Updated With Statement From REP

Texas Retail Provider To Pay $700,000 Under Settlement With PUC Staff

June 27, 2019

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Reporting by Paul Ring • ring@energychoicematters.com

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Update: 7:10 pm, June 27:

Just Energy issued the following statement from Brent Moore, President of Just Energy North America, concerning the settlement.

"We are pleased to have reached an agreement with the PUC to resolve any outstanding questions regarding the administration of the legacy low-income customer discount program and switch-holds. Today, Just Energy, Amigo Energy and Tara Energy continue voluntary programs above and beyond rule requirements to help customers with bill pay assistance. The low-income discount issue pertains to a one month issue dating back to September 2013 regarding a program that was previously established by statute and is now obsolete. The companies took action to ensure that all customer accounts were credited with the full discount as soon as they discovered the issues. On switch-hold, an issue was discovered in the prior manual process for lifting the switch-hold after payment of the original deferral amount. We are not aware of any instance in which a customer requested a switch that was improperly held because of any switch-hold.  Every customer experience is important to us, and we are pleased the matter is now behind us.  The settlement agreement outlines the details upon which we have agreed to bring final resolution to this administrative matter." -- Brent Moore, President of Just Energy North America

Earlier:

Just Energy Texas, L.P. d/b/a Just Energy (Just Energy), Fulcrum Retail Energy, LLC d/b/a Amigo Energy (Amigo Energy), and Tara Energy, LLC (Tara Energy) (collectively Just Energy Affiliates) would pay $700,000 under a settlement agreement with Staff of the Public Utility Commission of Texas to resolve Commission Staff's investigation of the Just Energy Affiliates' removal of switch-holds and administration of the low-income discount program, for alleged violations of 16 Texas Administrative Code (TAC) § 25.480 relating to Bill Payment and Adjustments; and former 16 TAC §25.454, relating to the Rate Reduction Program.

The $700,000 includes $475,000 in administrative penalties and $225,000 to be paid to customer assistance in bill payment assistance programs.

Under 16 TAC § 25.480, a REP is allowed to request that a transmission and distribution utility create a switch-hold under certain conditions for a customer that enters into a deferred payment plan (DPP) with the REP.

Under 16 TAC § 25.480(j)(8), 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."

Under 16 TAC § 25.480(m)(2), the REP is responsible for requesting that the TDU remove the switch-hold "after the customer's obligation to the REP related to the switch-hold is satisfied."

The settlement states, "Commission Staff sent informal requests for information to the Just Energy Affiliates requesting switch-hold data for the period beginning January 1, 2014 and ending December 31, 2014. Just Energy Affiliates responses included data regarding switch-holds that were released during that year, the date the customer provided payment sufficient to satisfy the original DPP, and the date a market transaction was sent to release the switch-hold."

The settlement states, "Just Energy Affiliates' responses identified accounts for which there was in excess of one business day between the date the switch-hold was removed and the date the customer provided payment sufficient to satisfy the original DPP."

The settlement states, "Based on its analysis of the RFI responses, Commission Staff alleges that the Just Energy Affiliates did not timely initiate a transaction to request release of 253 switch-holds, as follows: a. Just Energy did not timely initiate a transaction to request release of 185 switch-holds; b. Amigo Energy did not timely initiate a transaction to request release of 44 switch-holds; and c. Tara Energy did not timely initiate a transaction to request release of 24 switch-holds."

The settlement states, "Just Energy Affiliates assert that they voluntarily released all pending DPP switch-holds in early 2015 and assert that they did not initiate any new switch-holds during the pendency of Commission Staff's investigation."

The settlement states, "Just Energy Affiliates assert that no customer complained about the timing of the removal of their switch-hold and assert that no customer had a switch request that was rejected due to the untimely removal of a switch-hold."

Under 16 TAC § 25.454(e)(3), as part of the System Benefit Fund (SBF), all REPs were required to provide the low-income rate reduction to eligible low-income customers. The discount factors posted on the Commission's website were used to calculate the rate reduction for each eligible low-income customer's bill. If the discount factor changes for any area, REPs were required to implement the resulting change in the discount factor in their billings to customers within 30 calendar days of the date the Commission posted the revised discount factor to its website, or on the effective date of the discount factor, whichever was later. Under former 16 TAC §25.454(e)(3), this rate reduction was required to be calculated "by multiplying the customer's total consumption (kWh) for the billing period by the discount factor (in cents/kWh) in effect during the billing cycle in which the bill is rendered."

The Texas Legislature discontinued funding for the SBF, effective September 1, 2013, and directed the Commission to reduce the SBF balance to zero by September 1, 2017.

As approved by Order of the Commission in Project No. 28073, dated July 19, 2013 and effective September 1, 2013, the low-income discount rate associated with the SBF was increased from approximately 2.4 cents per kWh to approximately 12 cents per kWh. This discount rate remained in effect until September 1, 2014 for the months of September 2013 and May through August 2014.

The settlement states, "For those customers whose billing cycle ended in August 2013, and for whom bills were mailed in September 2013, the Just Energy Affiliates instructed their billing vendor to apply the discount consistent with the discount rate for September 2013. This was a change in methodology of applying the low-income discount for the Just Energy Affiliates.*** However, the Just Energy Affiliates billing vendor initially applied the August 2013 discount rate to these customers."

*** Concerning the referenced change in methodology of applying the low-income discount for the Just Energy Affiliates, the settlement states, "This change occurred because, on February 9, 2012, the Commission's Program Administrator for the SBF sent out a memorandum to all REPs addressing several aspects of the low-income discount program administration with the stated intent of 'clarifying the inconsistencies and to let REPs know what the PUCT is expecting.' This Staff memo included a discussion of that the discount factor to apply to a bill is the one in effect during the bill cycle in which the bill is rendered. To that end, it provided that following example: 'If a bill is rendered on May 20, this is the discount for May and the rate reduction should be applied to all kWh consumed on the bill. If the bill goes out on May first, that is the May discount given and reported.['] The Just Energy Affiliates received this memo. In a subsequent email dated July 2013 from the Commission's Program Administrator for the SBF, there was further clarification that the bill mailing date should be considered the bill rendered date, based on this email, the Just Energy Affiliates implemented the change."

The settlement states, "Commission Staff asserts that the Just Energy Affiliates did not initially apply the September low-income discount factors to customers whose billing cycle ended August 2013, but whose bills were not mailed until September, which affected 3,602 customers, as follows: a. Just Energy: 2,844 customers; b. Amigo Energy: 736 customers; c. Tara Energy: 22 customers."

The settlement states, "Of these 3,602 customers, Commission Staff asserts that at least 40 customers were disconnected for nonpayment over balances that would not have been owed if the Just Energy Affiliates had applied the September 2013 low-income discount factors, broken down as follows: a. Just Energy: 15 customers; b. Amigo Energy: 10 customers; c. Tara Energy: 15 customers."

The settlement states, "The Just Energy Affiliates assert that either method of applying the low-income discount was in compliance with the Commission's rules; however, they agree Staff had stated a preference for using the discount factor associated with the bill mailing date, and the companies were working to implement a system change to follow Staff's preference in September 2013. This was also the method the companies used throughout the remainder of the discount program until its expiration."

The settlement states, "The Just Energy Affiliates requested and received reimbursement from the SBF at the higher discount rate in effect on and after September 1, 2013 for all bills mailed in September 2013."

The settlement states, "The Just Energy Affiliates assert that they initiated action and applied the remainder of the discount reflecting the difference between the August and September low-income discount rates to each of the affected customer accounts by February of 2014."

Concerning the additional $225,000 the Just Energy Affiliates will provide to their bill payment assistance programs under the settlement, the settlement states, "The Just Energy Affiliates agree to provide a prominent disclaimer on any marketing, advertising, or promotion of any payments to bill payment assistance programs supported by the payments made consistent with a final order in this docket that such payments were made pursuant to an order of the Commission. This disclaimer will provide the docket number where the order may be found."

The settlement states, "The Just Energy Affiliates warrant that they will provide the bill payment assistance funds consistent with a final order in this docket in bill payment assistance funds above what they paid in 2018. The Just Energy Affiliates agree that any entity to which they provide bill payment assistance payments will be an independent customer assistance organization that provides bill payment support, and that the funding will go toward the payment of electric bills in Texas for residential customers in need of payment support."

As part of this settlement, Just Energy Affiliates agree to comply with the switch-hold removal process under 16 TAC § 25.480 before reinstituting switch-holds on DPPs.

Docket 49688

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