Mega Energy Discloses Details of Sale of ERCOT Book in Seeking Relief from POLR Obligation

Mega Energy disclosed several details of the recent sale of its Texas retail customer book to TXU Energy in seeking an order from the Public Utility Commission of Texas rescinding a prior designation as a Provider of Last Resort.

The sale of Mega Energy's Texas customers to TXU had been first reported by Matters.

In the filing with the PUCT, Mega Energy, LP said that it entered into an Asset Purchase Agreement (APA) with TXU Energy on December 21, 2012.

According to the agreement, Mega Energy, LP agreed to sell all ERCOT customers to TXU pursuant to a three phase transition as follows, as described in Mega Energy's filing:

"(1) All non-Sharyland & Nueces customers were to be transitioned as soon as possible and 99% of them were switched within 3 business days of December 21, 2012.

"(2) All Sharyland customers would be transitioned as soon as TXU was operationally prepared to serve the customers but no later than March 31, 2013.

"(3) All Nueces customers would be transitioned by March 31, 2013."

The APA also contained a non-competition provision whereby Mega Energy would not actively seek to acquire new customers in ERCOT for a term of 30 months, except in Sharyland and Nueces where Mega Energy, LP will continue marketing its services until TXU is operationally prepared to serve the customers but no later than March 31, 2013.

In conjunction with the APA, Mega's supply agreement was assigned to TXU. That supply agreement designated Luminant Energy as the company's QSE services provider. In order to continue to serve the Sharyland and Nueces customers through March 31, 2013, Mega entered into an interim supply agreement with Luminant Energy for this limited purpose.

Pursuant to the above, effective no later than March 31, 2013, Mega Energy will no longer be serving any customers in the Sharyland service territory and will not have a QSE services provider or wholesale electricity provider in ERCOT

Accordingly, Mega Energy asked that the PUCT rescind its prior designation of Mega Energy, LP as a Large Service Provider (LSP) designated as a POLR provider in the Sharyland service territory for residential and small non-residential customers.