Texas PUC Executive Director Issues Notice of Violation Against Retail Provider, Staff Seeking $1.75 Million Penalty

The executive director of the Public Utility Commission of Texas issued a Notice of Violation (NOV) to TruSmart Energy, LLC, informing the company that the PUC's Oversight and Enforcement Division (O&E) is recommending the assessment of a $1.75 million administrative penalty against TruSmart Energy, LLC for what O&E alleges is TruSmart's failure to comply with PURA § 39.352 and TAC §§ 25.107(j)(7), 25.107(j)(16), 25.214(c) and 25.214(d).

The NOV arises from TruSmart's prior default under the TDU delivery tariffs, for which its REP certificate was recently revoked.

According to an O&E Staff report attached to the NOV, TruSmart owes TDUs at least $1.1 million

"TruSmart's failure to timely remit payment for invoiced charges to TDUs and to default on over one million dollars of such invoiced charges is a serious and continuing violation. Defaulting on any sum of money owed to TDUs, but especially sums that are this large, causes serious financial harm to TDUs, the costs of which are ultimately socialized and recovered from the general body of ratepayers," the O&E Staff report says

"Furthermore, this violation appears to be knowing and willful," the O&E Staff report alleged.

"There is evidence that Mr. Benevides, President and CEO of TruSmart, obtained money under TruSmart's power purchase agreement for the express purpose of paying the TDUs, but instead used the money to fulfill TruSmart's other obligations. TruSmart was aware that it was having issues meeting its financial obligations and continued to obtain services from the TDUs despite knowing it would be unable to pay for these services," the O&E Staff report alleged

Docket 46093