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Newly Filed Complaint Against Texas REP Seeks Refund of GRT Charges -- From 10 Years Ago

March 25, 2015

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Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Victoria County has newly filed a formal complaint with the Public Utility Commission of Texas seeking a refund of certain charges levied by its then-retail electric provider, which were originally billed from September 2005 through February 2007 (Docket 44562).

A third-party billing auditor retained by Victoria County in 2014 alleges that it found that 36 of Victoria County's electric service locations were located outside of city boundaries and erroneously charged Gross Receipts Tax (GRT) during the 2005-07 period, when the accounts took service from Sempra Energy Solutions, whose accounts were later assumed by Noble Americas Energy Solutions

Victoria County is seeking a total refund of $5,200, including interest.

In a response represented to be from Noble Americas Energy Solutions included with Victoria County's complaint, Noble Americas Energy Solutions is represented to have said, "Victoria County's claim relates to a contract that ended over seven years ago. Noble Solutions believes Victoria County's claim is barred by laches, the equitable doctrine that applies when an unreasonable delay in bringing a claim disadvantages the other party. In this instance, if Victoria County had brought this claim to Noble Solutions' attention sooner and if Noble Solutions had determined that a refund was due, then Noble Solutions could have requested a refund of the GRT from the state. Because of Victoria County's delay in making this claim, the statute of limitations has run on Noble Solutions' ability to recover a refund from the state. Therefore, Victoria County's unreasonable delay in bringing this claim would disadvantage Noble Solutions."

The sought refund of decade-old charges due to an audit by a third-party audit provider immediately brings to mind a telecom case (or rather, a series of cases) addressed by the PUCT -- most notably, Docket 34332, a 2007 complaint filed by the Harris County Hospital District (HCHD) against Southwestern Bell Telephone, LP d/b/a AT&T Texas which sought refunds of late payment fees, dating back to 1995, which had been applied in contravention of the Prompt Payment Act.

Although the underlying billing issues and regulations are different given the nature of the industry, what we are reminded of is that in the PUCT's original order on the Harris County Hospital complaint, the Commission denied a full refund (limiting the refund period to six and a half years, rather than the full 13), given the length of time which had passed since the initial billing error, and Harris County Hospital District's status as a large, sophisticated customer.

In its initial order in Docket 34332 the PUCT said, "The Commission notes that the period of overbilling in this case, 1995 to 2008, is an extraordinarily long one, particularly when considering the nature of the complainant. HCHD is a large, sophisticated public entity with sufficient resources to have discovered and addressed this situation long before it brought this complaint to the Commission in 2007. It is in a better position than most other customers to discover the overbilling of late charges at issue in this case. Thus, the Commission finds it appropriate to hold HCHD partially responsible for the prolonged accrual of overcharges in this case."

In arguing the case on appeal, a court order represents that the Commission explained that it rendered its decision after the Commission, "determined that good cause existed to make a policy decision to encourage large, sophisticated entities to verify their phone bills more often than once every thirteen years."

However, a Court of Appeals later found this limitation of the refund period to be arbitrary given the relevant regulations regarding telecomm refunds, and remanded the case to the PUCT. We could not determine the disposition of the remanded case prior to publication deadline.

In addition to opposing the refund based on the doctrine of laches, documents represented to be from Noble indicate the company initially opposed the sought refund by stating that many of the meters covered by the complaint were not served by Noble's predecessor, and that it could not verify whether all of the accounts were not within city boundaries as claimed.

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