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AEP Retail Energy Seeks Dispositive Ruling on Use of Shared Name by TDU, REP in Texas

August 5, 2011
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AEP Texas Commercial & Industrial Retail Limited Partnership asked the PUCT that, prior to referring its application for a REP certificate amendment to the State Office of Administrative Hearings, an ALJ rule on a threshold legal question regarding the ability of competitive affiliates to use a shared name with a TDU (39509).

As only reported by Matters, AEP Texas Commercial & Industrial Retail Limited Partnership, which also markets as AEP Retail Energy and AEP Plus, is seeking a REP certificate amendment to serve retail customers in ERCOT with demands less than 1 MW. The application has been protested by several REPs, who have argued that allowing a REP to compete in the mass market with "AEP" as part of its name will confuse customers (7/26).

As recommended by Staff, the time to review the application has been extended to permit a hearing (8/1), though an order referring the case to SOAH has not yet been issued.

AEP Texas Commercial & Industrial Retail Limited Partnership is specifically seeking a ruling on whether PURA Section 39.157(d)(5)(B) "expressly allows" the use of a shared term in the names of a Transmission and Distribution Utility and its competitive REP affiliate. If this question were resolved in AEP Commercial & Industrial Retail Limited Partnership's favor, AEP Commercial & Industrial Retail Limited Partnership argued that the answer would be dispositive to the case, and require its amendment application to be granted as requested.

PURA Sec. 39.157(d)(5)(B) provides that the PUCT shall develop rules to ensure that a utility does not, "allow a competitive affiliate, before September 1, 2005, to use the utility's corporate name, trademark, brand, or logo unless the competitive affiliate includes on employee business cards and in its advertisements of specific services to existing or potential residential or small commercial customers locating within the utility's certificated service area a disclaimer that states, '(Name of competitive affiliate) is not the same company as (name of utility) and is not regulated by the Public Utility Commission of Texas, and you do not have to buy (name of competitive affiliate)'s products to continue to receive quality regulated services from (name of utility).'"

AEP Texas Commercial & Industrial Retail Limited Partnership said that this language, "expressly contemplates that a TDU and its competitive affiliates can and will share a common name or trademark."

Furthermore, AEP Texas Commercial & Industrial Retail Limited Partnership said that claims that the use of the AEP name by a mass market REP would be confusing can not supersede PURA.

However, while such shared use of a trade name is contemplated in PURA, AEP Texas Commercial & Industrial Retail Limited Partnership cites no provisions in PURA granting a competitive affiliate a unilateral right to share a trade name with a TDU, or any provisions which explicitly limits the Commission in this regard.

While AEP Texas Commercial & Industrial Retail Limited Partnership said that the PUCT Substantive Rules relating to misleading REP names cannot supersede PURA, this ignores that protestors in the case rely not only on the Substantive Rules' prohibition on misleading names, but PURA's own provision stating that the Commission "shall ensure" customer protections are put in place to ensure that customers are, "entitled ... to be protected from unfair, misleading, or deceptive practices." [Sec. 39.101]

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