Texas PUC Staff Recommend $1.74 Million Penalty Against TDU For Alleged Violations Of Customer Metering & Billing Practices

The Public Utility Commission of Texas said in a news release today that, "The Public Utility Commission of Texas’ (PUCT) Division of Compliance and Enforcement (DICE) today is recommending the Commission impose an administrative penalty of $1,747,400 for violations relating to Texas-New Mexico Power Company’s (TNMP) usage estimating practices."

A Staff report details the alleged violations. The Commission has made no finding with respect to any stated findings of the Staff report or alleged violations

"A PUCT investigation found the transmission and distribution utility (TDU) violated 16 TAC § 25.241(b) and 16 TAC § 25.214(c) by not adhering to its tariff filed with the PUCT, which includes provisions on electric meter reading accuracy. The recommendation asserts that TNMP violated rules related to accurate meter reading because it failed to make necessary changes to its advanced metering system," the Public Utility Commission of Texas said in a news release.

The alleged violations result from the 3G sunset, as TNMP used 3G for communication with certain meters as part of its AMI system. See background here

Among other things, the Staff report alleged, "TNMP violated sections 4.7.2 and 4.7.2.2 of its tariff 17,474 times between January 1, 2022 and December 31, 2022 by estimating meter readings for periods greater than three consecutive months."

The Staff report alleges, "extended periods of estimated meter readings create a potential economic hazard for the retail electric providers serving the customers in TNMP's service area. Unpredictable and unreliable billing based on prolonged periods of estimated meter reading can cause confusion and consternation for the REPs' customers, which can lead to the REP experiencing an increase in unpaid bills, deferred payment plans, and other types of delays that could constrain the REP's cash flow or harm the REP's reputation."

Staff also alleged, "The estimates also resulted in some customers not receiving the benefits of their REP's retail plans. For example, one customer reported she received bill credits if she used over 1,000 kWh a month. TNMP estimated the usage too low and so she was not receiving the credits. TNMP adjusted the previous estimates after the customer submitted her complaint resulting in one service period having over 1,000 kWh."

"The investigation found the utility had three-years’ notice that the communication backbone of its metering system was going to be discontinued by a third-party provider; yet it did not devise a plan until halfway through that timeframe. Additionally, TNMP could have developed a back-up mitigation plan in case its vendor was unable to provide more than 170,000 new meters in time to avoid the foreseeable communications failures," the Public Utility Commission of Texas said in a news release

"This resulted in prolonged, inaccurate estimations of power consumption for thousands of its customers, in violation of PUCT rules," the Public Utility Commission of Texas said in a news release

"TNMP may provide written acceptance of the determination of violation and recommended penalty or request a hearing within 20 days after service of notice of the report on violations. Failure to timely respond to the notice will result in the Commission approving by order the determination of violation and recommended penalty," the Public Utility Commission of Texas said in a news release

Docket No. 54731