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Regulator Seeking Civil Penalty Against Retail Supplier Over Alleged Failure To Seek Approval For License Transfer

May 10, 2017

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

The Connecticut PURA has issued a Notice of Violation and Assessment of Civil Penalty against Perigee Energy, LLC, in the amount of $2,000, relating to Perigee's alleged failure to receive pre-approval for a license "transfer", and the deadline for notifying PURA of a change in corporate structure

Perigee has the right to a hearing to contest the NOV.

According to the NOV, on March 2, 2017, Perigee informed the Authority that on February 3, 2017, National Gas & Electric, LLC acquired 100% of the membership interests of Perigee and implemented a change of control of the ownership of the company. Subsequently, on March 23, 2017, Perigee informed the Authority that the COMPANY would undergo another change of control on April 1, 2017, in which Spark Energy, Inc. and its subsidiaries would acquire 100% of the membership interest in Perigee. Subsequently, on April 6, 2017, the Authority sent correspondence to seek additional information in response to Perigee’s letters.

As stated in the NOV, "Perigee answered the inquiry and admitted that it did not timely notify the Authority of the change of control, but denied that it amounted to a transfer of license."

Conn. Gen. Stat. §16-245(i) requires each licensed electric supplier to, "notify the Authority at least ten days before: (1) A change in corporate structure that affects the licensee . . . ."

According to the NOV, "Perigee notified the Authority of the first change in corporate structure nearly one month after the change took effect. Therefore, Perigee violated Conn. Gen. Stat. §16-245(i)."

Conn. Gen. Stat. §16-245(j) provides, in relevant part that, "No license may be transferred without the prior approval of the Authority."

The NOV states that, "Based on the information provided by Perigee, the change of control amounts to a transfer of license. The Authority has previously determined that the sale of 100% of the stock of an electric supplier constitutes a transfer of license. Decision dated July 9, 2014, in Docket No. 12-06-20RE01, Application of Aequitas Energy for an Electric Supplier License – Transfer of License. Contrary to Perigee’s claim, Spark Energy’s acquisition of Perigee is more than a mere change of control, since Perigee is now effectively run by staff from Spark Energy. In addition, at least a part of Perigee’s management team and corporate officers have been replaced with those from Spark Energy. These changes ultimately affect the managerial, technical, and financial capabilities of Perigee and effectively amounts to a transfer of license. Accordingly, the Authority believes Perigee violated Conn. Gen. Stat. §16-245(j)."

The NOV seeks to impose on Perigee an aggregate civil penalty in the amount of $2,000 determined as follows:

• One thousand dollars for what the NOV finds to be failure to comply with Conn. Gen. Stat. §16-245(i).

• One thousand dollars for what the NOV finds to be failure to comply with Conn. Gen. Stat. §16-245(j).

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