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Texas ALJ Denies Motion To Dismiss Complaint Against REP, Finding That Alleged Behavior Which Could Constitute A Rule Violation Constitutes Relief Which Can Be Granted
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A Texas PUC ALJ has found that a complainant alleging behavior by a retail electric provider that that could constitute violation of a rule (that is
within the authority of the Commission to enforce) has stated a claim for which relief can be
granted, as the ALJ denied a motion to dismiss the complaint
Although not specifically referencing the PUC's recent decision in an unrelated customer complaint against Oncor (see story here), in which the PUC said that the seeking of an order finding that a violation of a rule or law occurred is a claim for relief which can be granted, the ALJ's decision appears to adopt such precedent in addressing the instant complaint against the REP, which has not previously been the usual treatment of formal complaints against REPs.
Notably, Commission Staff had recommended dismissing the complaint to the extent the complainant raised no issues beyond the complainant's prior pleadings, in part because Staff had argued that the complainant failed to state a claim for which relief can be granted
Although the complaint may have been assigned to SOAH regardless due to factual disputes, the ALJ's finding that the alleging of a violation of a rule that is within the authority of the Commission to enforce constitutes a claim for which relief can be
granted further demonstrates that PUC presiding officers will more broadly consider the relief available to complainants in formal complaints against REPs, where many complaints, which merely seek damages, were previously dismissed without examining whether any alleged violation occurred, since the PUC is not empowered to award damages.
The ALJ's decision that the instant complainant seeks relief available to be granted, because the complaint alleges the violation of a rule, is also notable because the pro se complainant did not specifically seek such relief or allege any specific rule violation, apart from, as discussed below, alleging that terms of an average billing program were not being followed which, if true, could potentially constitute a rule violation. Also notable is that the complainant did not specifically seek a refund of any alleged incorrect charges or overcharges
The ALJ's order came in a formal complaint brought by a customer against Direct Energy in Docket 58129
The complainant was being billed under an average monthly billing program. The complainant broadly alleged that the terms of the program were not being honored, and that the charges were, "inflated." The complainant wanted, "someone [to] look into this matter."
The complainant also alleged that the billed amount, "does not reflect the
actual usage."
The complainant, filing on a pro se basis, did not include any specific alleged violations of rule or law, or include a prayer for specific relief
Direct Energy provided the following statement concerning the matter:
"Direct Energy believes that it billed the account consistent with the Complainant’s contract and Commission rules."
--- Statement from Direct Energy
An earlier informal
complaint filed by the complainant with the PUC was closed without any rule inconsistency identified.
Direct Energy in a filed response to the complaint had observed that the complainant has not specified the relief requested as required by 16 Tex. Admin.
Code (TAC) § 22.242(e)(2)(I). "Therefore, it is unclear if the Commission has the jurisdiction to
award the relief complainant is seeking," Direct Energy had stated in its filing
Direct Energy said in its filed response that it billed the complainant's account based on Average Monthly Billing, consistent
with the complainant's contract, the Average Monthly Billing enrollment, the actual usage
provided by CenterPoint Energy Houston Electric, LLC (the transmission and
distribution utility for complainant's premise), and 16 TAC §§ 25.480(h) and 25.479(c)(1)(H).
Direct Energy said in its filed response that, "The [Average Monthly Billing] option
is not intended to and does not result in a flat charge each month, as is clear in the descriptions of
the Average Monthly Billing option provided to Complainant."
Under the Average Monthly Billing option, Direct Energy said in its filed response that, to calculate the amount to be paid each month, the then current bill amount is added to the previous 11 bill amounts for the service address if available. That amount is divided by 12 or, in cases where Direct Energy has served the customer for less than 12 months, by the total months available for the service address. The Deferred Balance is any difference between the average monthly payment amount and the actual charges. Each month, 1/12 of any Deferred Balance accumulated is added or subtracted to create the amount due for the plan for that billing cycle.
PUC Staff, which had recommended dismissal of the complaint based upon the complainants' issues brought to date, had observed that, "Per this formula, if electricity use goes up over time, AMB [Average Monthly Billing] would result in higher electric bill over time as actual bill amounts older than 12 months are cycled out in favor of the newer actual bill amounts reflecting higher total usage."
Staff observed that, during the time periods cited by the complainant, the complainant's usage increased, while CEHE's TDU charges also increased
Staff had said, "the AMB plan appears to be calculated correctly with a 12-month rolling average, with the deferred balance rising and falling accordingly based on the difference between the average monthly billing amount and the actual charges that month."
Staff and Direct Energy separately noted that, if the complainant is challenging the accuracy of the complainant's metered usage, such complaint should be brought against CEHE, and not Direct Energy
Staff said in statement of position, "If [complainant] does not have other issues relating to Direct Energy, this formal complaint should be dismissed under 16 TAC § 22.181(d)(2) and (d)(8)."
§ 22.181(d)(2) allows dismissal for, "moot questions or obsolete petitions".
§ 22.181(d)(2) allows dismissal for, "failure to state a claim for which relief can be granted".
Direct Energy in a motion for dismissal stated, "It appears that Complainant’s request was for third-party review of whether Direct
Energy’s AMB has been accurately applied to her account. That has now been achieved as it
has been both reviewed at the informal complaint stage by CPD Staff, and in this formal
complaint stage by Commission Staff assigned to this docket. Accordingly, Direct Energy agrees that the complaint should be dismissed as moot under 16 Tex. Admin. Code (TAC)
§ 22.181(d)(2)."
However, in denying a motion to dismiss, the ALJ said, "Commission Staff’s arguments are based upon its view of the evidence and the factual
dispute that has been raised by [complainant], go to the merits of the complaint, and rely on factual
claims that have not been established in this case at this time. Whether [complainant] has been billed
for charges not authorized or provided by Direct Energy is a factual and legal question that will be
determined through this proceeding."
Notably, the ALJ held that, "Because [complainant] is alleging the violation of a rule that is
within the authority of the Commission to enforce, [complainant] has stated a claim for which relief can be
granted. Likewise, because the legal and factual issues in this case are unresolved, the case is not
moot. Commission Staff’s motion to dismiss is denied accordingly."
Parties were directed to file whether they requested a hearing on the matter. If no hearing is requested or held, the ALJ will make a proposal for decision based on the limited information in the ALJ's possession
Parties were also provided a deadline for any motions for summary decision
Docket 58129
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October 8, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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