About Natural Gas Supplier Licensing

Firms that provide natural gas supply services in a competitive energy state are generally required to hold a license before performing supply services. Natural gas suppliers are typically regulated by state public utility commissions. They're regulated federally by the Federal Energy Regulatory Commission (FERC). However, natural gas supplier licensing occurs only at the state-level.

Suppliers that also act as natural gas agents or aggregators will likely need a separate state-issued license to provide those services.

Initial Registration

Before starting the registration process, it is important to make sure that your business entity is in good standing. If you provide service outside your home state, you must have foreign qualifications where you plan to serve. Foreign qualification is not always a prerequisite to licensure. You may be able to make licensing and foreign qualification filings concurrently.

Application requirements vary by state, but common requirements include:

» Business entity information

» Articles of incorporation/formation

» Financial statements

» Submission of a surety bond

» Proof of relevant experience for principals of the business

» A list of officers and owners of the business

» Disciplinary and criminal history for key personnel

» Customer service contact information

» Proposed service area and related information

Marketing material information

In addition to state utility commission requirements, suppliers are usually required to register with the natural gas utility that serves in the supplier’s proposed area of service. Multiple utility company registrations may be needed depending on where you want to provide service. Filing tax registrations with the department of revenue is another important step when starting up or expanding to a new state. Many states offer consolidated applications for tax registration, but in some states applicants will file multiple applications, sometimes with multiple state agencies.

Maintaining Compliance

After the public utility commission issues the licences, there are ongoing requirements to maintain it's active status. Filing on time can save you from headaches down the road. Missing periodic filing deadlines can jeopardize your company's authority to supply electricity in a jurisdiction.

In most states natural gas supplier licenses need to be renewed annually. But there are also states with biennial, triennial, and other renewal periods for licenses.

Along with license renewal filings, many states require natural gas suppliers to file periodic reports related to distribution volumes, revenue, and bonding requirements. Reporting requirements vary in frequency but are usually filed on an annual or quarterly basis.

Keeping up with each state’s requirements, tracking renewals, and submitting the applications on time are critical to avoiding penalties. Dedicated compliance services and software can help you keep track of varying jurisdiction requirements and relevant updates to state laws.