Research Outline

Regulatory Framework for Electronic Service Providers


Determine the regulatory framework in the current market with regard to starting an independent ESP energy reselling company. The information will be used to understand the regulatory gaps when establishing such company.

Early Findings

California Public Utility Commission's ESP Framework

  • CPUC's public utilities code section 394a states that an electric service provider (ESP) is considered as a non-utility company that can provide electric services to consumers.
  • However, this can only be done within the service area of an electric utility.
  • CPUC's subparagraph (b) also mandates ESP to register with the commission and follow its policies.
  • CPUC's ESP registration framework applies to those entities that are providing services to homes and small businesses that have have less than 20 kW power needs.
  • These constraints were also deemed applicable to those ESPs that were not required to register before.
  • For new ESPs, the commission requires them to submit "resource adequacy requirements and renewable portfolio standards requirements."
  • Entities who wish to become ESPs must have a UDC-ESP service agreement with each utility distribution firms that are operating within the service location of the company.
  • Upcoming ESPs should also provide a minimum security deposit amounting to $25,000 in cashier's checks or financial guarantee bonds with the CPUC.
  • Furthermore, upcoming ESPs should establish an agreement with a scheduling coordinator (SC) that is empowered by the Independent System Operator (ISO) before providing services to their customers.
  • They should also provide a copy of "Section 394.5 Notice to the Energy Division of the CPUC" before providing their services to their customers.
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