dPi Energy to be Sold Under Settlement Agreement with PUCT Staff

May 10, 2011
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dPi Energy, LLC would be sold by its current owner, Amvensys Telecom Holdings, LLC, or face revocation of its REP certificate, under a settlement among the company, PUCT Staff, and several of the TDUs (37917).

The settlement would resolve Staff's petition to revoke dPi Energy's REP certificate for, among other reasons, lack of managerial and technical competency due to its 50% ownership by Zahed "Ed" Lateef, who was a principal of Riverway Power when it experienced an involuntary mass transition (12/15). Individuals who have previously served as a principal of a REP experiencing an involuntary mass transition shall not own more than 10% of a REP or directly or indirectly control a REP, per the Substantive Rules.

The stipulation would require Amvensys Telecom Holdings, LLC, which ultimately owns dPi Energy and is owned by Lateef and his wife (50% each), to divest all of its ownership and control of dPi Energy, by a redacted date, in a process managed by Southwest Securities.

The acquiring party would be required to timely file an application to amend the acquired dPi REP certificate after the execution of the sale agreement. Thereafter, dPi Energy and the acquiring party would close the transaction to acquire dPi Energy within ten business days of the Commission's approval of the transfer of the REP certificate to the acquiring party.

If the Commission denies that application, or if dPi Energy and the acquiring party fail to close the acquisition transaction within ten days of the Commission's approval of the application, the settling parties agree to the entry of a consent order which would revoke dPi's REP certificate.

Prior to or upon the closing of the acquisition transaction, Zahed Lateef would resign as an officer and manager of dPi Energy.

Under the settlement, dPi Energy covenants and agrees to pay its ordinary course of business debts and obligations to CenterPoint, AEP Texas, Texas-New Mexico Power, and ERCOT when due and payable. Failure to pay by the due date would result in the entry of the consent order revoking dPi's REP certificate.

Lateef, in his personal capacity, has paid in full some $80,000 in TDSP service charges owned by Riverway Power to the AEP companies, TNMP, and Sharyland. Additionally, Lateef had paid $16,000 of the approximately $116,000 owed to Oncor by Riverway, and Lateef (along with dPi) paid CenterPoint $43,000 of about $310,000 owed by Riverway. Nothing in the stipulation constitutes a settlement or waiver of CenterPoint's right to pursue any claims it may presently have for the remainder of the amount due.

Lateef has also offered to pay ERCOT a redacted sum over a period of 24 months in full settlement of the litigation brought by ERCOT against Riverway.

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