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Texas Approves Settlement Under Which Retail Provider Must Sell Business
With some hesitation, the Public Utility Commission of Texas on Friday adopted a settlement between Proton Energy, Inc. and PUCT Staff to resolve an investigation into a series of alleged violations of the customer protection rules.
Under the settlement, Proton Energy, Inc. will pay an administrative penalty of $400,000, and must undergo a change in control.
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
All three Commissioners debated whether to approve the settlement, or whether the Commission should have pursued litigation for even harsher provisions.
Chairman Donna Nelson called the alleged unauthorized switch holds placed on customers by Proton (click here for specifics on the allegations) "very egregious" and "unconscionable".
However, Commissioners ultimately approved the settlement because of the ban on Ali's market participation, and questions regarding whether such a ban could be accomplished outside of a settlement. Commissioners also noted that various provisions of the settlement will (or should) avoid any uplift associated with a potential exit from the market from Proton, should a new owner not be found.
With respect to the ban, Staff and Commissioners Kenneth Anderson stressed that it was not clear that a ban could be achieved in the context of the specific enforcement proceeding if the case had been fully litigated. Anderson noted that in enforcement proceedings, PURA delineates specific remedies available to the Commission, and while certificate revocation is available, including a ban in an order arising from a litigated proceeding might run afoul of PURA.
Chairman Donna Nelson felt that the Commission has authority to grant such a ban, but suggested that the issue be included in the next Scope of Competition report, so clarity can be granted by the legislature on the issue.
Docket: 41848
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June 23, 2014
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Copyright 2010-14 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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