Property Manager Enters $120,000 Settlement With Texas PUC Staff Over Alleged Sale Of Retail Electricity Without REP Certificate

February 26, 2024

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Specialized Property Management, Inc. (SPM) would pay $120,000 under a settlement with Staff of the Public Utility Commission of Texas to resolve SPM's alleged violations of PURA1 §§ 17.004(a), relating to customer protection standards; 39.102, relating to customer choice; 39.107, relating to metering and billing services; and 39.352(a), relating to certification of retail electric providers; 16 Texas Administrative Code (TAC) §§ 25.107(a), relating to certification of retail electric providers; and 25.475, relating to general retail electric provider requirements and information disclosures to residential and small commercial customers

SPM manages 1,170 single family properties and 58 multi-family properties with individually metered rental units in Texas.

The settlement states, "In December of 2020, SPM enacted a program advertised and sold by a third-party utility management service whereby SPM was named as the account holder for electric service to be provided to both the individually metered homes and multi-family homes. In total, SPM became the direct or indirect customer of record by way of the third-party utility management service for 577 single-family homes and 25 units that were considered multi-family units."

The settlement states, "As the direct or indirect customer of record by way of the third-party utility management service, SPM purchased and took title to the electricity provided at the affected rental properties, controlled the electric accounts for the affected rental properties, and billed tenants for their electricity usage, either directly or through a third-party billing service, with no adjustment or increase in rates from the original provider."

The settlement states, "While the affected properties were enrolled in the utility management program, customers were unable to switch providers to a REP of their choice, although SPM billed the services to tenants directly at the rates charged by the original provider and without adjustment or increases in rates."

The settlement states, "Beginning in December of 2020, SPM denied its tenants the right to choose their own REP, in violation of PURA §§ 17.004(a)(2), 39.102(a), and 39.107(c)."

The settlement states, "Because SPM purchased electricity from a separate REP and subsequently resold electricity to the end use consumer, its tenant, SPM acted as a REP. SPM violated PURA § 39.352 and 16 TAC § 25.107 because it failed to obtain the required REP certificate."

The settlement states, "SPM terminated its relationship with the third-party utility management service and has worked to discontinue the practice on an ongoing basis. SPM has further agreed that within thirty (30) days of an Order adopting the terms of this Agreement, it will discontinue its practice of taking title to electricity and reselling to its tenants, effectively acting as an uncertificated retail electric provider (REP) and interfering with its customers legally mandated right to choose their own REP."

The settlement states SPM began the transition and discontinuation of its utility management program in the summer of 2022. All new SPM tenants now receive electric service in their own name from a REP of their choice.

The settlement states, "On September of 2022, SPM began the process of discontinuing its utility management program. SPM has been actively working with its tenants to transition them to being customers of record and choosing their own retail electric service. That process has included SPM emailing, calling, and texting tenants since 2022 and additionally offering financial incentives to aid in and escalate the transition. This process is ongoing and began even before PUC’s involvement. Within thirty (30) days of an Order adopting the terms of this Agreement, SPM will fully cease acting as a REP, and SPM will no longer provide retail electric service to any of its customers."

The settlement states, "This agreement represents a compromise of claims and allegations, and the execution of this agreement does not admit the truth or accuracy of any such disputed claims."

Docket 56242

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