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Former Texas REP: Texas PUC Lacks Authority To Impose Fine On Company After Certificate Was Revoked

April 28, 2017

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

TruSmart Energy, whose retail electric provider certificate was previously revoked by the Public Utility Commission of Texas, said in a motion for summary dismissal that the PUCT lacks authority to impose a civil penalty on the company related to its compliance obligations as a REP, now that the company no longer has a REP certificate and is therefore no longer subject to PUCT jurisdiction.

On June 22, 2016 Staff of the Public Utilities Commission of Texas (Commission Staff) filed a notice of Violation against TruSmart Energy (TruSmart) in Docket #46093. In such NOV, the PUC's Oversight and Enforcement Division (O&E) had recommended a $1.75 million administrative penalty against TruSmart Energy, LLC for what O&E alleged is TruSmart's failure to comply with PURA § 39.352 and TAC §§ 25.107(j)(7), 25.107(j)(16), 25.214(c) and 25.214(d), arising from TruSmart's prior default under the TDU delivery tariffs

"However, at the time of the June 22, 2016 filing TruSmart Energy Retail Energy Provider Certificate No. 10130 had been previously revoked by the Public Utilities Commission of Texas (PUCT). The violations which resulted in revocation of TruSmart Energy Certificate was failure to comply with TAC Sections 25.107(j)(7), 25.107(j)(16), and 25.214(d). The Order issued in Docket No. 45749 to revoke the Certificate was signed by the Commissioners on June 13th, 2016 and was previously consented at the PUCT open meeting on June 9, 2016," TruSmart Energy said

"The Notice of Violation in Docket No. 46093 alleges failure to comply with Public Utility Regulatory Act (PURA) Sections 39.352 and TAC Sections 25.107(j)(7), 25.107(j)(16), 25.214(c) and 25.214(d). All these alleged violations stem from TruSmart inability to pay the TDSP fees in accordance with the TDSP delivery tariff prior to the 10 day default following the due date. The date of first TDSP default with Oncor was February 26, 2016 in the amount of $19,700.49. The date of the first default with Centerpoint ($36,349.65), AEP-Central ($7,544.07), AEP-West ($2,495.00) and TNMP ($7,342.00) was February 29, in the approximate aggregate amount of $53,761.73," TruSmart Energy said

"In Order No. 45749, the Commission found TruSmart had violated TAC Sections 25.107(j)(7) and 25.107(j)(16) because TruSmart failed to pay the amounts it owed TDUs within 35 calendar days of the transmittal of the invoice and within the 10 day grace period. 25.214.(c) and 25.214.(d) pertain the terms and conditions associated with Retail Delivery Service under which TruSmart operated prior to its February 26, 2016 default. TruSmart Energy did not dispute these facts in Docket No. 45749 and its Certificate No. 10130 was revoked," TruSmart Energy said

"Commission Staff alleges the same facts a second time in Docket No. 46093. However, as the time of the second NOV allegation, TruSmart Energy was no longer regulated by the Public Utility Commission of Texas since its certification No. 10130 had already been revoked. If the commission staff had desired a fine in accordance with the TDSP default, this should have been raised within Docket and Order issued in the Docket No. 45749," TruSmart Energy said

"The second NOV in Docket No. 46093 represents an instance of res judicata and collateral estoppel against TruSmart Energy. Trusmart Energy is no longer an operating entity or regulated by the PUCT. Furthermore, TruSmart Energy was not an operating entity or regulated by the PUCT at the time of the filing associated with Docket No. 46093. TruSmart Energy respectfully requests State Office of Administrative Hearing (SOAH) to dismiss the NOV and the proposed fine as it is no longer under the jurisdiction of the PUCT and the issues alleged in the NOV were resolved in Docket No. 45749," TruSmart Energy said

"TruSmart Energy has further fully cooperated with Commission Staff with respect to the facts associated with the alleged violations. The facts of the case are not in dispute with respect to TDSP default. However, at the time of the default TruSmart was operating as "creditor in possession" as all revenues flowed into a secured lockbox account. Although TruSmart Energy has sufficient funds in its secured lockbox to pay the TDSP invoices at the time of the TDSP default; TruSmart Energy’s Lender took possession of all such revenues, failed to act in a reasonable manner under its loan and supply agreements and would not authorize payment of TDSP invoices. The Lender foreclosure strategy resulted in TDSP default and resultant TruSmart Energy Certificate revocation," TruSmart Energy said

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