Update: Retail Supplier Says It Has M&A Solution To Continue To Supply Customers, Comply With Utility Tariff
November 2, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • firstname.lastname@example.org
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Gasearch CEO Susan Faith filed the letter below with the Public Utilities Commission of Ohio on November 2 in which Faith states that a suitor is prepared to proceed with a merger/acquisition of Gasearch and that such suitor could have financial commitments ready as early as November 2
As first reported yesterday, Dominion Energy Ohio (DEO) filed an application at the Public Utilities Commission of Ohio requesting authority to terminate or suspend Gasearch, LLC (Gasearch) from participation in DEO’s supplier program, citing information that Gasearch intended to stop supplying customers
Given the M&A development, Gasearch sought to continue as a natural gas "supplier" and "broker". Gasearch is currently certified by PUCO as a marketer (supplier), broker, and aggregator under a "CRS" case designation (generally meaning LSE, as opposed to "AGG" cases for non-LSEs brokers/aggregators). Gasearch was acting as a supplier (marketer) at DEO and a broker in other areas of Ohio, according to the letter.
Gasearch also noted that DEO, "has sent a summary of their proposal to the PUCO as it relates to the winding down of Gasearch," and that Gasearch agrees with the proposal. It wasn't specifically clear if Gasearch was referencing DEO's October 28 letter that included a proposed "remedy", and whether the suitor would be complying with DEO's proposal about continuing to meet Gasearch's obligations and supply gas, etc.
In the letter, Gasearch CEO Faith wrote, "As of today, Gasearch would like to request to continue operations of Gasearch as supplier and broker. Please read below as to what transpired up to the day Gasearch decided it had to close its doors and what has changed since that decision was made."
"In August of 2021 Gasearch signed a letter of intent to sell/transfer the company by way of a Merger & Acquisition (M&A). The due diligence was done, and the sale was to take place by Sept 30, 2021. At the beginning of September, I was notified that the company that was to merge with Gasearch, was acquired and everything would be finalizing in approximately two weeks. At that time, I was told that everything would be handled as agreed. Gasearch, LLC would continue to remain and operate the same. They were to be the funding portion. At that time, I advised them them [sic] that based on all our previous discussions for Gasearch that I did not arrange for funding for November gas and Gasearch needed to be funded by mid-October at the very latest. They told me to be patient. As of October 11, 2021, I received an email that they were getting close to finalization. I expressed the urgency as Gasearch did not was completely funded for November. To the date of 10-31-2021 funding has not happened. On the evening of November 1, 2021, I was contacted by the (M&A) company and was told they are ready to proceed with the Gasearch acquisition. They also stated that they could have any financial requirements to the PUCO as early as Tuesday November 2, 2021," Faith wrote
"Prior to being presented with the Merger & Acquisition, I applied for the SBA EIDL loan in June. To date nothing has come through from them. After the agreement for the (M&A) sale/transfer of Gasearch materialized, thought I had a backup plan with the SBA loan in case there was a delay. The market price of natural gas tripled in cost practically overnight, crippling the cash flow. The sale was not going through quickly enough and neither was the SBA funding," Faith wrote
"Starting in late October I felt like the sale/transfer of Gasearch was not going to be finalizing any time soon. To look for additional funding for November did not seem like a practical solution with such a short amount of time until the funds were needed. I tried my best to get something moving. I reached out to the Cleveland SBA for assistance but was told the loan is in processing and will take weeks. I also contacted colleagues to see if they had an interest, but no one felt that this could be accomplished in that short amount of time," Faith wrote
"I did not want to get into a situation of not being able to supply gas. Gasearch closing was a dreaded last resort, but it appeared to me to be the responsible thing to do," Faith wrote
"I contacted Dominion to explain what I needed to do with Gasearch in mid to late October. They explained the steps needed to be taken and how we could proceed, and they are all doable. When Dominion said there was not enough time on their part to do what needed to be done, I misunderstood what that meant because Gasearch had the time to do what was needed to be done. So Gasearch began the process. At that time, I was unaware of the PUCO process," Faith wrote
"I began to proceed with the steps that had been discussed with Dominion. I sent out a letter that Gasearch was closing. Gasearch did that but it was not the proper letter. After I was contacted by the PUCO I realized that there was PUCO protocol for this situation. I asked the PUCO to help me with a new letter to explain the situation and the options for the customers and they were so helpful. I sent the revised PUCO letter to Dominion for their approval and they made some additional changes as it related to their system. After a few discussions back and forth with Dominion, and after I had already started the process with Dominion, they came up with a proposal that would help to solve the gas situation for the gas supply to customers in November," Faith wrote
"Dominion has sent a summary of their proposal to the PUCO as it relates to the winding down of Gasearch. I agreed with Dominion’s proposal. Dominion has been beyond helpful to make a smooth transition for the customers and to find a solution to mitigate the Gasearch exit as a natural gas supplier," Faith wrote
"I understand that the PUCO will decide as to how they will handle the certification for Gasearch and after everything tht [sic] has transpired after the process of closing began. I would like to request the opportunity to rescind my request to close Gasearch and would be extremely grateful tobe [sic] given a chance to remain as Natural Gas Supplier & Broker given the recent development with the M&A," Faith wrote
"I also wish to express that in the 21 years that Gasearch has been in business, that I do not recall any issues with the PUCO or upset customers. I would like for this to be a part of the PUCO decision as it relates to the future of Gasearch. I hope that our track record shows what type of Supplier Gasearch has always been and would continue to be. With all the events of this year with the Texas freeze off, the extreme heat, the rising cost of gas, COVID and lack of employees, I feel Gasearch has done a good job moving through this last year considering the many obstacles that were presented, until cash flow did not fall into place as expected," Faith wrote
"I understand the confusion that I caused by not following PUCO protocol at the beginning of all of this, however, in all the years, I never had to deal with any PUCO issues. I had so many other to deal with I sincerely was caught off guard, and as soon as I realized the mistake on my part, I did my best to follow the rest of the guidelines as they applied to Gasearch," Faith wrote
"Please take into consideration the issue that the broker certification is on the same certification as a supplier. Hopefully, both the supplier and the brokers certification can remain in place. I would also like to ask if the funding does come through with the proper financial and any other documentation required, would Gasearch be able to continue to operate as a supplier. If this can happen sooner rather than later I could be able to take back the customers that may not have found another supplier," Faith wrote
"One last concern that I have is the certifications that Gasearch has with the PUCO. It appears to me that the Natural Gas Supplier Certificate is tied to the Gasearch Natural Gas Broker Agreement. Gasearch is also a Broker in Ohio other than the Dominion territory. Should the PUCO decide that Gasearch can no longer remain as a supplier, I would like to request that the broker portion remain operable. I would also like to express that I am extremely grateful for the help and direction that both Dominion and the PUCO have given to Gasearch during this extremely emotional and stressful time. I hope and pray that Gasearch can be afforded a second chance," Faith wrote