Regulator Again Raises Concern With Retail Supplier Change In Control, Cites Statute Requiring Pre-Approval Of License Transfer

The Connecticut PURA has again raised concerns with an executed change in control of a retail electric supplier, citing a statute which requires PURA approval for the "transfer" of a license

PURA said in a letter to Perigee Energy that, "By letter dated March 2, 2017, Perigee Energy, LLC (Company or Perigee) informed the Public Utilities Regulatory Authority (Authority or PURA) in Docket No. 12-08-23 that on February 3, 2017, National Gas & Electric, LLC (NGE) acquired 100% of the membership interests of Perigee and implemented a change of control of the ownership of the Company. The letter also stated that NGE is an affiliate of Spark Energy, Inc. (Spark) and is also an affiliate of Spark HoldCo, LLC, which is the parent company of Spark Energy, LLC and Spark Energy Gas, LLC. The Authority is also in receipt of a letter dated March 23, 2017, wherein Perigee informed the PURA that it would undergo a change of control on April 1, 2017, in which Spark and its subsidiaries would acquire 100% of the membership interest in Perigee."

PURA noted that Section 16-245(i) of the General Statutes of Connecticut (Conn. Gen. Stat.) requires each licensed electric supplier to, "notify the Authority at least ten days before: (1) A change in corporate structure that affects the licensee . . . ."

As stated by PURA in its letter to Perigee, "Perigee notified the Authority of the first change in corporate structure approximately one month after the change took effect, which on its face appears to be non-compliant with Conn. Gen. Stat. §16-245(i)."

PURA further noted that Conn. Gen. Stat. §16-245(j) provides, in relevant part that: "No license may be transferred without the prior approval of the Authority."

"Based on the information provided by Perigee, the Authority questions whether the change of control has also resulted in a transfer of license from Perigee to Spark. More particularly, the transaction appears to be more than a change in ownership since some of the employees of NGE and Spark are now also working at Perigee. Such changes may ultimately affect the managerial, technical, and financial capabilities of Perigee," PURA said

"The Authority is particularly concerned regarding the fitness of Spark and Perigee given the timeliness and content of these recent letters, and other ongoing compliance matters," PURA said

PURA alleged, "apparent ongoing non-compliance," by Spark concerning the requirement to list certain summary information on bills. Responding to such concern in a separate proceeding, Spark explained that prior IT changes meant to ensure compliance erroneously only ensured that the information was present for new customers, renewed customers or customers changing their product, but not existing customers, and that it expects to be fully compliant with the summary information requirements on or before April 30, 2017

Additionally, PURA stated, "In December 2016, the Authority had to delist Spark’s proposed rates because their website was found to be non-compliant with regard to its renewable energy fact sheet, the lack of disclosure labels, and other requirements, all of which had been previously discussed with Spark."

PURA directed Spark and Perigee to answer various PURA concerns, specifically directing the companies to (among other things):

1. Explain the failure to comply with the terms of Conn. Gen. Stat. §16-245(i).

2. Explain how the Company complied with the requirements set forth in Conn. Gen. Stat. §16-245(j).

Spark Energy provided the following statement to EnergyChoiceMatters.com: "The Company is working with PURA to provide them the requested information in conjunction with this transaction."