Texas PUC Staff Plans To Bring Broker Regulation Proposal For Publication For Commission Consideration At Nov. 14 Meeting

Strawman Would Prohibit Brokers From Stating Or Leading A Customer To Believe That Receiving Brokerage Services Will Provide A Customer With Better Quality Service From A REP

In a memo updating Commissioners on various projects to implement recent legislation, Staff of the Public Utility Commission of Texas stated that Staff plans to bring a proposal for publication in Project No. 49794, Rulemaking for Broker Registrations, for Commission consideration at the November 14, 2019 open meeting

A schedule included with Staff's memo indicates final action on a proposed rule would be taken by the end of January 2020

As exclusively first reported by EnergyChoiceMatters.com on September 18 (story here), Staff has issued a strawman rule concerning broker regulations and public comment

As had been first noted in our exclusive analysis of the strawman, the strawman § 25.486 would require that all brokers must inform clients of the following, among other things, prior to the initiation of brokerage services:

• "How the broker will be compensated for providing brokerage services, who will provide the compensation, and the amount or method of calculation of the compensation"

• "The names and commission certificate numbers for any REPs with which the broker has an agreement to recommend that REP to clients"

• "Whether there is a financial penalty for terminating the brokerage services agreement, and if there is, the amount of the penalty"

The strawman § 25.486 would provide that, "An agreement between a broker and a client that authorizes the broker to act as the client's agent must be in writing."

The strawman § 25.486 would provide that prohibited communications from brokers would include, but would not be limited to, among other things, "Stating, suggesting, implying or otherwise leading a client to believe that receiving brokerage services will provide a customer with better quality service from a REP or TDU."

The strawman 16 TAC § 25.112 would provide that a broker registration expires three years after the date of acceptance. Each registrant must renew its registration with the commission not less than 90 days prior to the expiration date of the current registration

See our prior story here for our exclusive full analysis of the strawman