Volunteer Energy Services Finds Buyer For Part Of Book Outside Of Auction Process, Purchase Price Disclosed -- EnergyChoiceMatters.com

Volunteer Energy Services Finds Buyer For Part Of Book Outside Of Auction Process, Purchase Price Disclosed

Notes Attempts By Competing Suppliers To Switch Its Customers; Warns It Will Pursue Automatic Stay Violations If Brokers Are Shopping Customers In Violation Of Contract

April 5, 2022

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Reporting by Paul Ring • ring@energychoicematters.com

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Volunteer Energy Services has entered an asset purchase agreement with NRG Retail LLC for a portion of Volunteer's customer book, specifically, certain non-aggregation choice natural gas contracts in the States of Ohio and Michigan

The APA describes the purchase price as follows:

"The purchase price for the Assigned Contracts and the assumption of the Assumed Liabilities shall be equal to $75 multiplied by the number of RCEs represented by all Customers accounts corresponding to an Assigned Contract for which there is an Assignment Date that: (i) go on-flow as served accounts of Buyer for retail natural gas service for at least thirty (30) days after the applicable Assignment Date, (ii) are without a pending drop market transaction within those thirty (30) days and (iii) did not have a usage greater than (x) for fixed gas accounts, one hundred (100) RCEs or (y) for variable gas accounts, five hundred (500) RCEs (the 'Purchase Price'), provided that, in no event shall the Purchase Price be less than Two Hundred Fifty Thousand Dollars ($250,000) (the 'Minimum Purchase Price')."

A court filing further describes the purchase price as follows:

Purchase Price: The purchase price for the Assigned Contracts and the assumption of the Assumed Liabilities shall be equal to the sum of the Account Values for each Customer account corresponding to an Assigned Contract for which there is an Assignment Date, provided that, in no event shall the Purchase Price be less than Two Hundred Fifty Thousand Dollars ($250,000) plus the following Assumed Liabilities:

a. any performance obligations of Seller (as provider under the Assigned Contracts) first arising on or after the applicable Assignment Date under the Assigned Contracts, to the extent relating to the period on or after the applicable Assignment Date;
b. all Cure Costs obligations, as set forth in Section 5.08 of the APA; and
c. all Liabilities for Taxes attributable to the ownership or use of any of the Assigned Contracts on or after the applicable Assignment Date

"The Sale is a private sale. No auction is contemplated. To the extent the Debtor receives an additional proposal in writing on or before the objection deadline, the Debtor will consider the terms of any such competing offer in order to determine whether such offer represents a viable option that is a higher and better bid for the assets. In the event that such an alternative offer is received, the Purchaser has retained the right to offer a further, competitive bid," Volunteer said in a court filing

The accounts included in the book sale are further described as follows:

(i) As of the date hereof, Schedule 2.07(b) lists each Customer account corresponding to Assigned Contracts, including each unique account identifier, as has been made available to Buyer to correspond with the Customer account’s specific Account ID and ViewID.
(ii) The Parties shall, within five (5) Business Days following the end of each calendar month following the Closing, commencing on May 31, 2022 and ending on September 30, 2022, revise Schedule 2.07(b) to:

(A) (1) identify each Customer account that during the preceding calendar month achieved the thirty (30) day anniversary of its Assignment Date and, as of such anniversary, (a) remained enrolled with Buyer, (b) did not have a pending drop market transaction and (c) did not have a usage greater than (x) for fixed gas Customer accounts, one hundred (100) RCEs and (y) for variable gas Customer accounts, five hundred (500) RCEs; (2) provide the calculation of the RCEs associated with such account and (3) the price to be paid by Buyer for each such Customer account (such amount to be the product of $75 multiplied by the number of RCEs represented by such Customer account, which is referred to herein as the “Account Value” for such Customer account); and
(B) remove any Customer account from Schedule 2.07(b) (1) that is no longer able to be enrolled with Buyer (including because Seller is unable to provide Enrollment Data) for reasons other than: (x) the breach by Buyer of its obligations under the Transaction Agreements, (y) Buyer’s failure to be properly licensed or enabled with the applicable utility or local distribution company in such a manner as may be required to receive assignment of any such account, or (z) Buyer (or its Affiliate) having entered into a Contract with a Customer affiliated with the removed account for the same account or location as covered by such Customer’s Assigned Contract, which such accounts shall be separately identified, and corresponding RCEs provided, on Schedule 2.07(b), or (2) related to which Seller has determined in good faith it could incur further liabilities, including commodity or supply costs, fines or penalties, following the Execution Date. For the avoidance of doubt, a Customer account may be considered “no longer able to be enrolled with Buyer” even after the Assignment Date has occurred if on the thirty (30) day anniversary of the Assignment Date, the Customer account is either no longer enrolled with Buyer or there is a drop market transaction pending. In no event, however, shall a Customer account be removed from Schedule 2.07(b) if a drop market transaction is filed, or the Customer account is otherwise un-enrolled with Buyer, on a date following the thirty (30) day anniversary of the Assignment Date.

In a court filing, Volunteer said, "The Debtor has been made aware that Alternative Suppliers may be attempting to enroll the Debtor’s Customers. Certain of the LDCs have informed the Debtor that they will not prevent Customers from being enrolled with Alternative Suppliers, including through a mass enrollment to standard choice offer (SCO) providers or providers of last resort. If such enrollments occur, the process is irreversible."

"It is unclear how Alternative Suppliers are identifying the Debtor’s Customers. To the extent that the Debtor’s brokers are 'shopping' the Debtor’s Customers in violation of their broker agreements with the Debtor, the Debtor intends to pursue such brokers for automatic stay violations," Volunteer said

In Ohio, certain of the contracts are to be transitioned to NRG's Direct Energy brand

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