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Texas People's Counsel Seeks Stricter Broker Rules, Including "Audits"
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Various parties have filed comments in a customary four-year review of the Texas PUC's retail electric market rules
Application Of Customer Protection Rules To All Commercial Customers
The Steering Committee of Cities Served by Oncor (OCSC) said that the PUC's customer protection rules under 16 TAC § 25.475 should be extended to large commercial consumers
"This would protect all commercial consumers from predatory market behavior, provide transparency, and help inform prudent buying decisions," OCSC said
§ 25.475 contains the General Retail Electric Provider Requirements and Information Disclosures to Residential and
Small Commercial Customers
Among other things, § 25.475 addresses disclosures, product definitions (including the definition for fixed rate product), electricity facts labels, affirmative consent for enrollment, contracting and terms of service requirements, and advertising, among other provisions
Current § 25.471 provides that a customer other than a residential or small commercial class
customer, or a non-residential customer whose load is part of an aggregation in excess of 50
kilowatts, may agree to terms of service that reflect either a higher or lower level of customer
protections than would otherwise apply under the Substantive Rules, except with respect to certain rules which cannot be waived such as rules governing slamming and the complaint process. This provision of § 25.471 would likely need to be modified to achieve OCSC's proposal for § 25.475 to effectively apply to large commercial customers
EFLs Used For Prepaid Price Cap, Other POLR Issues
Young Energy, LLC sought an extended period during which prepaid REPs may reference a previously posted Electricity Facts Label for purposes of compliance with the existing rule which caps prepaid rates at the large service provider (LSP) (non-volunteer POLR) POLR rate
§25.498(c)(15) provides that the price for prepaid service to a residential customer calculated as required by §25.475(g)(2)(A)(E) must be equal to or lower than the maximum POLR rate for the residential customer class at the 500 kilowatt-hour (kWh), 1,000 kWh, and 2,000 kWh usage levels as shown on the POLR EFL posted on the PUC's website for the applicable TDU service territory.
Currently, §25.498(c)(15) provides that, when an updated POLR EFL is posted on the PUC's website, the prepaid REP, at the REP’s option, may continue to reference the prior POLR EFL to ensure compliance with the rate cap described above, for prepaid service prices charged during the first 30 days, beginning the date that the updated POLR EFL is posted.
Young Energy said, "Market volatility continues to undermine the effectiveness of the real time price component of the POLR rates when used for capping prepaid service rates."
"Rather than asking to revisit a change of the real-time component of the POLR rate formula," Young Energy proposes a change to Substantive Rule 25.498(c)15 concerning the use of a prior LSP POLR EFL.
Young Energy would amend §25.498(c)(15) to read in relevant part, "When an updated POLR EFL is posted on the commission’s website, the REP, at the REP’s option, may reference any of the previous four months’ POLR EFLs to ensure compliance with this paragraph for prepaid service prices charged during the first 30 days, beginning the date that the updated POLR EFL is posted."
Young Energy also sought a change to the effective dates of the LSP POLR EFLs which are posted to the PUC's website
Currently, LSP POLR EFLs must be posted by the 10th day of each month, with the new EFLs also effective on the 10th day of each month (thus, if filed on the 10th, the EFLs are effective immediately)
Young Energy said that the current practice does not allow adequate time for prepaid REPs to update their own pricing and ensure compliance with the rate cap for prepaid service, which is based on LSP POLR rates, under PURA §39.107(g).
Young Energy represented that at least one LSP indicated to Young Energy that the Real-Time Settlement Point Prices (RTSPPs) for the applicable load zones for the preceding calendar month, which are needed to calculate the LSP POLR EFL, are sometimes not final until the 5th of the month. Young Energy said that, as a result, an earlier filing date for the LSP POLR EFLs may be problematic
Young Energy thus recommended that the LSP POLR EFLs be filed by the 10th of each month, but that the effective dates for such POLR EFLs would be the 15th day of each month.
Separately, the Office of Public Utility Counsel said that the POLR rules at 16 TAC § 25.43 should be amended to include requirements for POLRs to provide notice, customer information, and terms of service in Spanish by default, or, at a minimum, include information in Spanish on how to request translated information
REP Certification Changes & Trade Name Limits
The Office of Public Utility Counsel proposed that the REP certification rules be amended at 16 TAC § 25.107(f)(1)(A)(ii) to require either a minimum current net worth ratio of greater than 1.0, "to at least guarantee some ability to pay", or preferably an estimated post-application approval minimum net worth ratio of 1.0, "to ensure that the guarantor can pay on all liabilities following the approval of the application."
16 TAC § 25.107(f)(1)(A)(ii) requires that a REP guarantor must have either an investment-grade credit rating or tangible net worth greater than or equal to $100 million, a
minimum current ratio (defined as current assets divided by current
liabilities) of 1.0, and a debt to total capitalization ratio not greater
than 0.60, where all calculations exclude unrealized gains and
losses resulting from valuing to market the power contracts and
financial instruments used as supply hedges to serve load.
OPUC said that the PUC should amend 16 TAC § 25.107(f)(4) to require REPs to provide a complete summary or history of insolvency, bankruptcy, dissolution, merger, or acquisition as part of the REP application
OPUC proposed to limit a REP and any of its affiliates to five assumed names in aggregate across all affiliates. In other words, three separately certificated REPs which are affiliated with each other would be limited to five trade names in aggregate (as opposed to each individual REP being permitted to use 5 trade names per REP)
OPUC said that allowing each REP within an affiliated REP family to each individually have five assumed names has, "the potential to increase confusion and mislead for consumers."
Applying Aggregator Registration Rules To Brokers, Broker Audits
The Office of Public Utility Counsel urged the PUC to amend 16 TAC § 25.112(c) so that the electric aggregator registration requirements in 16 TAC § 25.111(f)(1)(H)-(Q) also apply to brokers.
When the law authorizing the PUC to require broker registration was adopted by the legislature, certain backers of the bill had expressed legislative intent that the new broker registration at the PUC was meant to be straightforward, with the information required to be basic and only meant to allow a customer to contact a broker with any issue.
Sponsor Rep. Tan Parker stated on the floor concerning the registration, in a statement of legislative intent, "it [the registration] needs to be limited in its purpose.
We want them [the PUC] to be very strict in terms of just making certain that they're only
talking about contact information, the most basic information about the entity. We
want them to be able to use their authority very sparingly. I want this to be
extraordinarily limited ... I intend to
personally shepherd this process and make certain the PUC keeps it very simple
to just filling out a basic form with the most basic of information. Again, we want
brokers that are doing a wonderful job for Texas to continue to do so and to not
have any of their secret sauce, so to speak, with regard to how they operate their
business to become public"
However, during the PUC's rulemaking to implement the broker registration, OPUC and others cited the Author's/Sponsor's Statement of Intent for SB 1497.
OPUC had represented that this Statement of Intent stated that, "S.B. 1497 seeks to apply the same registration and customer protection requirements
currently applied to aggregators and create the exact same registration standard to those providing
brokerage services." [emphasis added]
OPUC had in the initial broker rulemaking made the same proposal as it does now, that the aggregator registration requirements in 16 TAC § 25.111(f)(1)(H)-(Q) should also apply to brokers. The PUC declined to adopt this proposal in the initial broker registration rulemaking
OPUC in its newly filed comments said, "The customer protections in the aggregator registration requirements are important customer safeguards that are also appropriate for brokers. Requiring more upfront information during the broker registration process will enable the Commission to more thoroughly review registration applications and will allow customers to better evaluate prospective brokers."
OPUC also sought to include in the broker rule a rule that prohibits similar, duplicative, or misleading business names for brokers to minimize customer confusion, similar to an existing rule applicable to REP names
OPUC sought to require in broker registrations the disclosure of felonies, fraud and other serious violations, regardless of whether these violations relate to the broker’s brokerage services.
"The Commission should require ample and necessary information to determine whether a person should be deemed qualified to enter a customer’s home or business to provide brokerage services," OPUC said
Additionally, OPUC proposed for brokers the disclosure of compensation sources, and, "Regular audits of registration brokers."
More specifically, OPUC sought amendments to strengthen the broker-related rules through: "(1) Mandatory registrations; (2) Disclosure of compensation sources; (3) Adoption of clear standards of conduct; and (4) Regular audits of registration brokers."
"Brokers should provide transparent and well-structured information on all available energy plans and associated costs," OPUC said
"In addition, they should maintain educational resources for consumers and ensure a user-friendly process for filing and resolving complaints," OPUC said
General Retail Market Consumer Protections
OPUC proposed a variety of general customer protections, without proposing specific rule language
Among other things, OPUC sought the, "Prohibition on the pass-through of wholesale market-based ancillary service charges and other excess costs to residential and small commercial customers."
"These charges are inappropriate for customers who cannot reasonably hedge or respond to real-time market volatility," OPUC said
OPUC said that the PUC should adopt rules for the following:
• Clear safeguards to ensure customers are not penalized or disadvantaged for opting out of voluntary programs offered by Retail Electric Providers.
• Require REPs to clearly explain how enrollment in any optional products or services affects customer rights and charges.
• "Full transparency" in pricing, contract terms, and fees.
• "Mandatory disclosures such as electricity fact label with price, contract term, and generation source of the retail electric plan." (OPUC did not expand on what it believes is specifically lacking in the current EFL)
• Robust privacy and data protection measures to guarantee residential and small commercial customer data is not misused or compromised.
• Assurances customers are not prematurely disconnected for nonpayment.
• "Additional provisions to protect consumers from scam retail electric providers."
• Prohibition of misleading or aggressive marketing tactics, including telemarketing and door-to-door sales.
• Enhanced oversight of renewable or "green" energy claims to ensure they are accurate and understandable.
OPUC said that the PUC should create a "prominently" featured complaint portal on the PUCT website.
OPUC said that the PUC should, "Amend 16 TAC § 25.474 to require a Retail Electric Provider (REP) or aggregator to advise the applicant if early termination fees may apply. This should be required for all door-to-door solicitations and not limited to those using a Portable Electronic Device (PED)."
It was unclear what OPUC is seeking beyond the current requirements. The PUC's door-to-door rules generally require that, prior to requesting confirmation of the move-in or
switch request, a REP or aggregator shall clearly and conspicuously disclose, among other things, "the presence or absence of early termination fees or penalties, and applicable
amounts." (for door to door, the REP may choose to conduct such disclosures by following the disclosures required under either the telephonic rules or the written LOA rules, but the door to door rules specifically require the REP to follow one of these two options, both of which require the same early termination fee disclosure)
OPUC said that the rules should be revised to differentiate complaints concerning REPs between emergency and non-emergency complaints. Emergency complaints should have a REP response time of 15 days, rather than 21 days, OPUC said
Disconnection Moratoriums, Other DNP Issues
AARP Texas sought changes to the disconnection for non-payment rules, which currently rely on the issuance of a "heat advisory" by the National Weather Service for the imposition of a mandatory suspension of DNPs
AARP Texas said that the National Weather Service may cease issuing missives termed "heat advisories", due to public confusion with other issuances (such as heat "watches")
AARP Texas prefers a season-long summer DNP moratorium (with AARP citing an Arizona policy which has a moratorium from June 1 through October 15)
AARP alternatively said that a temperature-based DNP moratorium should be adopted, with DNP not allowed when forecast temperatures are above 95 degrees
Concerning application of a temperature-based DNP moratorium, AARP
Texas recommends that, "it extends beyond a one-day forecast to at least a three-day (72-
hour) period over which temperatures are predicted to be 95°F or higher."
Among other things, the Texas Energy Association for Marketers and Alliance for Retail Markets
(collectively, the REP Coalition) said that the rules should be reworked, "to make clear that TDUs do not have authority
to unilaterally impose a disconnection moratorium after a hurricane or
other natural disaster."
The REP Coalition further proposes to update the DNP rules, "to establish a process whereby the start and end
times of a disconnection moratorium due to extreme weather are both
clear cut and straightforward for a REP to ascertain. One suggestion
is that the REP rely on the TDU and not directly on the National
Weather Service and that the moratorium begin two hours after the
TDU sends a Market Notice."
The REP Coalition would also update the rule to require TDUs to suspend delivery charges
when a valid disconnection request is rejected
In separate comments, Vistra Corporate Services Company made a similar recommendation, stating, "Vistra has observed instances of
TDUs refusing to disconnect
customers for nonpayment when the
REP is entitled to request
disconnection of the customer. The
TDU in turn continues to collect its
fees from the REP, even though the
REP is not recovering those fees
from the customer. TDUs should
not be enriched at the expense of a
REP when the TDU refuses to
accept a valid disconnection
request."
Docket 57999
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Texas Cities Seek To Apply Customer Protection Rules To All Commercial Customers
OPUC Seeks Prohibition On Pass-Through Of Wholesale Market-Based Ancillary Service Charges
Texas REP Seeks Change In POLR EFLs Used To Apply Prepaid Service Rate Cap
July 11, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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