PUCT Intends to Revoke Milagro REP Certificate, Provides Time for Sale of Customer Book Email This Story March 14, 2011
The PUCT intends to revoke the REP certificate of Milagro Power (TexRep3 LLC), but withheld final action until its next open meeting on March 24 to permit time for a potential sale of Milagro's book, and to avoid transferring customers to POLR (37753 et. al.).
At Friday's open meeting, Commissioners were prepared to adopt the findings of a proposal for decision which would hold that revocation is appropriate given the draft's conclusion that Milagro lacks the managerial and technical fitness to hold a REP certificate due to past sanctions against a Milagro principal. The proposal for decision was first reported by Matters (see 2/9 for detailed discussion and draft findings).
However, Commissioners agreed to postpone final adoption until March 24 to provide an opportunity for other REPs to complete a potential purchase for all or a portion of Milagro's customer base of over 3,000 customers.
Milagro said at the open meeting that it has received letters of intent from several REPs to enter into negotiations for the acquisition of the book and other assets, but said that such negotiations have not yet come to fruition.
Commissioners stressed to Milagro that it should inform potential buyers that buyers should move quickly to consummate a deal, otherwise the acquirers may find that the book is no longer of value, as, if a deal is not consummated by the next open meeting, the Commission will start providing notices to customers that they will be transitioned to POLR, and such notices will likely prompt switching by customers away from Milagro prior to the POLR switch, and thus customers would no longer be part of the book.
Commissioners wanted to give some additional time for a potential deal as well as providing a notice period before the start of the POLR transition to provide a shopping opportunity for customers, but said that a proposed 90-day delay in the effective date of any revocation order, which was one of the alternatives suggested by Staff, was too long.