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Enron Energy Texas Replies To Latest PUCT Staff RFIs, Expresses Concern One RFI Amounts To "Fishing Expedition" Beyond REP Rule Requirements
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Enron Energy Texas, LLC ("Enron") has replied and provided various information in response to the latest Requests for Information (RFIs) issued by Staff of the Public Utility Commission of Texas concerning the application of Enron Energy Texas, LLC for an Option 1 Texas REP certificate
As previously reported, Staff's RFI largely sought further information or confirmation of various financial information regarding Enron Energy Texas, LLC. With respect to the new RFIs, of potential note to future REP applicants, Staff asked whether the financial institution which issued an irrevocable standby letter of credit, to be used by Enron Energy Texas, LLC to meet certain financial standards for REP certification, required that Enron Energy Texas, LLC deposit collateral at the financial institution before issuing the letter of credit, and, if so, what percentage of the face value of the irrevocable standby letter of credit was deposited.
In responses to several of the RFIs, Enron Energy Texas, LLC noted that Staff did not raise any concern about the issues subject to the latest RFIs either in a prior round of RFIs, or in Staff's June 16 recommendation regarding Enron Energy Texas, LLC's REP application.
With regards to such issues, Enron Energy Texas, LLC stated in its responses, "it is unclear why Staff is now asking for this information. Enron, however, is happy to respond to Staff’s request."
As discussed further below, in response to an RFI seeking the percentage of each equity owner of Enron Energy Texas, LLC's ultimate parent, Enron Energy Texas, LLC stated in its response, "At best, this line of inquiry is beyond the scope of the rule. At worst, this line of inquiry is a fishing expedition into a privately held company."
As discussed further below, Enron Energy Texas, LLC also cited a REP certification proceeding in which Staff recommended approval of a REP applicant after receiving a supplemental affidavit supporting such REP applicant's sufficient shareholder’s equity, after Staff initially questioned the sufficiency of such REP applicant’s shareholder equity.
With regards to Enron Energy Texas, LLC's specific responses, Staff had issued an RFI requesting that Enron Energy Texas, LLC: "Provide proof that the irrevocable standby letter of credit filed in Project No. 37919 is maintained at a financial institution that is supervised or examined by the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, or a state banking department, in accordance with 16 TAC § 25.107(f)(4)(F)."
In response, Enron Energy Texas, LLC stated, "Enron Energy Texas, LLC ('Enron') has not changed or altered the irrevocable standby letter of credit since the same was filed in Project No. 37919, prior to Staff’s Request for Information dated May 20, 2025 (the 'May 20 RFI') and prior to Staff filing its initial Recommendation on Final Disposition on June 16, 2025 (the 'June 16 Recommendation'). As Staff did not raise this concern in the May 20 RFI or in its June 16 Recommendation, it is unclear why Staff is now asking for this information. Enron, however, is happy to respond to Staff’s request."
Enron Energy Texas, LLC further stated, "The irrevocable standby letter of credit was issued by Independent Bank (d/b/a Independent Financial). In January 2025, Independent Bank merged with SouthState Bank, N.A., a nationally charted bank subsidiary of the SouthState Corporation (NYSE: SSB). The National Information Center ('NIC'), maintained by the Federal Financial Institutions Examination Council in order to provide comprehensive financial and structure information on institutions for which the Federal Reserve has a supervisory, regulatory, or research interest, shows that the primary federal regulator of SouthState Bank, N.A. is the Office of the Comptroller of the Currency."
Enron Energy Texas, LLC further stated, "There has been no change in the issuer of the irrevocable standby letter of credit’s ability to meet the requirements of 16 TAC § 25.107(f)(4)(F)."
Staff had also issued an RFI asking: "Did the financial institution which issued the aforementioned irrevocable standby letter of credit require that Enron Energy Texas, LLC deposit collateral at the financial institution before issuing the letter of credit? If so, specify what percentage of the face value of the irrevocable standby letter of credit has been deposited by Enron Energy Texas, LLC at the financial institution."
In addition to stating, similar to language quoted above, that Enron Energy Texas, LLC has not changed or altered the irrevocable standby letter of credit and that Staff had not previously raised this issue, Enron Energy Texas, LLC also responded that, "As Staff knows, the law applicable to letters of credit is well established. The letter of credit represents an irrevocable obligation of the issuer (SouthState Bank) to the beneficiary (Public Utility Commission of Texas). The collateral arrangement between the issuer and its customer is contractual and based upon the risk policies of the issuer, which is outside the scope of 16 TAC § 25.107(f)."
Enron Energy Texas, LLC further stated, "Per the security arrangements with the issuer, Enron has posted an amount greater than the security required by the financial institution which is approximately 133% of the face value of the irrevocable standby letter of credit required by the applicable regulation."
Staff had also issued an RFI concerning Enron Energy Texas, LLC's filed balance sheet, with Staff requesting that Enron Energy Texas, LLC: "a. Provide a bank statement demonstrating that Enron Energy Texas, LLC has access to the cash shown on the balance sheet. b. Identify the entities or persons that provided this capital to Enron Energy Texas, LLC. c. Enron Energy Texas, LLC has several employees. By which entity or entities are these employees paid?"
In response, Enron Energy Texas, LLC stated, "Enron Energy Texas, LLC ('Enron') has not changed its capital structure since it filed its balance sheet on April 23, 2025," with Enron Energy Texas, LLC again noting that such filing pre-dates Staff's earlier RFIs and recommendation on disposition. "As Staff did not raise this concern in the May 20 RFI or in its June 16 Recommendation, it is unclear why Staff is now asking for this additional information," Enron Energy Texas, LLC again stated.
Enron Energy Texas, LLC stated in its response that, "Enron explained its concern about the scope of this question on a call with Staff on July 17, 2025. Requiring Enron to produce bank records is beyond the scope of 16 TAC § 25.107(f)(1)(B), and therefore Enron objects to this request as overbroad and as seeking information not relevant to this proceeding."
Enron Energy Texas, LLC stated in its response that, "Specifically, 16 TAC § 25.107(f)(1)(B) states that the applicant must demonstrate that it has one million dollars in shareholder equity. As Staff knows, cash and shareholder equity are not the same under generally accepted accounting principles."
Enron Energy Texas, LLC stated in its response that, "To satisfy this inquiry, Enron is happy to provide an updated balance sheet and a Shareholder’s Equity Affidavit from the President of Enron. Enron hopes Staff will find this solution agreeable, as 16 TAC § 25.107(f)(4)(c)(ii) allows an applicant to demonstrate sufficient shareholder equity through unaudited financial statements supported by a signed and notarized affidavit."
Here, Enron Energy Texas, LLC notes that Staff has accepted a similar affidavit in at least one recent REP application proceeding.
Enron Energy Texas, LLC stated in its response that, "While Enron has already met this requirement in its Amended Application, it is happy to provide this supplemental, updated balance sheet and affidavit. Consistent with the meaning of this rule, Staff has accepted a similar affidavit in at least one recent case where Staff questioned the sufficiency of the Applicant’s Shareholder Equity. See Application of ARM Energy Power, LLC for a Retail electric Provider Certificate, PUC Docket No. 57234, Item No. 19 (applicant providing supplemental Affidavit supporting sufficient shareholder’s equity), Item No. 22 (Staff recommending approval of the application)."
With regards to subpart (b) of the above-quoted RFI, Enron Energy Texas, LLC stated, "Enron is a wholly owned subsidiary of the Enron Corporation, which provided the initial capital."
With regards to subpart (c) of the above-quoted RFI, Enron Energy Texas, LLC noted, similar to prior language, that Enron Energy Texas, LLC has not changed or altered its number of employees since Enron Energy Texas, LLC filed its amended application on April 23, 2025, with such filing pre-dating Staff's earlier RFIs and recommendation on disposition.
Enron Energy Texas, LLC further responded, "Enron currently has no employees. All managers and officers of Enron are appointed and compensated by Enron Corporation, the ultimate parent of Enron."
Staff had also issued an RFI requesting that Enron Energy Texas, LLC, "Provide a list of the equity owners of Enron Corporation Parent; specify therein the percentage of Enron Corporation Parent owned by each equity owner."
In an April 2025 application, Enron Energy Texas, LLC had identified that it was a wholly owned subsidiary of Enron Energy LLC, and that Enron Energy LLC was a wholly owned subsidiary of Enron Corporation Parent, listing "Various Equity Owners" as owning Enron Corporation Parent.
In the RFI response, Enron Energy Texas, LLC noted, similar to prior language, that Enron Energy Texas, LLC has not changed its ownership structure since it filed its amended application on April 23, 2025, prior to Staff’s Request for Information dated May 20, 2025 (the 'May 20 RFI') and prior to Staff filing its initial Recommendation on Final Disposition on June 16, 2025 (the 'June 16 Recommendation').
Enron Energy Texas, LLC again stated, "As Staff did not raise this concern in the May 20 RFI or in its June 16 Recommendation, it is unclear why Staff is now asking for this information."
Enron Energy Texas, LLC further stated, "Enron explained its concern about the scope of this question on a call with Staff on July 17, 2025. As Enron explained, Enron believes that it has already provided this information and that Staff’s inquiry is beyond the scope of 16 TAC § 25.107(d)(2)(E)."
Enron Energy Texas, LLC further stated, "§ 25.107(d)(2)(E)(i) requires the applicant to provide a list of 'the applicant’s subsidiaries and parent companies up to the ultimate corporate parent (emphasis added [by Enron Energy Texas, LLC]), and any sister companies that are registered or certified with the commission. Each company must be identified by name and, if applicable, type of commission registration or certification.'"
Enron Energy Texas, LLC further stated, "In Attachment A-2 to its Application, Enron advised that it is a wholly owned subsidiary of Enron Energy, LLC ('Enron Energy'). Enron Energy is itself a wholly owned subsidiary of Enron Corporation. Enron Corporation, Enron’s ultimate corporate parent, is a privately held Delaware corporation, held by several qualified investors. Enron has no subsidiaries, and there are no sister companies that are registered or certified with the commission. Accordingly, Enron has complied with § 25.107(d)(2)(E)(i)."
Enron Energy Texas, LLC further stated, "§ 25.107(d)(2)(E)(ii) requires an ownership or corporate structure chart that includes ownership percentage. The chart 'must be as detailed as practicable, but must contain, at a minimum, the entities listed under clause (i) of this subparagraph and any entities with more than ten percent ownership of the REP or any of the REP’s parent companies with a controlling interest in the REP (emphasis added [by Enron Energy Texas, LLC]).'
Enron Energy Texas, LLC further stated, "In Attachment A-2 to its Application, Enron’s chart (1) lists the entities listed under clause (i); (2) shows all entities with more than a ten percent ownership in the REP (i.e., Enron Energy); and (3) shows all of the REP’s parent companies with a controlling (both direct and indirect) interest in the REP (i.e., Enron Energy and Enron Corporation)."
Enron Energy Texas, LLC further stated, "While Enron believes it has satisfied § 25.107(d)(2)(E)(ii), it acknowledges that this belief depends on the assumption that Staff interprets the phrase 'wholly owned' to mean one hundred percent (100%) ownership. Enron is happy to provide an updated chart if Staff has a different interpretation."
Enron Energy Texas, LLC further stated, "Nothing in § 25.107(d)(2)(E)(i) or § 25.107(d)(2)(E)(ii) requires the applicant or REP to provide the percentage of each equity owner of the REP’s ultimate parent. Indeed, based on Staff’s interpretation of the regulation as set out in the plain language of this inquiry, there is no rational basis to stop Staff from continuing to inquire in the ownership structure of the entities behind the ultimate corporate parent."
Notably, Enron Energy Texas, LLC in its response alleged, "At best, this line of inquiry is beyond the scope of the rule. At worst, this line of inquiry is a fishing expedition into a privately held company."
Enron Energy Texas, LLC in its response stated, "Enron Corporation offered to certify that it does not control any other commission certified or registered entity, but Staff did not accept the proffer."
Enron Energy Texas, LLC in its response stated, "Enron asked Staff if it could demonstrate it routinely asks other Applicants to provide information in excess of what is required by the regulation, but Enron did not receive an answer."
Enron Energy Texas, LLC in its response stated, "Otherwise, for the reasons stated above, Enron objects to this request as overbroad and as seeking information not relevant to this proceeding."
In response to another RFI, Enron Energy Texas, LLC filed a current balance sheet, which was filed on a confidential basis.
Docket 57544
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July 24, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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