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Texas Retail Provider Reaches $1.5 Million Settlement With PUC Staff
Several NRG Energy retail electric providers would collectively pay a $900,000 civil penalty, and make a $600,000 contribution to their bill payment assistance program, under a settlement with Staff of the Public Utility Commission of Texas to resolve alleged violations of 16 Tex. Admin. Code § 25.480 (TAC), related to removal of switch-holds.
According to the settlement, in June of 2014, the PUC's Oversight and Enforcement (O&E) Staff opened an investigation of Green Mountain Energy Company (GMEC) as a result of an increase in the number of customer complaints relating to switch-holds and other billing issues related to GMEC's conversion to a new billing system.
According to the settlement, in the course of the investigation, GMEC stated that during a portion of the requested time period, it employed a policy of waiting ten business days after the customer's final deferred payment plan (DPP) payment posted to the customer's account before requesting the TDU to remove the switch hold. On May 24, 2014, GMEC reduced this waiting period to five business days after payment posted to the customer's account. According to the settlement, GMEC asserts that it employed these waiting periods as a safeguard against a customer's payment being returned or otherwise dishonored
On October 28, 2014, Enforcement Staff sent informal RFIs to Reliant Energy Retail Services, LLC (Reliant), Everything Energy, LLC (EE), and U.S. Retailers, LLC (US Retailers) concerning switch-holds. According to the settlement, these REPs used a similar policy in removing switch-holds as that described above for GMEC.
According to the settlement, Enforcement Staff's review determined that for 7,902 of these switch-holds, the NRG retail companies waited at least two business days to send a market transaction to request release of a switch-hold after payment posted to the customer's account. The NRG retail companies waited at least ten business days to send the market transaction for 4,264 of these switch-holds, or 53.97% of the 7,902 switch-holds, the settlement states.
16 TAC § 25.480(m) requires that the REP request removal of the switch-hold by the TDU, "after the customer's obligation to the REP relating to the switch-hold is satisfied."
16 TAC § 25.480(j)(8) provides that a REP, "shall submit a request to remove the switch-hold, pursuant to subsection (m) of this section, after the customer's payment of the deferred balance owed to the REP."
16 TAC §25.480(j)(5)(B) requires a REP to inform the customer that, "The switch-hold will be removed after your final payment on this past due amount is processed."
16 TAC §25.480(h)(7) requires the REP to inform the customer that a switch-hold, "...will be removed after your deferred balance is paid and processed."
Enforcement Staff alleges these 7,902 switch-holds across all four NRG retail companies were violations of 16 TAC §§ 25.480(m) and (j)(8).
According to the settlement, the NRG retail companies assert that Commission rules do not establish a specific time frame within which REPs must request the TDU to release switch holds; that the date a payment obligation is "satisfied" is not a clear standard and is subject to interpretation; that their waiting periods were intended to allow enough time to pass to presume customer payments would not be dishonored; that of the customers for whom the companies provided switch-hold data to Enforcement Staff, approximately 4% switched away from the companies within 90 days after release of the switch-holds; and that approximately 78% of these switching customers left the companies with an unpaid balance. Based on these factors the companies assert that they did not violate §25.480(m).
Commission Staff asserts that NRG retail companies did not attempt to determine when a customer's obligation was satisfied. Instead, the companies used a blanket five- or ten-day waiting period. Commission Staff asserts that application of this policy resulted in the majority of customers remaining on a switch-hold for multiple days, beyond their satisfaction of the DPP. Commission Staff asserts that Companies did not remove switch-holds when payments may have been processed before the waiting period lapsed, particularly if the customer paid with cash. Commission Staff also asserts that the small number of customers who ultimately switched away have no bearing as to the companies' failure to request release of switch-holds when a customer's obligation is satisfied.
According to the settlement, the NRG retail companies warranted that they have eliminated their waiting period and now process the switch-hold on the same day a customer's final DPP payment posts to the customer's account.
Concerning the additional $600,000 contribution to be made by the NRG retail companies to their bill payment assistance programs under the settlement, the settlement noted that they collectively provided approximately $656,000 in bill payment assistance in 2015, and that the NRG retail companies agree to provide a minimum of $1,256,000 in bill payment assistance in 2016.
The settlement would resolve all claims pursuant to PURA § 39.101(b) and 16 TAC § 25.480 concerning the NRG retail companies' request for removal of switch-holds for the time period between June 1, 2013 and the date the agreement is executed (November 18, 2016).
David Knox, spokesperson for NRG, provided the following statement to EnergyChoiceMatters.com:
"We stand for and go above and beyond what is required to help customers with bill pay assistance. We also stand for complying with all rules and regulations that govern our business. The settlement agreement that has been filed outlines the details we have agreed upon and we look forward to this issue being resolved."
The settlement was specifically among PUC Enforcement Staff and Reliant Energy Retail Services, LLC, Green Mountain Energy Company, Everything Energy, LLC, and U.S. Retailers, LLC
The settlement remains subject to PUC approval.
Docket 46597
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Texas PUC Staff, Retail Provider Have Different Interpretations For Date On Which Switch-Holds Must Be Removed Under Rule
November 21, 2016
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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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