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Texas Retail Provider To Pay $50,000 Under Switch-Hold Settlement With Texas PUC Staff

August 20, 2018

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Reporting by Paul Ring • ring@energychoicematters.com

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Source Power and Gas LLC would pay $50,000 under a settlement with Staff of the Public Utility Commission of Texas to resolve alleged violations of 16 Texas Administrative Code (TAC) § 25.480(m) and (j)(8), concerning switch-holds and deferred payment plans.

The settlement states that in 91 instances during 2014 in which Source warrants that it entered into "deferred payment plans" with customers, "Source and the customer entered an agreement requiring each customer to pay the outstanding bill after its due date, but before the due date of the next bill."

16 TAC § 25.480(j) defines a deferred payment plan as an agreement between the REP and a customer that allows a customer to pay an outstanding balance in installments that extend beyond the due date of the current bill.

16 TAC § 25.480(i) defines a payment arrangement as any agreement between the REP and a customer that allows a customer to pay the outstanding bill after its due date, but before the due date of the next bill.

The PUC's Oversight and Enforcement Division (O&E) considers the "deferred payment plans" between Source and its customers to be payment arrangements and not deferred payment plans.

16 TAC § 25.480(l)(1) allows a REP to place a switch-hold if a customer voluntarily enters into a deferred payment plan. Commission rules do not allow a switch-hold to be placed for a payment arrangement.

The settlement states, "Source placed 91 switch-holds on accounts that entered into these payment arrangements, in violation of Commission rules."

16 TAC § 25.480(j)(2)(B) requires a REP, during the months of July, August, and September, to make available a deferred payment plan with the initial payment amount no greater than 50% of the amount due. The deferred amount shall be paid by the customer in equal installments over at least five billing cycles, unless the customer agrees to fewer installments.

The settlement states, "During the months of July, August, and September, Source entered into 34 payment arrangements with customers, but did not offer the customers a deferred payment plan option with an initial payment of up to 50% of the amount due and the remaining balance to be paid over at least five billing cycles."

The settlement states, "Therefore, Source committed 34 violations of 16 TAC § 25.480(j)(2)(B) because it failed to offer deferred payment plans in the required form during July, August, and September of 2014."

The settlement states, "Data that Commission Staff obtained from Source shows that Source did not timely initiate transactions to release 71 switch-holds after each customer's obligation to the REP related to the switch-hold was satisfied."

The settlement states, "Data provided by Source shows that the 71 switch-holds remained in place for a total of 514 consecutive business days (average of more than seven days per switch-hold) after the customer's obligation to the REP related to the switch-hold was satisfied.

The settlement states, "O&E asserts these 71 switch-holds were violations of 16 TAC § 25.480(j)(8) and (m)."

Source asserts that its failure to timely release switch-holds was due to a system error that was discovered and corrected through a Source internal audit in September 2015, prior to notice of O&E's April 2016 investigation.

The settlement notes that, as previously reported, Source transferred all of its Texas residential customers to a different REP in 2017. Source does not currently serve any residential customers.

Docket 48608

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