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Texas REP to Pay $400,000, Sell Company Under Settlement with PUCT Staff
Proton Energy, Inc. would pay an administrative penalty of $400,000, and undergo a change in control, to resolve an investigation by Staff of the Public Utility Commission of Texas into a series of alleged violations of the customer protection rules.
The settlement provides that on or before July 1, 2014, Proton and an unrelated third-party entity ("New Company") will file an Application to amend Proton's REP Certificate (No. 10191) to reflect a change in control and ownership in order to change ownership and control of Proton from Mr. Ramzan Ali to new ownership.
The settlement provides that Ramzan Ali will not be employed by, hold any type of ownership interest in, or exercise control in any other way over New Company. Furthermore, under the stipulation, Mr. Ramzan Ali will not participate in any market regulated by the Commission for a period of five years from the date of the Commission's order approving the stipulation.
If New Company for any reason fails to file the application for change of ownership on or before July 1, 2014, the settlement provides Staff with the ability to enter a stipulated Consent Order revoking Proton's REP Certificate.
Among the violations acknowledged by Proton under the settlement are:
• P.U.C. SUBST. R. 25.107(f)(2), relating to protection of customer deposits and advance payments, requires REPs to provide an irrevocable standby letter of credit payable to the Commission in an amount sufficient to cover 100% of the REP's outstanding customer deposits. The settlement states that Proton acknowledges that it did not always maintain its irrevocable standby letter of credit in an amount sufficient to cover 100% of its outstanding customer deposits.
• P.U.C. SUBST. R. 25.483(j), relating to disconnection of service, prohibits a REP from authorizing disconnection of service for non-payment during an extreme weather emergency. Staff asserted that Proton requested the disconnection of customers during extreme weather emergencies, although no customers were actually disconnected by the Transmission & Distribution Utilities (TDUs) during these times. Under the settlement, Proton acknowledges that its vendor requested disconnection of customers for non-payment during extreme weather emergencies.
The settlement also resolves a series of additional alleged violations which Proton does not specifically acknowledge. Among other things, Staff alleged violations of:
• P.U.C. SUBST. R. 25.480(l), relating to switch-holds, prohibits REPs from imposing switch-holds unless the customer has entered into either a deferred payment plan or a levelized billing plan consistent with the rules. Proton acknowledges that due to a computer programming error switch-holds were inadvertently placed on some customer accounts, thereby improperly preventing some customers from legitimately switching to other REPs. Staff alleged that some of the switch-holds placed by Proton were not due to computer programming error.
• P.U.C. SUBST. R. 25.474(n), relating to fees, prohibits a REP from charging a fee to an applicant to switch to, select, or enroll with the REP unless the applicant does not have a provisioned advanced meter and requests an out-of-cycle meter read for the purpose of a self-selected switch. Staff alleged that Proton's agent, Energy Broker Consultants (EBC), charged applicants a fee to switch to, select, or enroll with Proton. Proton acknowledged that Energy Broker Consultants charged a fee to EBC applicants, but denied that an agency relationship existed. Proton asserted that Energy Broker Consultants was a PUC-registered aggregator at the time it was soliciting customers.
• P.U.C. SUBST. R. 25.107(j), relating to REP suspension and revocation, prohibits a REP from providing false or misleading information to the Commission. Staff alleged that Proton knowingly provided information to the Commission in response to Requests for Information (RFIs) during the course of the proceeding regarding the number of switch-holds placed on customer accounts that did not accurately reflect the number of customers on switch-holds. Proton denies Staff's allegation that it knowingly provided false information, but conceded that the information provided to Staff was inaccurate.
• Staff alleged that at the time of Enforcement's initial investigation in May 2012, a number of Proton's contract documents, bills, and its website did not fully comply with applicable Commission substantive rules found in P.U.C. SUBST. R. 25.474, 25.475, and 25.479.
The settlement remains subject to Commission approval
Docket 41848
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