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Glacial Energy Files Suit Against PUCT, Claiming Ownership Restriction Cannot Be Applied to Its License
January 24, 2012
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Copyright 2010-
Glacial Energy of Texas, Inc. has filed a petition in Travis District Court for a temporary and permanent injunction against the Public Utility Commission of Texas and its enforcement of a Notice of Violation issued against Glacial.
As previously reported (1/10), PUCT Staff is seeking revocation of the Glacial REP certificate, alleging that Glacial has failed to comply with Subst. R. 25.107(g)(1)(D) which provides that, "[a]n individual that was a principal of a REP that experienced a mass transition of the REP's customers to POLR ... shall not own more than 10% of a REP or directly or indirectly control a REP." This rule became effective May 21, 2009, except that REPs with existing certificates were given 12 months to comply with the new provisions.
Glacial pursues two main arguments its petition.
First, Glacial claims that the defendants, including the Commission and the Commissioners individually, "are acting outside the scope of their authority in applying the 10% Limitation Rule to Glacial because Defendants' act constitutes an impermissible retroactive application of law, in violation of the United States and Texas Constitutions."
Additionally, Glacial claims that the rule adopting the 10% limit is invalid because, among other reasons, the Commission exceeded its authority under PURA in regulating REP ownership, and because the PUCT did not provide "substantial evidence" that the involvement of principals of REPs that previously experienced a mass transition is, "probative of the [REP] applicant's 'managerial and technical ability to provide continuous and reliable retail electric service to customers in accordance with customer contracts.'"
The retroactive argument merits further discussion. To be clear, the PUCT's NOV does not apply the new 2009 REP certification requirements to a period of time prior to their effective date. In other words, the NOV only alleges that Glacial was out of compliance with the 10% ownership limitation for the period on and after May 21, 2010, the effective date of the new rules as applied to Glacial.
Rather, Glacial is claiming that the application of the 10% limitation is "retroactive" because Glacial received its REP certification under the prior certification rules, as they existed in 2006.
However, the certification rules in effect at the time Glacial was certified did explicitly provide that, "Suspension and revocation. Pursuant to PURA §39.356, certificates granted pursuant to this section are subject to suspension and revocation for significant violations of PURA, commission rules, or reliability standards adopted by an independent organization."
As to the PUCT's authority to regulate REP ownership, PURA 39.352 provides in relevant part that, "The commission shall issue a certificate to provide retail electric service to a person applying for certification who demonstrates: (1) the financial and technical resources to provide continuous and reliable electric service to customers in the area for which the certification is sought; (2) the managerial and technical ability to supply electricity at retail in accordance with customer contracts; (3) the resources needed to meet the customer protection requirements of this title; and (4) ownership or lease of an office located within this state ..."
The case is D-1-GN-12-000148
Email This StoryCopyright 2010-
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