PUCT's Anderson Warns Texas REPs of "Death Penalty" for Misuse of Switch-holds

Texas Public Utility Commissioner Kenneth Anderson reminded retail electric providers that misuse, or incorrect use, of the switch-hold process warrants a "death penalty," such as license revocation, from the Commission, in his view.

Anderson's comments were prompted by a settlement between Acacia Energy, Inc. and Staff, which, among other things, resolved allegations that Acacia Energy was not in compliance with P.U.C. SUBST. R. 25.480(l), relating to switch-holds, as Staff alleged that Acacia applied switch-holds to customer ESI IDs at customer enrollment.

The settlement had been first reported by EnergyChoiceMatters.com last month.

Other REPs have made similar settlements with Staff that have included allegations that switch-holds applied to customer ESI IDs at customer enrollment are not in compliance with the rules.

Although the settlements did not fully describe the circumstances under which the REPs placed the switch-holds on the accounts, it appears that in some cases, REPs took the position that if a deferred payment plan was offered to the customer at enrollment, that deferred payment plan then permitted a switch-hold to be placed on the account at enrollment, which Staff has said is inconsistent with the rule.

Anderson did not oppose the instant settlement, but took the opportunity to direct Staff that, in his view, Staff may "bring out the carving knives" for violations or errors relating to switch-hold rules.

Anderson noted that the $75,000 stipulated payment required from Acacia appears to represent a severe penalty given that it is permitted to be paid in four installments.