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Notice of Violation Seeks $1.5 Million Fine Against Texas Retail Provider

January 4, 2013

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Copyright 2010-13 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The executive director of the Public Utility Commission of Texas issued a Notice of Violation to EBC Energy Today, LLC, in which Commission Staff is recommending a $1.5 million administrative penalty against EBC Energy Today, LLC for, among other things, allegedly acting as retail electric provider without a certificate.

The Notice of Violation is not a final decision, and EBC Energy Today has the right to request a contested case hearing on the alleged violations and the amount of any penalty.

In a report accompanying the Notice of Violation, Staff alleged that, "EBC Energy Today is an entity that operated as a REP without obtaining a certificate from the Commission or registering with ERCOT."

"Prier Energy, Inc. (Prier) is a certificated REP (No. 10147). EBC Energy Today and Prier entered into an agreement that was designed to aid and enable EBC Energy Today to purchase and sell electricity without a certificate. In essence, EBC Energy Today used Prier's identity through Prier's d/b/a Today's Energy to conduct electric transactions with ERCOT without disclosing the relationship to ERCOT or the Commission. EBC Energy Today did in fact operate as a REP without a certificate," Staff alleged.

Prier Energy has already reached a settlement with Commission Staff regarding the issue (click here for prior story)

"Mr. Mark Angell is the sole managing member of EBC Energy Today," Staff alleged. "Prior to forming EBC Energy Today, Mr. Angell was a principal and Executive Vice President of the REP Abacus Resources Energy, LLC (Abacus). In Docket No. 39192, the Commission revoked Abacus' certificate after Abacus suffered a POLR event and failed to refund customer deposits in the amount of $529,225. EBC Energy Today's arrangement with Prier provided Mr. Angell the opportunity to own 100% of a REP by bypassing the Commission's approval process," Staff alleged.

"At the time that EBC Energy Today entered into the agreement with Prier, Prier was serving customers under the d/b/a General Power & Light. The [Prier] d/b/a Today's Energy was not conducting business. EBC Energy Today and Prier entered into an agreement to 'lease' the DUNS +4 number for Prier's d/b/a Today's Energy. The DUNS +4 number is a unique identifier used by ERCOT to identify the market participant in the ERCOT system. In effect, this 'lease' arrangement meant that Prier was transferring control of its d/b/a Today's Energy to EBC Energy Today. With that transfer of control, EBC Energy Today had the ability to interface with ERCOT, as well as access to the Commission certification of Prier that was attached to that d/b/a. Neither the Commission nor ERCOT was ever made aware of this arrangement. In fact, affirmative steps were taken by both parties to ensure that the Commission and ERCOT did not find out," Staff alleged.

"When ERCOT and/or the Commission communicated concerns or inquiries to Today's Energy, Prier would forward the concerns or inquiries to EBC Energy Today. EBC Energy Today would then provide the appropriate response to Prier, who in turn forwarded the information to ERCOT and/or the Commission as though they were the point of contact for Today's Energy. While Prier played a role in this deception, it was EBC Energy Today that performed the essential functions of a REP, including the purchase of power and sale of such power to the customers of the d/b/a Today's Energy. Clearly, this practice represents a substantial threat to the delivery of safe and reliable electricity in Texas because it allows an entity to act as a REP without meeting the requirements to obtain a certificate as required by statute and rule and without being registered by ERCOT as required by the ERCOT Protocols. Additionally, the customers of the d/b/a Today's Energy were completely unaware that they were being served by a clandestine entity that was neither certified by the Commission nor registered with ERCOT," Staff alleged.

"Furthermore, upon the termination of the agreement with Prier, EBC Energy Today transferred approximately 2,015 customers from the d/b/a Today's Energy to another, unaffiliated REP. EBC Energy Today transferred these customers without the permission of the customers involved," Staff alleged.

Though not cited by name in Staff's report, the REP acquiring the Today's Energy customers was previously identified as Summer Energy (click for story). "Staff investigated this unaffiliated REP and does not believe that the REP purchasing the customers violated any Commission rules at this time," Staff said.

As to specific violations, Staff alleged that, "EBC Energy Today purchased and sold electricity to its customers without obtaining a certificate from the Commission in violation of PURA § 39.352 and P.U.C. SUBST. R. 25.107(a)(1). Furthermore, EBC Energy Today failed to register as a load serving entity with ERCOT in violation of ERCOT Protocol § 16.3."

Staff also alleged that EBC Energy Today, "'provid[ed] false or misleading information to the commission,' and ERCOT, thereby violating P.U.C. SUBST. R. 25.107(j)(1) and 25.107(j)(2)."

Docket 41106