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Smitherman Recommends Allowing AllStar Revocation Case to Proceed to Hearing

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October 14, 2010

PUCT Chairman Barry Smitherman has recommended that the Commission reject a proposed settlement between AllStar Energy (TexRep 5 LLC) and Commission Staff concerning AllStar's application for an amended REP certificate and Staff's counter-petition to revoke AllStar's certificate, with Smitherman recommending that the State Office of Administrative Hearings proceed with the revocation case (37801, 38146).

As previously reported, the proceedings concern AllStar's amendment to correct its listed ownership to the George Corporation, instead of Horizon Power & Light, and its failure to disclose on its application a Delaware PSC investigation into Horizon which resulted in a civil penalty and under which Horizon agreed to relinquish its license.

Although Staff and AllStar entered into a revised settlement with additional conditions suggested by Commissioner Kenneth Anderson, Smitherman said in a memo in advance of today's open meeting that he is "extremely concerned" about the settlement, citing the "material omissions and misrepresentations" which he said were contained in AllStar's REP application.

"What both Commission Staff and TexRep5 d/b/a AllStar Energy seem to miss is that our rules are written so as to enable us to 'ferret out' previous bad acts, in other jurisdictions, by those now wishing to do business in Texas.  The theory of course is that those historically engaging in bad behavior may be more likely to engage in similar behavior in the future.  Had we intended that those historical bad acts be ignored simply by requiring the bad actors to pay tribute to this Commission, we could have put that concept into the rules when we painstakingly rewrote them in 2009," Smitherman said.

"It is important to note that the Delaware Public Service Commission, ably led by Chairwoman Arnetta McRae, assessed a total penalty of $500,000 against Horizon and its principals, Messrs [Neil] Liebman [sic] and [Tom] O'Leary, of which $400,000 was to be paid by Messrs Liebman [sic] and O'Leary individually.  In addition, Horizon was required to relinquish its Electric Supplier Certificate for a period of two years and begin winding down its business in Delaware," Smitherman added.

"Because this Commission has seemingly been deceived by TexRep5 d/b/a AllStar Energy, and because our staff has been required to expend resources on this case as a result of that deception, I will agree to accept the $50,000.  Regarding the REP certificate, however, I reject the settlement and recommend that SOAH proceed with the revocation case," Smitherman said.

   
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