26 Del. Admin. Code § 3001-2.0 - Certification of Electric Suppliers
2.1 Before a person may offer a contract or
commence service to a customer, such person or entity must obtain an electric
supplier certificate from the Commission to sell electric supply service to, or
arrange the purchase on behalf of, customers.
2.2 Certification Requirement. All applicants
shall file with the Commission an original and 5 copies of an application for
an electric supplier certificate or comply with the electronic filing
requirements of 26 DE Admin. Code 1001 Rules of Practice and Procedure of the
Commission. Such application shall contain all the information and exhibits
hereinafter required and may contain such additional information as the
applicant deems appropriate to demonstrate to the Commission that it possesses
the technical, financial, managerial and operational ability to adequately
serve the public consistent with applicable State laws. Applications shall
contain at least the following information:
2.2.1 Name, Etc. The legal name and, if
applicable, tax identification number or employer identification number of the
Applicant, as well as the trade names under which the applicant proposes to do
business in Delaware. List any other names under which the applicant, its
affiliate interests, or any current or previous officer, director, or manager
has previously done business in Delaware;
2.2.2 Certifications. Certification issued by
the state of formation or incorporation certifying that the applicant is in
good standing and qualified to do business in that state;
2.2.3 Authorization. Documentation from the
Delaware Secretary of State, issued within 90 days of filing, and the Delaware
Division of Revenue, that the applicant is legally authorized and qualified to
do business in the State;
2.2.4
Registered Agent. The name and post office address of a registered agent,
pursuant to 26 Del.C. §
401, within the State upon whom
service of any notice, order or process may be made;
2.2.5 Leadership. The names, titles,
addresses, and telephone numbers of the applicant's principal officers,
directors, partners, or other similar officials;
2.2.6 Corporate Structure. A description of
the applicant's corporate structure, including all parent, affiliated, and
subsidiary companies. Include a graphical depiction of such
structure;
2.2.7 Contact
Information. The applicant's name, title, e-mail address (if applicable),
mailing address and telephone number:
2.2.7.1
Regulatory contact person responsible for the electric supplier's Delaware
operations; and
2.2.7.2 Customer
complaint contact person, if different from the regulatory contact
person;
2.2.8 Attorney.
The name, address, telephone number, and e-mail address of the applicant's
attorney. If the applicant is not using an attorney, explicitly state
so;
2.2.9 Toll Free Number. A
toll-free telephone number to the applicant's customer service center where
customers may call with questions about the electric supplier's services,
including the electric supplier's and contract summary. Brokers proposing to
serve non-residential customers may provide a Delaware telephone
number;
2.2.10 Website. The
electric supplier's website address, accessible to prospective and current
customers;
2.2.11 Consent to
Jurisdiction. A statement consenting to the jurisdiction of the Delaware courts
for acts or omissions arising from the electric supplier's and its agent's
activities in the State;
2.2.12
Criminal Activities. A statement detailing any criminal activities, except for
misdemeanors or lesser violations, of which the applicant or any of its
affiliate interests, officers, and directors (and prior officers and directors
who left the applicant's employ less than three months before the filing of the
application) have been convicted. Any criminal activity disclosure shall
include a copy of any order of conviction and restitution;
2.2.13 Marketing Plans and Materials. If the
applicant intends to serve residential customer or small commercial customer,
the applicant shall provide, to the extent then known or in existence:
2.2.13.1 A description of the marketing plan
or method it plans to use in Delaware. This description shall identify whether
door-to-door, telemarketing, direct mail, or other marketing channels will be
used and, where applicable, the identification of third party vendors that the
applicant will utilize to implement one or more marketing methods. The
application shall include the manner in which the applicant will ensure
oversight, training, and compliance with the specific provisions of these
Regulations with regard to telemarketing, door-to-door, and in-person
sales;
2.2.13.2 Copies of all
print, broadcast, electronic media, telecommunication, direct mail or in-person
written marketing materials, including but not limited to scripts for
telemarketing, advertisements, website presentations, and any other material of
a similar nature, that the applicant will use to market and promote its
products to Delaware residential customer and small commercial
customers;
2.2.14
Contracts and Contract Summaries. A copy of the applicant's standard
contract(s) form that it intends to offer to residential customer and small
commercial customers, and the standard contract summary form it intends to
include with its contracts for residential customer and small commercial
customers. A contract or contract summary that does not comply with the
requirements of these Regulations or other applicable Delaware laws and
regulations may be grounds for rejection of the application;
2.2.15 Performance Bonds. Each applicant,
except brokers, shall submit a copy of its performance bond or guarantee that
it has obtained as security to the electric distribution company if required in
the service agreement between the applicant and the electric distribution
company. The copy of the performance bond may be provided after the electric
supplier certificate is granted, but must be provided to the Commission prior
to marketing or offering electric supply service to customers;
2.2.16 Financial Information.
2.2.16.1 If publicly traded, the applicant's:
2.2.16.1.1 Certified financial statements
current within 12 months of the filing; and
2.2.16.1.2 Its most recent annual report to
shareholders and SEC Form 10-K (or a link to the report on the SEC
website);
2.2.16.2 If not
publicly traded, the applicant's accounting statements, including balance sheet
and income statements, audited financial statements, bank account statements,
tax returns or other indicia of financial capability, or, if applicable, the
certified financial statements of a publicly traded parent current within 12
months of the filing;
2.2.16.3
Applicants submitting European-style financial statements shall include a
statement of similarity;
2.2.16.4
Staff may request other indicia of financial capability.
2.2.17 Bankruptcy. The applicant shall
disclose whether it, or any of its affiliate interests, or any current or
previous officer, director, or manager, has filed for bankruptcy in the past 24
months;
2.2.18 Regional and
Wholesale Experience.
2.2.18.1 If the
applicant is a marketer:
2.2.18.1.1 A
description of the applicant's experience in the PJM regulated wholesale energy
market or other regional energy markets; and
2.2.18.1.2 A statement detailing that the
applicant has the technical ability to secure generation or otherwise obtain
and deliver electricity through compliance with all applicable requirements of
PJM.
2.2.18.2 If the
applicant is a broker:
2.2.18.2.1 Evidence of
technical fitness to conduct their proposed business. Any broker arranging the
purchase of electric supply service must demonstrate, through an affirmative
statement, that it will only arrange electricity sales from an entity that
complies with PJM's requirements and is a certified electric supplier in the
State, and must provide a list of electric suppliers through which the
applicant intends to arrange for the sale of electricity. Any change in the
identity of the electric suppliers on this list shall be provided to the
Commission within 5 business days of the effective date of the
change.
2.2.19
Retail Experience. A description of the applicant's experience in retail
electricity markets, including:
2.2.19.1 A
description of the services it plans to offer in the State, including types of
customers to be served and services provided;
2.2.19.2 A description of the operational
experience in retail energy markets of each principal officer, director, or
individual responsible for Delaware operations. If no such experience is
applicable, the applicant shall identify the means by which the applicant
proposes to support its managerial, technical, and financial capabilities for
the retail sale of electric supply service in the State;
2.2.19.3 For each entity identified below, a
list of states in which:
2.2.19.3.1 The
applicant or any of its affiliate interests is presently selling or brokering
electric supply service to customers. For each state listed include the license
or certification number, the applicable docket number if any, and the date the
license or certification was granted; and
2.2.19.3.2 The applicant or any of its
affiliate interests has received authority to sell or broker electric supply
service to customers but is currently not providing services. For each state
listed include the license or certification number, the applicable docket
number if any, and the date the license or certification was granted;
and
2.2.19.3.3 The applicant or any
of its affiliate interests has pending applications to sell or broker electric
supply service to customers. For each state listed include license, order, or
certificate numbers.
2.2.19.4 The electric supplier shall ensure
that it can accept, investigate, and resolve customer complaints in a prompt
and responsive manner;
2.2.20 Other Proceedings.
2.2.20.1 A list of states or federal
jurisdictions in which the applicant or any of its affiliate interests has:
2.2.20.1.1 Been denied approval to sell or
broker electricity to customers;
2.2.20.1.2 Been found to be in violation of a
state's laws, rules, or regulations;
2.2.20.1.3 Had its authority revoked,
modified, or suspended; or
2.2.20.1.4 Had any other adverse judicial or
regulatory action pertaining to the provision of retail energy services,
including any formal docketed complaints filed against:
2.2.20.1.4.1 The applicant;
2.2.20.1.4.2 Any of the applicant's affiliate
interests;
2.2.20.1.4.3 Any
officer, principal or director of the applicant; or
2.2.20.1.4.4 Any prior officer, principal or
director serving in that capacity at the time of the judicial or regulatory
action; and
2.2.20.1.5
Entered into a stipulation or consent decree in a formal docketed proceeding in
the past five years concerning its retail energy services in which the electric
supplier agreed to pay a civil penalty, provide customer restitution, or make
changes to its marketing and sales;
2.2.20.2 The applicant shall provide a copy
of any document, order, or decree identified in response to subsection
2.2.20.1;
2.2.20.3 A copy of any
settlement, adjudication, or court order with respect to an action filed by a
state Attorney General, the Federal Trade Commission, or U.S. Department of
Justice concerning the applicant's participation in retail and federal
electricity, natural gas, or telecommunications markets;
2.2.21 Pending Proceedings. A list of
proceedings in which a revocation or suspension of authority to sell or broker
electricity is pending or has been adjudicated, and the name, case number,
venue, final orders, and settlement agreements for each case identified.
Applicant shall provide copies of each order and settlement agreement. If no
such actions have been taken against applicant, explicitly state that fact;
and
2.2.22 FERC Approvals. A copy
of any FERC approval as a marketer, or the date and docket number of the
applicant's application to FERC for such approval. If the date and docket
number are provided, a copy of the applicant's FERC approval must be provided
within 30 calendar days of issuance.
2.3 Financial Security.
2.3.1 Applicability. The financial security
requirements of this Section apply only to applicants that seek an electric
supplier certificate to provide electric supply service to residential customer
and small commercial customers. The requirements of this paragraph do not apply
to standard offer service.
2.3.2
Requirements. An applicant must submit financial security that complies with
this subsection prior to the issuance of an electric supplier certificate. The
applicant must maintain financial security that complies with this subsection
as long as its electric supplier certificate to provide electric supply service
to residential and small commercial customers is valid and must submit
replacement security at least seven days prior to the expiration or
cancellation of a previously submitted financial security instrument. Upon
termination of an electric supplier certificate, the financial security
instrument shall remain in force until the Commission determines that all
obligations of the electric supplier have been satisfied.
2.3.3 Amount.
2.3.3.1 The initial security amount shall be
$100,000. The Commission may grant modifications of this amount commensurate
with the nature and scope of the business the applicant anticipates conducting
in the State upon submission of information in support of the modification. A
request for modification of the initial security amount may be made in
conjunction with the filing of the application.
2.3.3.2 After the initial year, the required
security amount shall equal $100,000 or 5% of the electric supplier's annual
revenues from sales of electric supply service to residential customers and
small commercial customers in Delaware over the prior calendar year, whichever
is greater.
2.3.3.3 The Commission
may determine that an applicant requesting to be a broker is required to post
security to ensure that the applicant has sufficient financial ability to
operate as a broker in the State. The Commission shall determine the bonding
requirement on a case-by-case basis. A bond, if required, shall be in the
amount of $10,000.
2.3.4
Use of Security Amounts. Upon a finding that an electric supplier has violated
a statute or regulation regarding the provision of service to residential
customer or small commercial customers, the Commission may direct that amounts
from the financial security be distributed consistent with State law.
2.3.5 Types of Security. An applicant may
satisfy the financial security requirements of this subsection through an
irrevocable letter of credit, cash, cash equivalents, financial instruments
that are easily liquidated and readily available to meet their costs of
providing electric supply service to customers, or any combination thereof.
Financial security documents must be in a form and contain language that is
acceptable to the Commission.
2.3.5.1 Letter
of Credit. An irrevocable letter of credit must unconditionally obligate the
issuing financial institution to honor drafts drawn on such letters for the
purpose of paying the obligations of the electric supplier pursuant to Delaware
law and regulations and must specify that the issuing financial institution
will notify the Commission 30 days in advance of the expiration or cancellation
of the letter of credit. The letter of credit must include the following
language: that the letter of credit binds the issuing financial institution to
pay one or more drafts drawn by the Commission as long as the draft does not
exceed the total amount of the letter of credit; and that any draft presented
by the Commission will be honored by the issuer upon presentation. The letter
of credit must be issued by a financial institution with a minimum corporate
credit rating of "BBB+" by Standard & Poor's or Fitch or "Baa1" by Moody's
Investors Service, or an equivalent short term credit rating by one of these
agencies. If, at any time, the corporate debt rating of an issuing financial
institution drops below the above specified levels, the electric supplier shall
notify the Commission in writing and provide replacement security that
satisfies the requirements of this regulation.
2.3.5.2 Cash and Cash Equivalent. Cash or
cash equivalents, including cashier's checks, sight drafts, performance bond
proceeds, or traveler's checks, and applicable interest shall be returned to
the electric supplier after all obligations are satisfied.
2.3.5.3 Certificate of Deposit. Certificate
of deposit or other liquid deposit with a reputable bank or other financial
institution.
2.3.5.4 Preferred
stock proceeds. Preferred stock proceeds or other corporate shareholder equity,
provided that use is restricted to maintenance of working capital for a period
of at least 12 months beyond certification of the applicant by the
Commission.
2.3.5.5 Line of Credit.
Line of credit issued by a reputable bank or other financial institution,
irrevocable for a period of at least 12 months beyond certification of the
applicant by the Commission.
2.3.5.6 Loan. Loan, issued by a qualified
subsidiary, affiliate or applicant, or a qualified corporation holding
controlling interest in the applicant, irrevocable for a period of at least 12
months beyond certification of the applicant by the Commission.
2.3.5.7 Assets. Identifiable physical assets
set forth in a balance sheet or similar statement.
2.3.5.8 Other Liability. Liability of
electric suppliers for violation of law, Commission orders or Commission
regulations is not limited by the security requirements of this
Section.
2.3.5.9 Staff may request
other indicia of financial capability.
2.4 Other Information. The Commission or its
staff may consider any other information submitted by the applicant if it can
show the financial, operational, managerial, and technical abilities of an
applicant.
2.5 Verification of
Application. The application must be accompanied by a signed, notarized
verification of a principal or officer of the applicant stating that all
information in the application is true and correct as filed to the best of the
principal's or officer's belief. Where the applicant is a corporation or an
association, the verification shall be signed by an officer thereof and
notarized.
2.6 Notice. Each
applicant, except brokers, shall publish notice of the filing of its
application in 1 newspaper of general circulation throughout the State in a
Commission-approved form, which will be provided to the applicant after receipt
of the application.
2.7 Application
Fee. An applicant for an electric supplier certificate shall submit a
non-refundable application fee of $750 with the application.
2.8 Incomplete or Abandoned Applications. The
Commission may reject an application that is not complete or that does not
contain subsequent information requested by the staff within 4 months of a
failure by the applicant to respond to such requests.
2.9 Waiver of Certification Requirements.
Upon the request of any applicant, the Commission, upon notice and opportunity
for comment, may, for good cause, waive any of the requirements of this
regulation that are not required by statute. The waiver may not be inconsistent
with the purpose of this regulation or 26 Del.C. §
1001
et
seq.
2.10 Review of the
Application. After the close of the comment period, staff shall make a
recommendation to the Commission to approve, conditionally approve or deny the
application. The Commission may choose to approve, approve with conditions,
modify, or deny an electric supplier certificate to an applicant where it finds
that doing so is in the public interest.
2.11 Material Change in Application
Information. Applicants shall inform staff of any material changes in any
information submitted in the application that occur from the time the
application is submitted to the time the Commission considers the application.
The failure to provide such notice within 10 business days after the change may
be grounds for rejection of the application.
2.12 Accuracy of Information. Failure to
provide accurate and factual information, or the submission of false or
misleading information, or the omission of material information in any
communication with staff or the Commission, may be grounds for rejection of an
application or a recommendation that an application be denied.
2.13 Term of ESC. Electric supplier
certificates are valid until revoked by the Commission or relinquished by the
electric supplier after the requisite notice to the Commission and to its
customers.
2.14 Transfer or
Relinquishing of ESC.
2.14.1 The transfer of
an ESC is prohibited without notice and approval of the Commission.
2.14.2 No electrical supplier shall cease
doing business within the State unless it has provided at least 60 days written
notice to the Commission, the DPA, the affected EDC(s), and its
customers.
2.14.3 The Commission
will consider an ESC to be relinquished if the electric supplier does not
provide the required yearly compliance filing in subsection 12.3 of this
regulation within 90 days of the required date. An electric supplier shall be
allowed 30 days' notice to cure a late annual filing.
Notes
27 DE Reg.
State regulations are updated quarterly; we currently have two versions available. Below is a comparison between our most recent version and the prior quarterly release. More comparison features will be added as we have more versions to compare.
2.1 Before a person may offer a contract or commence service to a customer, such person or entity must obtain an electric supplier certificate from the Commission to sell electric supply service to, or arrange the purchase on behalf of, customers.
2.2 Certification Requirement. All applicants shall file with the Commission an original and 5 copies of an application for an electric supplier certificate or comply with the electronic filing requirements of 26 DE Admin. Code 1001 Rules of Practice and Procedure of the Commission. Such application shall contain all the information and exhibits hereinafter required and may contain such additional information as the applicant deems appropriate to demonstrate to the Commission that it possesses the technical, financial, managerial and operational ability to adequately serve the public consistent with applicable State laws. Applications shall contain at least the following information:
2.2.1 Name, Etc. The legal name and, if applicable, tax identification number or employer identification number of the Applicant, as well as the trade names under which the applicant proposes to do business in Delaware. List any other names under which the applicant, its affiliate interests, or any current or previous officer, director, or manager has previously done business in Delaware;
2.2.2 Certifications. Certification issued by the state of formation or incorporation certifying that the applicant is in good standing and qualified to do business in that state;
2.2.3 Authorization. Documentation from the Delaware Secretary of State, issued within 90 days of filing, and the Delaware Division of Revenue, that the applicant is legally authorized and qualified to do business in the State;
2.2.4 Registered Agent. The name and post office address of a registered agent, pursuant to 26 Del.C. § 401, within the State upon whom service of any notice, order or process may be made;
2.2.5 Leadership. The names, titles, addresses, and telephone numbers of the applicant's principal officers, directors, partners, or other similar officials;
2.2.6 Corporate Structure. A description of the applicant's corporate structure, including all parent, affiliated, and subsidiary companies. Include a graphical depiction of such structure;
2.2.7 Contact Information. The applicant's name, title, e-mail address (if applicable), mailing address and telephone number:
2.2.7.1 Regulatory contact person responsible for the electric supplier's Delaware operations; and
2.2.7.2 Customer complaint contact person, if different from the regulatory contact person;
2.2.8 Attorney. The name, address, telephone number, and e-mail address of the applicant's attorney. If the applicant is not using an attorney, explicitly state so;
2.2.9 Toll Free Number. A toll-free telephone number to the applicant's customer service center where customers may call with questions about the electric supplier's services, including the electric supplier's and contract summary. Brokers proposing to serve non-residential customers may provide a Delaware telephone number;
2.2.10 Website. The electric supplier's website address, accessible to prospective and current customers;
2.2.11 Consent to Jurisdiction. A statement consenting to the jurisdiction of the Delaware courts for acts or omissions arising from the electric supplier's and its agent's activities in the State;
2.2.12 Criminal Activities. A statement detailing any criminal activities, except for misdemeanors or lesser violations, of which the applicant or any of its affiliate interests, officers, and directors (and prior officers and directors who left the applicant's employ less than three months before the filing of the application) have been convicted. Any criminal activity disclosure shall include a copy of any order of conviction and restitution;
2.2.13 Marketing Plans and Materials. If the applicant intends to serve residential customer or small commercial customer, the applicant shall provide, to the extent then known or in existence:
2.2.13.1 A description of the marketing plan or method it plans to use in Delaware. This description shall identify whether door-to-door, telemarketing, direct mail, or other marketing channels will be used and, where applicable, the identification of third party vendors that the applicant will utilize to implement one or more marketing methods. The application shall include the manner in which the applicant will ensure oversight, training, and compliance with the specific provisions of these Regulations with regard to telemarketing, door-to-door, and in-person sales;
2.2.13.2 Copies of all print, broadcast, electronic media, telecommunication, direct mail or in-person written marketing materials, including but not limited to scripts for telemarketing, advertisements, website presentations, and any other material of a similar nature, that the applicant will use to market and promote its products to Delaware residential customer and small commercial customers;
2.2.14 Contracts and Contract Summaries. A copy of the applicant's standard contract(s) form that it intends to offer to residential customer and small commercial customers, and the standard contract summary form it intends to include with its contracts for residential customer and small commercial customers. A contract or contract summary that does not comply with the requirements of these Regulations or other applicable Delaware laws and regulations may be grounds for rejection of the application;
2.2.15 Performance Bonds. Each applicant, except brokers, shall submit a copy of its performance bond or guarantee that it has obtained as security to the electric distribution company if required in the service agreement between the applicant and the electric distribution company. The copy of the performance bond may be provided after the electric supplier certificate is granted, but must be provided to the Commission prior to marketing or offering electric supply service to customers;
2.2.16 Financial Information.
2.2.16.1 If publicly traded, the applicant's:
2.2.16.1.1 Certified financial statements current within 12 months of the filing; and
2.2.16.1.2 Its most recent annual report to shareholders and SEC Form 10-K (or a link to the report on the SEC website);
2.2.16.2 If not publicly traded, the applicant's accounting statements, including balance sheet and income statements, audited financial statements, bank account statements, tax returns or other indicia of financial capability, or, if applicable, the certified financial statements of a publicly traded parent current within 12 months of the filing;
2.2.16.3 Applicants submitting European-style financial statements shall include a statement of similarity;
2.2.16.4 Staff may request other indicia of financial capability.
2.2.17 Bankruptcy. The applicant shall disclose whether it, or any of its affiliate interests, or any current or previous officer, director, or manager, has filed for bankruptcy in the past 24 months;
2.2.18 Regional and Wholesale Experience.
2.2.18.1 If the applicant is a marketer:
2.2.18.1.1 A description of the applicant's experience in the PJM regulated wholesale energy market or other regional energy markets; and
2.2.18.1.2 A statement detailing that the applicant has the technical ability to secure generation or otherwise obtain and deliver electricity through compliance with all applicable requirements of PJM.
2.2.18.2 If the applicant is a broker:
2.2.18.2.1 Evidence of technical fitness to conduct their proposed business. Any broker arranging the purchase of electric supply service must demonstrate, through an affirmative statement, that it will only arrange electricity sales from an entity that complies with PJM's requirements and is a certified electric supplier in the State, and must provide a list of electric suppliers through which the applicant intends to arrange for the sale of electricity. Any change in the identity of the electric suppliers on this list shall be provided to the Commission within 5 business days of the effective date of the change.
2.2.19 Retail Experience. A description of the applicant's experience in retail electricity markets, including:
2.2.19.1 A description of the services it plans to offer in the State, including types of customers to be served and services provided;
2.2.19.2 A description of the operational experience in retail energy markets of each principal officer, director, or individual responsible for Delaware operations. If no such experience is applicable, the applicant shall identify the means by which the applicant proposes to support its managerial, technical, and financial capabilities for the retail sale of electric supply service in the State;
2.2.19.3 For each entity identified below, a list of states in which:
2.2.19.3.1 The applicant or any of its affiliate interests is presently selling or brokering electric supply service to customers. For each state listed include the license or certification number, the applicable docket number if any, and the date the license or certification was granted; and
2.2.19.3.2 The applicant or any of its affiliate interests has received authority to sell or broker electric supply service to customers but is currently not providing services. For each state listed include the license or certification number, the applicable docket number if any, and the date the license or certification was granted; and
2.2.19.3.3 The applicant or any of its affiliate interests has pending applications to sell or broker electric supply service to customers. For each state listed include license, order, or certificate numbers.
2.2.19.4 The electric supplier shall ensure that it can accept, investigate, and resolve customer complaints in a prompt and responsive manner;
2.2.20 Other Proceedings.
2.2.20.1 A list of states or federal jurisdictions in which the applicant or any of its affiliate interests has:
2.2.20.1.1 Been denied approval to sell or broker electricity to customers;
2.2.20.1.2 Been found to be in violation of a state's laws, rules, or regulations;
2.2.20.1.3 Had its authority revoked, modified, or suspended; or
2.2.20.1.4 Had any other adverse judicial or regulatory action pertaining to the provision of retail energy services, including any formal docketed complaints filed against:
2.2.20.1.4.1 The applicant;
2.2.20.1.4.2 Any of the applicant's affiliate interests;
2.2.20.1.4.3 Any officer, principal or director of the applicant; or
2.2.20.1.4.4 Any prior officer, principal or director serving in that capacity at the time of the judicial or regulatory action; and
2.2.20.1.5 Entered into a stipulation or consent decree in a formal docketed proceeding in the past five years concerning its retail energy services in which the electric supplier agreed to pay a civil penalty, provide customer restitution, or make changes to its marketing and sales;
2.2.20.2 The applicant shall provide a copy of any document, order, or decree identified in response to subsection 2.2.20.1;
2.2.20.3 A copy of any settlement, adjudication, or court order with respect to an action filed by a state Attorney General, the Federal Trade Commission, or U.S. Department of Justice concerning the applicant's participation in retail and federal electricity, natural gas, or telecommunications markets;
2.2.21 Pending Proceedings. A list of proceedings in which a revocation or suspension of authority to sell or broker electricity is pending or has been adjudicated, and the name, case number, venue, final orders, and settlement agreements for each case identified. Applicant shall provide copies of each order and settlement agreement. If no such actions have been taken against applicant, explicitly state that fact; and
2.2.22 FERC Approvals. A copy of any FERC approval as a marketer, or the date and docket number of the applicant's application to FERC for such approval. If the date and docket number are provided, a copy of the applicant's FERC approval must be provided within 30 calendar days of issuance.
2.3 Financial Security.
2.3.1 Applicability. The financial security requirements of this Section apply only to applicants that seek an electric supplier certificate to provide electric supply service to residential customer and small commercial customers. The requirements of this paragraph do not apply to standard offer service.
2.3.2 Requirements. An applicant must submit financial security that complies with this subsection prior to the issuance of an electric supplier certificate. The applicant must maintain financial security that complies with this subsection as long as its electric supplier certificate to provide electric supply service to residential and small commercial customers is valid and must submit replacement security at least seven days prior to the expiration or cancellation of a previously submitted financial security instrument. Upon termination of an electric supplier certificate, the financial security instrument shall remain in force until the Commission determines that all obligations of the electric supplier have been satisfied.
2.3.3 Amount.
2.3.3.1 The initial security amount shall be $100,000. The Commission may grant modifications of this amount commensurate with the nature and scope of the business the applicant anticipates conducting in the State upon submission of information in support of the modification. A request for modification of the initial security amount may be made in conjunction with the filing of the application.
2.3.3.2 After the initial year, the required security amount shall equal $100,000 or 5% of the electric supplier's annual revenues from sales of electric supply service to residential customers and small commercial customers in Delaware over the prior calendar year, whichever is greater.
2.3.3.3 The Commission may determine that an applicant requesting to be a broker is required to post security to ensure that the applicant has sufficient financial ability to operate as a broker in the State. The Commission shall determine the bonding requirement on a case-by-case basis. A bond, if required, shall be in the amount of $10,000.
2.3.4 Use of Security Amounts. Upon a finding that an electric supplier has violated a statute or regulation regarding the provision of service to residential customer or small commercial customers, the Commission may direct that amounts from the financial security be distributed consistent with State law.
2.3.5 Types of Security. An applicant may satisfy the financial security requirements of this subsection through an irrevocable letter of credit, cash, cash equivalents, financial instruments that are easily liquidated and readily available to meet their costs of providing electric supply service to customers, or any combination thereof. Financial security documents must be in a form and contain language that is acceptable to the Commission.
2.3.5.1 Letter of Credit. An irrevocable letter of credit must unconditionally obligate the issuing financial institution to honor drafts drawn on such letters for the purpose of paying the obligations of the electric supplier pursuant to Delaware law and regulations and must specify that the issuing financial institution will notify the Commission 30 days in advance of the expiration or cancellation of the letter of credit. The letter of credit must include the following language: that the letter of credit binds the issuing financial institution to pay one or more drafts drawn by the Commission as long as the draft does not exceed the total amount of the letter of credit; and that any draft presented by the Commission will be honored by the issuer upon presentation. The letter of credit must be issued by a financial institution with a minimum corporate credit rating of "BBB+" by Standard & Poor's or Fitch or "Baa1" by Moody's Investors Service, or an equivalent short term credit rating by one of these agencies. If, at any time, the corporate debt rating of an issuing financial institution drops below the above specified levels, the electric supplier shall notify the Commission in writing and provide replacement security that satisfies the requirements of this regulation.
2.3.5.2 Cash and Cash Equivalent. Cash or cash equivalents, including cashier's checks, sight drafts, performance bond proceeds, or traveler's checks, and applicable interest shall be returned to the electric supplier after all obligations are satisfied.
2.3.5.3 Certificate of Deposit. Certificate of deposit or other liquid deposit with a reputable bank or other financial institution.
2.3.5.4 Preferred stock proceeds. Preferred stock proceeds or other corporate shareholder equity, provided that use is restricted to maintenance of working capital for a period of at least 12 months beyond certification of the applicant by the Commission.
2.3.5.5 Line of Credit. Line of credit issued by a reputable bank or other financial institution, irrevocable for a period of at least 12 months beyond certification of the applicant by the Commission.
2.3.5.6 Loan. Loan, issued by a qualified subsidiary, affiliate or applicant, or a qualified corporation holding controlling interest in the applicant, irrevocable for a period of at least 12 months beyond certification of the applicant by the Commission.
2.3.5.7 Assets. Identifiable physical assets set forth in a balance sheet or similar statement.
2.3.5.8 Other Liability. Liability of electric suppliers for violation of law, Commission orders or Commission regulations is not limited by the security requirements of this Section.
2.3.5.9 Staff may request other indicia of financial capability.
2.4 Other Information. The Commission or its staff may consider any other information submitted by the applicant if it can show the financial, operational, managerial, and technical abilities of an applicant.
2.5 Verification of Application. The application must be accompanied by a signed, notarized verification of a principal or officer of the applicant stating that all information in the application is true and correct as filed to the best of the principal's or officer's belief. Where the applicant is a corporation or an association, the verification shall be signed by an officer thereof and notarized.
2.6 Notice. Each applicant, except brokers, shall publish notice of the filing of its application in 1 newspaper of general circulation throughout the State in a Commission-approved form, which will be provided to the applicant after receipt of the application.
2.7 Application Fee. An applicant for an electric supplier certificate shall submit a non-refundable application fee of $750 with the application.
2.8 Incomplete or Abandoned Applications. The Commission may reject an application that is not complete or that does not contain subsequent information requested by the staff within 4 months of a failure by the applicant to respond to such requests.
2.9 Waiver of Certification Requirements. Upon the request of any applicant, the Commission, upon notice and opportunity for comment, may, for good cause, waive any of the requirements of this regulation that are not required by statute. The waiver may not be inconsistent with the purpose of this regulation or 26 Del.C. § 1001 et seq.
2.10 Review of the Application. After the close of the comment period, staff shall make a recommendation to the Commission to approve, conditionally approve or deny the application. The Commission may choose to approve, approve with conditions, modify, or deny an electric supplier certificate to an applicant where it finds that doing so is in the public interest.
2.11 Material Change in Application Information. Applicants shall inform staff of any material changes in any information submitted in the application that occur from the time the application is submitted to the time the Commission considers the application. The failure to provide such notice within 10 business days after the change may be grounds for rejection of the application.
2.12 Accuracy of Information. Failure to provide accurate and factual information, or the submission of false or misleading information, or the omission of material information in any communication with staff or the Commission, may be grounds for rejection of an application or a recommendation that an application be denied.
2.13 Term of ESC. Electric supplier certificates are valid until revoked by the Commission or relinquished by the electric supplier after the requisite notice to the Commission and to its customers.
2.14 Transfer or Relinquishing of ESC.
2.14.1 The transfer of an ESC is prohibited without notice and approval of the Commission.
2.14.2 No electrical supplier shall cease doing business within the State unless it has provided at least 60 days written notice to the Commission, the DPA, the affected EDC(s), and its customers.
2.14.3 The Commission will consider an ESC to be relinquished if the electric supplier does not provide the required yearly compliance filing in subsection 12.3 of this regulation within 90 days of the required date. An electric supplier shall be allowed 30 days' notice to cure a late annual filing.
Notes
27 DE Reg.