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Texas REP to Pay $60,000 to Settle Alleged Violations Resulting from Differing Interpretation of Rules
Young Energy, LLC d/b/a Payless Power would pay $60,000 under a settlement with Staff of the Public Utility Commission of Texas to resolve alleged violations of the deferred payment plan rules, which result from differing interpretations held by Staff and the company concerning the rules.
According to the settlement, the parties stipulate to the following facts:
a. Approximately 50 customers were on a prepaid product with Young at various times between July 2012 and December 2013.
b. These Customers agreed to enroll in a valid deferred payment plan (DPP) with Young for a negative current balance after expressing an inability to pay.
c. Young placed the customers on a switch-hold pursuant to the terms of the DPP;
d. The customers then incurred a second negative current balance and Young did not exercise its right to disconnect the customers.
e. Thereafter, the customers requested to pay off the remaining balance of their DPP to have the switch-hold removed (while still having a negative current balance).
f. Prior to December 2013, pursuant to Young's own interpretation of Commission rules and its interpretation of generally accepted accounting principles, Young applied up to 100% of any such payment (i.e. payment of remaining balance of DPP) first to the customers' most recent negative current balance, and only then to the customers' original DPP balance, as the customer requested. If the customers' payment was not enough to cover both the negative current balance and the remaining DPP balance, then the customers remained on the DPP and subject to the switch-hold.
g. The terms of the DPP that Young sent to customers did not contain the requirement limiting allocation of a payment to a DPP to 50% of such payment.
Commission Staff contends that pursuant to P.U.C. SUBST. R. 25.498(i), a REP cannot allocate 100% of a prepaid payment to pay off a customer's negative current balance if that customer also has a DPP with a remaining balance and the customer requests to pay off the DPP instead. According to Staff, the customer has a right to repay a DPP early and a REP can only limit the allocation of a payment toward repayment of a DPP to 50% of that payment.
Commission Staff further contends that a REP cannot hold a customer on a switch-hold to recover a negative current balance that has not been incorporated in a DPP. A switch-hold is tied directly to a deferred balance memorialized in a DPP. The switch-hold must be removed as soon as the deferred balance is paid off, according to Staff.
Commission Staff contends that the REP has the following options in the specific scenario addressed above. The REP may:
a. Disconnect a customer if that customer's account balance falls below the disconnection balance; or
b. Enter into a new DPP with the customer if that customer expresses an inability to pay the new negative current balance and affirmatively agrees to the new DPP.
Young has contended that P.U.C. SUBST. R. 25.498(i) does not prohibit a REP from requiring payment of a negative current balance prior to allowing a customer to pay off the balance of a DPP and having a switch-hold removed.
According to the settlement, Young immediately and voluntarily changed its customer repayment policy at issue after its initial discussion with Commission Staff about the investigation.
The settlement also states that Young failed to inform customers that entered into a DPP with Young of the customer's right to pay off the DPP in five monthly installments, as required by P.U.C. SUBST. R. 25.498(i)(6)(B. Young instead required the customer to enter into a DPP that involved weekly installment payments spread out over 22 weeks.
The settlement also states that Young's DPPs failed to state that a customer was subject to disconnection if the customer's current balance fell below the disconnection balance, as required by P.U.C. SUBST. R. 25.498(i)(9)(G)
Docket 44368
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January 27, 2015
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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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