PUCT's Nelson Gives Notice That Revocation is Preferred Solution for Non-Compliant REPs

PUCT Chairman Donna Nelson put REPs on notice that the she will not offer to help REPs which run afoul of the Commission's certification rules in the future, saying that she regretted granting time for dPi Energy to come into compliance rather than revoking the certificate.

Nelson had previously been prepared to revoke the dPi Energy REP certificate, due to ownership by Zahed "Ed" Lateef who was a principal of Riverway Power when it experienced an involuntary mass transition and therefore ineligible to own more than 10% of a REP under the Substantive Rules.

At the recommendation of Commissioner Kenneth Anderson, Nelson agreed to provide time for dPi Energy to complete a sale to remove Lateef from the business, in order to maintain certification and avoid having customers to transition to the Provider of Last Resort (see 9/2).

However, expressing frustration at the time the Commission has expended on the case, with Nelson viewing the company as having to have been dragged "kicking and screaming" to come into compliance, Nelson said that if she had to do it over again, she would have simply revoked the certificate.

Nelson also said that she feels like there's been "subterfuge," citing as the latest example a security agreement dPi will have with Amvensys Capital Group, where Lateef is CEO, with Nelson stating that the security agreement provides Lateef with a right to the dPi customer contracts should dPi's new owners default on the security agreement. Nelson said that this arrangement is inconsistent with the Commission's stated goal of removing Lateef entirely from dPi.

"In the future I'm not going to be charitable," with non-compliant REPs, Nelson said, noting that the POLR rules have been substantially revised and no longer include the formerly punitive rates for mass transition customers.

Anderson agreed that in retrospect it probably would have been cleaner to address the original revocation petition

Frustration aside, the Commission did approve the purchase and sale agreement transferring ownership of dPi Energy to TruSmart Energy Holdings, LLC, which allows the continuation of the certificate (see 10/3).