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Texas PUC Staff File Specific Alleged Instances Allegedly Showing Company Acted As Aggregator Without License

January 9, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Staff of the Public Utility Commission of Texas have filed a supplemental response in their complaint against Current Utilities, Inc., in which Staff lists three specific instances in which Staff allege Current Utilities' activity amounted to aggregation, per the definition previously set forth by an ALJ.

As previously reported, PUC Staff had previously filed a Notice of Violation against Current Utilities, alleging that Current Utilities meets the definition of aggregator and operated as such without a certificate.

Current Utilities argues that it does not combine customers into a "single purchasing unit", and only arranges for customers to purchase electricity as individual customers, and is therefore not an aggregator.

The dispute only involves a question of law regarding how to properly interpret the phrase, "single purchasing unit," as used in the definition of an aggregator

In ruling on request for summary disposition, an ALJ addressed the question of what constitutes aggregation, but ordered supplemental proceedings due to a lack of specific evidence concerning Current Utilities' actions to inform a conclusion of whether such actions meet the definition of aggregator (see details here)

Regarding the definition, the ALJ had found that, "Contrary to Staff's assertions, the ALJ concludes that a single purchasing unit under the law will require that the represented members of the unit generally receive the same terms and benefits of any agreements reached on behalf of the unit. Thus, if Current is negotiating on behalf of its represented clients as single unit [sic], then each of those clients will essentially receive the 'same deal' from the negotiations made on behalf of the unit, even if the clients have individual contracts and are not billed as [a] single unit. But, if Current is simply using its right to negotiate on behalf of a large number of clients as leverage to negotiate better individualized deals for each of those clients, then this would not likely be considered a single purchasing unit," the ALJ said

"[T]he ALJ disagrees with Staff that the mere negotiation on behalf of a large group of customers means that those customers are a single purchasing unit. On the other hand, the ALJ does not believe that a single bill or joint liability is necessary for the group of customers to be a single purchasing unit. They can still have individual contracts. The key determining factor is the extent to which those contracts reflect similar terms for the represented group of clients. This is a factual issue that must be addressed in more detail by the parties," the ALJ had said

In respect to the directive noted above, Staff filed a supplemental response alleging specific instances where Current Utilities is allegedly negotiating on behalf of its represented clients as a single unit

Commission Staff submitted three examples of behavior which Staff alleges shows Current Utilities acted as an aggregator

In one example, Staff alleged that in accordance with an aggregation agreement with a REP, "Current Utilities negotiated the purchase of electricity on behalf of a single purchasing unit when it renewed the contract of 491 of its customers resulting in all 491 customers being placed on an identical plan for 36 months."

"Under either interpretation of what constitutes a single purchasing unit, the customers in each single purchasing unit received identical terms and benefits from the REP. There is no evidence that Current Utilities negotiated an individual plan with unique provisions for each of the 491 customers," Staff alleged

Staff alleged that all customers were placed on a specific REP plan at the same electric rate and for the same contract period.

In another instance, Staff alleged that Current Utilities did not individually negotiate each of 283 customer contracts that were placed with a new REP, with Current Utilities requiring that the new REP serve the customers at the same contract terms as the old REP. "Instead, it negotiated the purchase of electricity for the entire group of customers at one time by getting [the new REP, name redacted] to agree to serve the customers on their pre-existing contracts from a different REP," Staff alleged

"Current Utilities negotiated a uniform, material benefit that was applicable to all 283 customers that it switched to [the new REP], thus forming a single purchasing unit," Staff alleged

"Without the assistance of Current Utilities and its large customer base, it is unlikely that an individual customer could contact [the new REP] and get [the new REP] to honor the contract terms of a completely different REP," Staff alleged

"Thus, these 283 customers were a single purchasing unit," Staff alleged

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