noncompliant until it is too late.

Without clear regulation or accountability on behalf of the supplier, industry knowledge and research as well as dutiful ongoing maintenance is required to avoid the financial havoc non-compliance can cause.  LicenseLogix’s team of research experts stay up-to-date with changing requirements and forms, and can create a customized Business License Research Package detailing all licensing requirements you may need to operate as a energy broker.  We complete license applications efficiently and correctly, allowing your in-house staff to save valuable time struggling to determine what licenses are necessary.  Most importantly, once your license has been issued we ensure that you remain compliant with all energy broker licensing laws.  Our Client License Information Center (CLiC) provides subscribers with a secure portal where they can view all license documents and renewal due dates, as well as receive automatic license status updates via email.  CLiC subscribers can also choose to have LicenseLogix automatically renew any renewable licenses, so you never have to fear the damaging fines and penalties that non-compliance can cause.

Receive a free consultation today and to learn more about all of the ways LicenseLogix can help you and your business deal with the complexities of energy broker licensing and energy supplier licensing!

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1 http://www.energysmart.enernoc.com/regulated-and-deregulated-energy-markets-explained/

2 http://powersource.post-gazette.com/powersource/policy-powersource/2016/06/28/Unlicensed-sales-put-electricity-brokers-in-spotlight-Pennsylvania-PUC/stories/201606210003

 
 Article by Peter Mangs, Research Analyst at LicenseLogix