Utility Parent To Sell Texas Retail Provider (Without Brand Name), Or Wind Down REP, As Part Of Stipulation To Acquire Texas Utility
Stipulation For TDU's Parent Merger Includes Retail Rate Credit Implemented Through REPs
March 30, 2021 Email This Story Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • email@example.com
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A unanimous stipulation has been filed with the Texas PUC that would approve, subject to various conditions, the merger of the parent of Texas-New Mexico Power and Avangrid
The stipulation was signed by the applicants, PUC Staff, OPUC, the Alliance for Retail Markets, the Texas Energy Association for Marketers, Texas Industrial Energy
Consumers, and several other parties
Notably, the stipulation provides that, "Within six (6) months of the closing of this Proposed Transaction, neither Iberdrola
nor Avangrid will own or control any customer facing competitive affiliates in
ERCOT including retail electric providers, brokers or aggregators."
Currently, Iberdrola, the ultimate parent of Avangrid, also owns retail electric provider Iberdrola Texas
The settlement provides that, "Within six (6)
months of the closing of this Proposed Transaction, Iberdrola Solutions LLC dba
Iberdrola Texas will either file an application with the PUC to voluntarily relinquish
its retail electric provider certificate or transfer its certificate to an unaffiliated third
Notably, the stipulation provides that, "Iberdrola Solutions LLC dba Iberdrola Texas will not convey the name, logo or
other brand identifying feature such as color scheme or font style to any third party."
"If ever Iberdrola or Avangrid were to seek to own or control any customer facing
competitive affiliates in ERCOT including retail electric providers, brokers or
aggregators, they would need prior Commission approval and would agree not to have
any such competitive affiliates engaged in such activities within TNMP’s service
territory," the settlement provides
The stipulation also includes the following provisions of note to the retail market:
• Separate Name and Logo – TNMP will maintain an identity, name, and logo that is
separate and distinct from the identity, name, and logos of Avangrid, Iberdrola, and
any current and future retail electric providers, wholesale generation companies, and
other Texas competitive affiliates of TNMP. To remain separate and distinct, TNMP’s
logo will not include the name, logo, or any other brand-identifying features of any
Avangrid or Iberdrola retail electric providers, wholesale generation companies, or
any other current or future Texas competitive affiliate of TNMP. Notwithstanding the
foregoing, the Avangrid name and logo can be added to the TNMP name and logo for
branding purposes (e.g., "An Avangrid Company") provided that no current or future
competitive affiliate with operations in Texas adds the Avangrid name, logo, or other
brand-identifying features for branding purposes. No Avangrid or Iberdrola retail
electric providers, wholesale generation companies that operate in Texas, or any other
current or future Texas competitive affiliate of TNMP will use the same name,
trademark, brand, logo, or any other brand-identifying features such as color scheme
or font style as are used by TNMP. TNMP will not otherwise engage in joint
marketing, advertising, or promotional activities with any Avangrid or Iberdrola retail
electric provider, broker, aggregator, wholesale generation company that operates in
Texas, or any other current or future Texas competitive affiliate of TNMP, in a manner
that is inconsistent with the Public Utility Regulatory Act and the Commission's rules.
• Code of Conduct – TNMP will file with the Commission for authority to amend and
update its code of conduct to incorporate all applicable conditions and limitations on
affiliate transactions required by these regulatory commitments.
• TNMP Competitive Affiliate Commitment – TNMP will comply with all requirements
in PURA and Commission rules governing all aspects of any relationship and dealings
between TNMP and all competitive affiliates.
• No Recovery of Affiliate REP Bad Debt – To the extent that any retail electric provider
is affiliated with TNMP, TNMP will not seek to recover from its customers any costs
incurred as a result of a bankruptcy of any such affiliate.
The stipulation also provides for a rate credit, under which TNMP will provide a direct financial benefit to TNMP wholesale and
retail customers in the form of a $16.2 million rate credit to electric delivery rates
payable over three years following closing of the Transaction.
All customer classes will receive the retail rate credit on a kWh basis using
an existing SAC04 code in the standard electronic transaction for each
The stipulation provides that, "This credit to retail customers shall be implemented by retail electric
providers (REPs) in accordance with the customer’s terms of service, and
TNMP commits to working in good faith with affected REPs to determine an
acceptable method for implementation of such electric delivery rate credits
to implement this commitment."
The effective date of the retail rate credit shall coincide with the effective date of the next adjustment to TNMP’s
TCRF after the closing of the Transaction.