Archive for June 2015

Now that’s how you hold a vendor accountable!

Kudos to AEP Energy for filing suit against a vendor for alleged do-not-call violations.  As I have said before, regulators hold the certificated entity responsible for compliance with laws.  If the certificated entity outsources a function to the vendor, it is still ultimately the certificated company, and not the vendor, that is on the hook for complying with regulations.  The recourse for the certificated entity — make your vendor financially liable for any enforcement penalties caused by their actions.

Read a good summary here:

Direct Energy Prepay Service to Pay Administrative Penalty

A settlement agreement filed in docket 44833 between Direct Energy and the PUCT staff would have Direct Energy paying an administrative penalty of $220,000 to resolve alleged violations of the PUCT’s prepaid rules related to disconnection of service.  As cited in the settlement agreement, it appears Direct Energy’s systems allowed disconnect orders to be sent to the market during extreme weather events, which is contrary to commission rules.

While the settlement agreement states that the investigation only related to issues surrounding disconnection of service, it would appear the PUCT’s investigation was undertaken in direct response to a Petition for Investigation into Direct Energy’s Prepaid Electricity service plans filed on May 19, 2014 by Texas Ratepayer’s Organization to Save Energy (Texas ROSE).  In their petition, Texas ROSE claimed argued that the PUCT should investigate Direct Energy for the following types of alleged violations:

  1. Automatically placing switch holds on accounts with deferred payment plans without seeking affirmative customer consent as required by PUCT rules.
  2. Disconnecting service immediately prior to an extreme weather event, which “may technically be in compliance with the literal words of the PURA but not the statute’s intent.”
  3. Failure to timely deliver disconnect warning notices due to chronic communication problems in major cell phone systems.
  4. Enrollment of critical care customers on prepay service plans in violation of PUCT rules.
  5. Use of the analogy that “prepaid service is like putting gas in a car is inaccurate” and misleading in violation of PUCT rules.
  6. The risk of disconnection is not being fully explained or is being minimized at time of enrollment.

The PUCT never took formal action on the Texas ROSE petition, which is consistent with their practice.  However, given this agreement, it is clear the PUCT did investigate DE’s prepaid service.  I would also find it hard to believe that the scope of such investigation was limited to just disconnect issues.  As a result, perhaps this provides some closure to the issues raised by Texas ROSE.