Archive for August 2007

News of Interest…


See No Evil? | Dallas Morning News | News for Dallas, Texas  
Dallas Morning News, Aug 30, 2007 -
From the start, the chairman of our state’s Public Utility Commission expressed misgivings about the proposed buyout of TXU. 
 
Oncor may seek rate increase next year | Dallas Morning News
Dallas Morning News, Aug 29, 2007 -
The filing from Oncor Electric Delivery Co. was in response to a rate review begun this spring by the Public Utility Commission of Texas.
 
Oncor won’t seek rate hike now 3:55 PM CT | Dallas Morning News
Dallas Morning News, Aug 28, 2007 -
would be “appropriate, supportable and justified,” said Oncor Electric Delivery Co., in a regulatory filing with the Public Utility Commission of Texas. 
 
 

Oncor’s rate case

Back in March, Docket 34040 was opened by Commission staff as a petition for the ”REVIEW OF THE RATES OF TXU ELECTRIC DELIVERY COMPANY.”  The purpose of the review is to determine
whether the existing rates of TXU Electric Delivery Company (TXU Electric Delivery) are unreasonable or in violation of the law. Commission Staff have stated that, based on their review of TXU Electric Delivery’s earnings, TXU Electric Delivery may be earning excess revenues on a company-wide basis in the amount of $80 million, or about 4% higher than Commission Staffs estimated reasonable revenue requirement. Commission Staff have also asserted that it would be advantageous to review TXU Electric Delivery’s costs prior to major ownership and organizational changes that TXU Electric Delivery has announced in order to establish a baseline to assess changes to TXU Electric Delivery’s cost resulting from the announced changes.
 
On May 25, 2007, TXU Electric Delivery was order to submit its rate filing package no later than August 28, 2007.

News of Interest: Commissioner Profiles

The Dallas Morning News, 8/26/7
Julie Caruthers Parsley keeps a large framed drawing in her office of a shining moment in her career: the day she argued a case before the Supreme Court. And lost.
The Dallas Morning News, 12:00 AM CDT on Sunday, August 26, 2007
‘Libertated’ by his employer after an opinion piece on Houston, he says he’s pursuing his real interests.

Paul Hudson Dallas Morning News News for Dallas, Texas …

The Dallas Morning News, Aug 26, 2007
Paul Hudson. Don’t make him the center of attention – or even snap his photo – but chat him up about policy.

W Power and Light is PowerOne?

Based on last week’s filings it appeared that Consulting Groups Network, LLC had asked for the DBA PowerOne on its REP application (docket 34363).  As mentioned, the website is up and running (www.poweronecompany.com).  Back on July 23, 2007, W Power and Light filed a REP application seeking to add the DBA PowerOne to its REP application.  On August 15, 2007, the Commission staff found the application deficient for many reasons including that another REP was currently attempting to use that DBA on a pending application, and as a result W Power could not use that DBA unless they provide documentation from the Texas Secretary of State demonstrating that the d/b/a name Power One, requested by another applicant in Docket No. 34363, has been forfeited by that Applicant.
 
In a filing today, W Power states that in asking for the DBA PowerOne that Power One is an additional DBA for W Power.  They state that “Another company is applying for a REP license under that name, and the name will be released when and if they are granted a REP license.
 
Well, I don’t know how the PUCT will respond, but certainly it seems that the website offering services under the name PowerOne is already operational.  So either Consulting Groups or W Power has a problem with using a name before its approved. 
 

News of Interest

On the Friday in February when news leaked of a record-breaking offer to buy TXU Corp., the company’s top government liaison met with the state’s top utility regulator to alert him of the deal.
 

Direct Energy Agrees to Pay $695,000 Settlement

Docket 34671 – APPLICATION OF COMMISSION STAFF AND DIRECT ENERGY LP FOR APPROVAL OF SETTLEMENT AGREEMENT

Commission staff filed this settlement agreement on Friday, August 24th.  The settlement resolves and concludes an investigation of Direct Energy related to the Commission’s substantive rules relating to
automatic renewal of service.

According to the settlement agreement, Direct Energy sent renewal notices to all small commercial customers whose contracts were about to expire. The notices offered to renew the contracts for a minimum term of at least one year, and would be effective if the customer did not take action by a specific, disclosed date. The notices included the appropriate Electricity Facts Label and Terms of Service document applicable during the term of the renewal product, including notice of an early cancellation fee. Each small commercial customer was also provided the opportunity to contact Direct Energy to decline the renewal offer without penalty. In 5,246 instances, a small commercial customer’s contract was renewed for a term of at least 12 months when the customer did not respond to the notice sent to the customer. Of those customers, 1,469 subsequently terminated service with Direct Energy and 3,777 customers continued to receive service from Direct Energy under the renewal offer.

Staff contends, but Direct Energy denies, that Direct Energy’s renewal process  violated PUC Substantive Rule 25.475(e)(2).  Staff concludes that Direct Energy and Staff interpreted Substantive Rule 25.475(e)(2) differently, and although Staff contends that Direct Energy’s interpretation of this rule was incorrect, Staff found no evidence of any willful or negligent violation.

Substantive rule 25.475(e)(2) states:

“A REP may utilize an automatic renewal clause.  Any service renewed through the activation of an automatic renewal clause shall be in effect for a maximum of 31 days and such clause may be repeatedly activated unless cancelled by the customer or unless the REP materially changes the terms of service.”

Unfortunately for Direct Energy, and TXU who paid a $5 million dollar settlement earlier this year on the same issue, the term “automatic renewal” is not defined in the rules. 
 
In a separate filing Friday, Direct Energy is seeking Commission approval for the settlement funds to be used for a Customer Education campaign targeted at Small Commercial Customers.

REP Appears to be Operating w/o a Certificate

I have been reading with interest the REP application for Consulting Groups Network, LLC (docket 34363).  The Commission staff had recommended denial of the application based on the expertise of key management personnel. 
 
As stated in staff’s filing:
 
“Specifically, the application identified Darwin Lau as the Chief Executive Officer (CEO) of PowerOne. Mr. Lau’s experience has been filed under protective order in this docket; however, his experience is available publicly in other Commission dockets.  Mr. Lau was previously employed by Texas Commercial Energy, LLC (TCE), which held REP certification in Texas from November 13, 2001 to May 11, 2005, when the REP certificate was transferred to Bridgepoint Power & Light, LLC (BPL). TCE filed for chapter 11 bankruptcy protection on March 6, 2003. TCE emerged from bankruptcy under a plan of reorganization (POR) in December of 2003. Mr. Lau joined the company as its Chief Financial Officer (CFO) on July 8, 2003 and remained employed by TCE through March 3 1, 2005. Mr. Lau’s stated responsibility during his tenure as CFO of TCE was to manage the reorganization of the company. The company was liquidated in or around May of 2005, without having satisfied the terms of the POR and having paid its major creditors, including the Electric Reliability Council of Texas (ERCOT). Staff believes that ERCOT, as the major creditor, absorbed approximately $5,000,000 in unpaid charges for energy services.  Mr. Lau was named the CFO of BPL at or near inception (March 4,2005) and sponsored BPL’s application to the Commission for approval of the transfer of TCE’s REP certificate to BPL, filed in Docket No. 30856 and approved by the Commission on May 11, 2005. A petition to revoke the REP certificate of BPL was filed by Centerpoint Energy Houston Electric, LLC on July 25, 2006, joined later by other transmission and distribution service providers (TDSPs) and ERCOT, in Docket No. 32988. The focus of the petition was the default on the financial terms of TDSP tariffs, and Qualified Scheduling Entity (QSE) and Load Serving Entity (LSE) agreements with ERCOT. The final order in Docket No. 32988 concluded that BPL:
  • failed to comply with P.U.C. Subst. R. 25.107(f)(l)(A)(iii), which provides the basis for ongoing financial qualification to hold a REP certificate;
  • violated P.U.C. Subst. R. 25.214(d)(l) by failing to comply with the terms and conditions of Centerpoint’s Tariff, TXU’s Tariff, and AEP’s Tariff, all of which required that payment for all Delivery Charges be made within 35 calendar days after the date of transmittal of the invoice;
  • violated ERCOT protocols, defaulted on payments to ERCOT, and failed to cure the default; and
  • failed to comply with P.U.C. Subst. R. 25.107(f)(2), which requires that REPs maintain sufficient cash to cover all deposits and advance payments, and that REPs refund all obligations to customers within 30 days of notifying the commission of its intent to withdraw its certification.
 
BPL’s REP certification was revoked, and BPL was ordered to distribute its remaining assets, if any, to customers, TDSPs, and ERCOT. The final order indicates that BPL had approximately $30,000 in remaining assets, compared to $491,210 owed to TDSPs and ERCOT and $266,227 owed to customers. BPL was ordered to file a report within 120 days detailing the repayment of obligations to TDSPs, ERCOT, and customers. BPL did not comply with this requirement.”
 
In response to staff’s recommendation, Consulting Group Network has asked for and been granted a hearing on their application.  The hearing is ongoing.
 
But they appear to be operating now…
So I visited the the company’s website — www.poweronecompany.com.  It states in the “About Us” section…
 
PowerOne is based in Dallas TX and has a branch office in Harlingen, TX in the Rio Grande Valley. 
PowerOne has a marketing agreement with W Power & Light, a Retail Electric Provider in Texas (REP License 10093), to sell you electricity on a prepaid basis.  PowerOne does not check credit, or require social security number, or ask for a deposit in order to enroll you as a customer.  You need to pay an initial estimated amount to begin your service with PowerOne.  To continue your service, you need to make on time payments as invoiced by PowerOne.  You may cancel your service at any time without penalties, and there is no long term commitment that obligates you to staying with PowerOne for any extended period of time.  We want to keep you as a customer with our good service and fair price, not with legal bindings.
 
Pursuant to substantive rule 25.107, a person must be certificated as a REP if the:
 
“Persons who purchase, take title to, and resell electricity must register as REPs. Persons who do not purchase, take title to, or resell electricity, but perform a service pursuant to a contract with the REP do not need to become certificated as REPS.”
 
It certainly appears that if PowerOne is invoicing customers they are reselling electricity purchased from W Power & Light and are doing so without having a REP certificate.
 
It will be interesting to see how this all shakes out.

Oh, TXU. Shame on you.

By April Powell, Pegasus News
Yesterday afternoon, a man in a blue TXU shirt rang my doorbell and beckoned me out into the heat to speak to him (presumably to avoid the 100-pound dog barking behind my door). Holding his clipboard in hand, the man introduced himself as a TXU “regional manager” Chad Maddox. He stated that was visiting me because I am a good, longtime TXU customer, who had stayed with the company even when its rates were high.
 

Training on the New Prepaid Rule — 25.498

Understanding the New Prepaid Rule — 25.498
A Workshop Offered by Regulatory Compliance Services
Dallas, TX – September 10, 2007 – 1:00 p.m. to 4:00 p.m.
Prepaid electricity offers significant advantages to both providers and customers.  Providers can manage credit risk and reduce working capital.  Customers can budget power purchases and customize service.  With deployment of advanced metering technology coming, and other options now available, many Retail Electric Providers are exploring Prepaid Electricity. What are the provisions of this new rule and how does it affect the current prepaid services being offered in Texas? 
 
       
 

Session Overview:

Prepaid providers have existed almost from day one in the Texas electric market.  How does that model work and how does it compare with the models now covered under §25.498?  What are the advantages and disadvantages of both prepay models?  

 

Following this session you will:

·         Understand the recently adopted prepaid electricity rule — §25.498.

·         Understand the operational considerations in using the prevalent prepaid models currently in use and their regulatory limitations.

 

Topics include:

·         Benefits of Prepaid Electricity

·         Existing Model (Firefly, Freedom, et al)

·         Practical Challenges in the Existing Model:

o        Scheduling/Profiling

o        Business Procedures

·         Understanding the New Model — §25.498:

o        Requirements

o        Protections

 

Who Should Attend:

Staff responsible for:  Business Strategy, Regulatory Policy, Marketing, and Customer Service.

News Clips

News Clips of Interest…

TXU promises may come up empty
By Janet Elliott, San Antonio Express-News, 08/17/07
The Public Utility Commission on Thursday said it lacks authority to hold investors buying Dallas-based TXU to their stated promises to reduce electric bills and build fewer coal plants.

By JANET ELLIOTT : Copyright 2007 Houston Chronicle Austin Bureau 08/17/2007
Bills that would have given the commission final say over the TXU deal died in the legislative session.

DirecTV plans to offer high-speed Internet, telephone, to North Texans

By Barry Shlachter, Fort Worth Star-Telegram
The overheated broadband market will likely get even hotter by early 2008 with the introduction of a new service delivered over electric power lines.

Using TXU infrastructure, residents in an affluent area just north of downtown Dallas including Lower Greenville, Highland Park and University Park will be offered DirecTV-branded high-speed Internet and voice-over-Internet telephone services either at the end of the year or early 2008, said Brendan Herron, a vice president of Current Group, which is installing the technology.

Few critical care clients make CenterPoint’s priority list: Company’s criteria are found to be stringent and frustrating
Aug 16 – McClatchy-Tribune Regional News – Alexis Grant Houston Chronicle
Power outages at Don Corolla’s house are more than an inconvenience.