Texas ALJ Proposes Dismissal Of Retail Provider Complaint Against TDU -- EnergyChoiceMatters.com

Texas ALJ Proposes Dismissal Of Retail Provider Complaint Against TDU

Addresses REP Claims For TDU Payment Of Energy Charges Incurred By Customer That TDU Declined To Disconnect

February 15, 2024

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A Texas PUC ALJ would dismiss as moot a complaint filed by Spark Energy, LLC (Spark) against CenterPoint Energy Houston Electric, LLC (CEHE, CenterPoint Houston, or CenterPoint) in which Spark had alleged violations of PUC rules due to CEHE's alleged, "refusal to disconnect a critical care customer served by CenterPoint."

See background on the complaint here

The customer had been designated critical care. Spark argued that substantive rule requires a TDU to execute a valid disconnect for non-payment regardless of the customer's critical care status

As previously reported, CEHE has moved to dismiss the complaint because, among other reasons, the customer is no longer served by Spark, and thus CEHE argued no controversy exists and the complaint has been rendered moot.

Spark argued that a determination concerning whether CEHE violated a substantive rule remains a live controversy, and a determination is necessary to the extent Spark pursues litigation in another venue

"Should Spark seek to recover damages from CenterPoint in District Court, it must first exhaust its administrative remedies and the determination of whether or not CenterPoint violated a Commission regulation will most definitely have a practical legal effect on an existing controversy regarding recovery of those damages in subsequent proceedings," Spark had said

Spark said in opposing dismissal that, "Spark is aware that the Commission has issued Preliminary Orders stating that the Commission does not have authority to order some forms of relief available in courts of law, such as awarding damages and that those types of relief must be sought before a court of competent jurisdiction."

Spark noted, "But in those Preliminary Orders the Commission has made it clear that the Commission has the exclusive jurisdiction to resolve matters regarding alleged violations of PURA and Commission rules. It has also stated that a party may then use the Commission regulatory determination to adjudicate claims within the court' s jurisdiction[.]"

Spark did in its complaint seek to recover the unpaid energy portion of the customer' s invoices from CenterPoint from the date of the original disconnection request to the time the customer was no longer served by Spark

However, the ALJ said that the matter of unpaid energy charges is only a live controversy if CEHE had been obligated to pay such unpaid energy charges. The ALJ found that no such obligation exists, and thus, the complaint has been rendered moot due to the customer no longer being served by Spark

The ALJ proposed that, unless Spark withdraws the complaint, the ALJ will prepare a proposal for decision recommending dismissal for failure to state a claim for which relief can be granted, mootness, or for other good cause shown

The ALJ said, "As partial proof of a live controversy, Spark claims that it has sought recovery from CenterPoint of its non-paying critical care residential customer’s energy-related invoices from the date of the original disconnection request to present. A claim that does not create a live controversy or keep a controversy alive unless CenterPoint was obligated to pay those invoices."

The ALJ said, "In this complaint, Spark Energy’s and CenterPoint’s specific obligations and rights with regards to Spark Energy’s disconnection request for a non-paying critical care residential customer are stated in 16 TAC § 25.483(g). Spark Energy requested disconnection as it was entitled to do. CenterPoint rejected the request as it was authorized to do in subsection (g)(4) and stopped charging for transmission and distribution charges, except for securitization charges, for the customer at issue."

"[A] refund or penalty that is equal to any further energy charges that accrues to the customer after the transmission and distribution utility refuses to disconnect is not enumerated in the rule. Thus, in addition, Spark Energy’s complaint of continuing economic harm because CenterPoint refused to disconnect the customer at issue is beyond the scope of 16 TAC § 25.483(g). It is relief the Commission cannot order. Therefore, Spark Energy’s continued billing to CenterPoint for the company’s prior nonpaying customer’s energy-related invoices does not create or sustain a live controversy between itself and CenterPoint because CenterPoint has no obligation to pay those invoices," the ALJ said

"Although Spark Energy is correct that the Commission said simply being categorized as a critical care residential customer did not authorize free electricity, the Commission also did not say that a retail electric provider with a critical care residential customer that did not pay could or would be made whole economically by the relevant transmission and distribution utility if a disconnect for nonpayment request was rejected and the utility complied with the requirements of 16 TAC § 25.483(g)(4). No. [sic] As noted, this rule enumerates CenterPoint’s obligations when it refused to disconnect Spark Energy’s non-paying critical care residential customer and there is no dispute over the fact that CenterPoint satisfied those obligations. And the express language of 16 TAC § 25.483(g)(4) provides no additional remedies, rights or obligations. The rule did not create an implied obligation or cause of action for a retail electric provider to bring against a transmission and distribution utility because the retail electric provider is not happy with the outcome of operation of the rule."

Docket 54711

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