Texas Retail Provider Reaches Settlement Regarding Certificate Revocation; Number Of Customers Served In Month Prior To Book Sale Disclosed
June 23, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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Energy Monger, LLC has reached a settlement with Staff of the Public Utility Commission of Texas, the Electric Reliability Council of Texas, Inc. (ERCOT), and the Office of Public Utility Counsel (OPUC) concerning Staff's petition to revoke the REP certificate of Energy Monger
Under the settlement, the parties agree that Energy Monger's REP certificate number 10276 will be revoked by the Commission for Energy Monger's violations described in the settlement.
A statement from Energy Monger is below
The settlement states that, "On March 9, 2021, ERCOT sent Energy Monger a notice of material breach of its Standard Form Market Participant Agreement (SFA) for Energy Monger's failure to timely pay settlement invoices in the amount of $7,465,882.70 and to provide collateral in the amount of $6,560,679.98. ERCOT's notice established a deadline of March 10, 2021 for Energy Monger to cure the payment breach. Energy Monger did not cure its payment breach by the March 10, 2021
Under the settlement, PUC Staff will not seek any administrative penalties from Energy Monger for the violations addressed in the proceeding.
Under the settlement, Energy Monger agrees to withdraw its application for relinquishment of its REP certificate in Docket No. 51932.
The settlement noted that, as previously reported, "On March 11, 2021, Energy Monger sold its customer book to JP Energy Resources LLC dba Ampra Energy (Ampra Energy). Between March 15 and March 17, 2021, all Energy Monger customers were transferred to Ampra Energy."
The settlement noted that, as of February 1, 2021, Energy Monger had 3,093 customers.
Energy Monger provided the following statement concerning the matter:
"Energy Monger reached the settlement consistent with our commitment to customers and in the interest of putting this matter behind us.
"Energy Monger protected customers against ERCOT’s extremely volatile prices by selling fixed-term price products while hedging the forecasted load on 10 year norms using block and shaped hedges for the winter peak. Customers served by Energy Monger paid no additional amounts more than their contracted rate due to ERCOT’s $9,000/MWh prices.
"Four months since Winter Storm Uri, it is now apparent this was a widespread financial disaster across most Load Serving Entities in Texas. Energy Monger’s debt to ERCOT totals $8,884,384.25 and is an insurmountable amount for serving customers for four months and having less than 4,000 customers. This disastrous event is proof that the Texas market design failed and exposes Load Serving Entities to extreme financial risk.
"We encourage the Texas PUC and ERCOT to review the market rules so customers can benefit from a better market design and eventually benefit from deregulation. "
--- Statement from Energy Monger
The settlement noted that Energy Monger asserts as follows:
• During its operation, Energy Monger hedged for future energy needs on a daily and weekly basis in order to account for the projected needs of its growing customer base. Daily hedging was used for short-term purchasing based on weather and related demand. Weekly hedging was used for long-term purchasing based on the tenor of a customer's contract.
• On February 1, 2021, Energy Monger was hedged for 83 megawatt-hours (MWh), which represented 92% of its forecasted daily load, with plans to continue hedging at a similar rate throughout the duration of the month.
• In preparation for increased expected demand due to incoming winter weather, Energy Monger increased the amount hedged through its bilateral agreements on February 5 and February 11, 2021.
• Energy Monger continued hedging throughout the Winter Storm to secure generation to serve its customers. However, on February 18, 2021, Energy Monger's supplier terminated and liquidated its hedge agreement with Energy Monger, leaving Energy Monger fully exposed to the $9,000/MWh cap.
• Energy Monger purchased 1,023 MWh of electricity from ERCOT during the market event from February 13 through February 19, 2021. The total cost of energy and ancillary services Energy Monger purchased during the event was $9.4 million.
The settlement notes that Energy Monger has refunded any deposits or over-payments to customers, or is in the process of making appropriate arrangements for those customers who did not cash an initial refund check sent to such customers
The settlement provides that the PUC will draw on Energy Monger's letter of credit, which will partially satisfy Energy Monger's outstanding obligations to ERCOT. To the extent proceeds from the Letter of Credit do not fully satisfy the outstanding financial obligations to ERCOT, Energy Monger remains legally obligated for those unpaid amounts pursuant to the terms of its SFA with ERCOT.