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Retail Supplier Seeking To Enter Texas Market Requests Waiver Of Rule Prohibiting Leaders Of Previously Defaulted REPs From Controlling A REP
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Energywell Texas, LLC, a newly formed entity but part of the Energywell family of companies, applied for an Option 1 Texas retail electric provider certificate
In doing so, Energywell Texas, LLC noted that certain of its principals -- namely Michael Fallquist, Roop Bhullar, and Christian McArthur -- were
principals of Griddy Energy, LLC, which was subject to an involuntary mass transition of its customers to POLRs in the wake of Winter Storm Uri, and which had its ERCOT market participant rights revoked
Among other things, 16 TAC § 25.107(g) provides that a REP may not be controlled by an individual who, within 6 months prior to the relevant event(s) occurring, was a principal at a REP which either (1) experienced an involuntary mass transition, (2) had its ERCOT standard form market participant agreement terminated, or (3) exited a market with outstanding financial obligations that remain outstanding
Energywell Texas, LLC sought a waiver of 16 TAC § 25.107(g) under 16
TAC 25.3(b), which Energywell Texas, LLC said allows the PUC to make exceptions to the rules in Chapter 25 for good
cause.
Energywell Texas, LLC volunteered to make several commitments if the waiver were granted
Energywell Texas, LLC proposed that, for the first two years of operations in Texas, Energywell would report to PUC
Staff on a quarterly basis on enrollment numbers, complaint history in Texas, financial standing, and
overall operations of the company in Texas. In addition, Energywell representatives would meet with the
PUC Staff on a quarterly basis to discuss the report and address any concerns
or questions the Staff may have.
Energywell Texas, LLC committed that, in addition to the personnel relied upon to meet the 15-year experience requirement under the PUC rules, Energywell will
maintain on staff at least two employees with decision-making authority to oversee regulatory and
operational issues in Texas, both with a minimum of five years’ experience in the Texas market
addressing matters governed by Subchapter R of the Commission rules, including customer
complaint procedures and timelines.
Energywell Texas, LLC committed that, after its first year of operations, and for the following two years, Energywell will maintain
shareholder’s equity, a letter of credit, and customer deposit protection at a level at least 10% more
than what is required by 16 TAC § 25.107(f).
"Applicant believes that the unprecedented circumstances surrounding the events related to
Winter Storm Uri, and the actions taken in response by the principals of this Applicant during that
time, provide the good cause required to grant the requested waiver," Energywell Texas, LLC said
Energywell Texas, LLC said, "Just nine weeks prior
to Winter Storm Uri -- on December 4, 2020 -- Messrs. Fallquist, Bhullar, and McArthur became
executives of Griddy through a business combination. Prior to this time, these three principals were
executive officers of Crius Energy for many years, a publicly-listed retail energy provider that served
more than one million customers at its peak, including customers in Texas under the TriEagle Energy
brand. Prior to Crius Energy, these three principals held senior operating positions at several other
retail energy providers and have many decades of collective retail energy experience. Ironically,
Griddy’s application to amend its retail electric provider to approve the new management team was
not approved until February 26, 2021, after Winter Storm Uri and the events that it precipitated."
"Applicants, new members of Griddy’s team at the time, made immediate efforts to improve its
product for Customers’ benefit. Griddy’s residential wholesale index model provided Griddy
customers with valuable data to curtail their energy usage during high-price environments. As noted
above, this model allowed Griddy customers to save $17 million in electricity costs in the three years
prior to Winter Storm Uri. Importantly, Griddy’s business model was compliant with all applicable
laws and regulations and had been in place since the Company’s certification in 2017. Despite all of
this, Applicants, who were brand new to Griddy at the time, quickly realized that Griddy’s product was more vulnerable than other products to the price spikes a storm such as Uri could produce. Weeks prior to Winter Storm Uri, and only a few weeks after taking their posts, Griddy’s principals
announced plans to roll out a fixed-price option for customers who wished to protect against
potential seasonal price volatility. Griddy was set to begin enrollment in this program on March 1.
Unfortunately, Uri struck two weeks before that time," Energywell Texas, LLC said
"Before, during, and after Winter Storm
Uri, Griddy’s management team demonstrated that it possessed the technical skills required to
foresee the dangers Winter Storm Uri presented and the managerial ability to take actions to mitigate
the impact of the storm on its customers as best as possible. The executives of Griddy were caught
in an unfortunate position not of their making. Their actions do not show a lack of technical or
managerial expertise or capability nor do those actions evidence any wrongdoing on their part. To
the contrary, the actions taken by Griddy’s principals showed that they have the managerial
wherewithal to navigate the company through unexpected situations, all the while keeping the best
interests of its customers in mind, and working to steer the situation toward the best possible
outcome during a situation with no good outcomes," Energywell Texas, LLC said
"Prior to Wintner [sic] Storm Uri, in the days leading up to February 15, 2021, Griddy
emailed customers information to warn them about the impending storm, the expectation of high
electricity prices and extreme price volatility, and to provide them with information about switching
electricity providers. Griddy also urged its customers via email, text, and robocalls to switch
electricity providers. As a result of Griddy’s proactive outreach efforts, nearly 10,000 customers
(representing more than one-third of Griddy’s customer base) switched to another provider before
the catastrophic market failure on February 15, 2021," Energywell Texas, LLC said
"As the market fell prey to Winter Storm Uri, the Griddy management team made an unprecedented
move and contacted ERCOT on February 16, 2021, to seek relief for its customers by switching them
to another provider in a mass transition event. ERCOT was unable to accommodate Griddy’s request," Energywell Texas, LLC alleged
"On March 15, 2021,
Griddy’s management team had no choice but to file for Chapter 11 bankruptcy protection. In so
doing, Griddy’s management team again sought to protect its former customers and presented the
bankruptcy court with a plan that would provide complete relief for Griddy’s former customers who
were unable to pay their electricity bills resulting from the unprecedented wholesale prices. In just
under four months’ time, the bankruptcy court confirmed Griddy’s plan of liquidation -- including the
full releases for Griddy’s customers -- and praised Griddy for its efforts to protect its customers during
the unfortunate circumstances that led to its ultimate demise," Energywell Texas, LLC said
Energywell Texas, LLC said that its principals have
been operating a retail supplier in twelve other states and the District of Columbia without
incident since November 2022, when Energywell Texas, LLC's ultimate parent, Energywell Parent, LLC, completed an acquisition of ENGIE Retail, LLC d/b/a Think Energy. As previously reported, the Energywell management team, mindful of the provisions in 16 TAC § 25.107(g),
immediately divested Think Energy’s Texas customers (to MI Texas REP 2, LLC) and relinquished its Option 1 Texas REP certificate
"Griddy ran into financial problems not because of mismanagement, carelessness, or the inability to
navigate through an unforeseen situation. Nor were Griddy’s principals bad actors. Rather, Griddy
met its fate because of a unique set of circumstances that had an unprecedented effect on the
wholesale electric market in Texas, including multiple bankruptcies of REPs and cooperative electric
utilities. Now, the Griddy management team are prohibited from controlling a REP in Texas even
though Griddy was a well-run company, saved Texans millions of dollars, and took extraordinary
measures to do everything it could do to protect its customers from an uncontrollable and
unprecedented situation," Energywell Texas, LLC said
Energywell Texas, LLC touted that, if a waiver were granted, it would roll out its proprietary software to customers geared toward creating a demand response program
"Energywell’s product provides a valuable tool for retail consumer demand response, through a
fixed-price product. If the requested wavier is granted, Applicant will offer competitively-priced,
fixed-rate products to Texas customers, and it will roll out its proprietary software to customers
geared toward creating a demand response program, something that has become increasingly
important in Texas," Energywell Texas, LLC said
"Applicant’s technology will reward customers – in the form of a cash rebate -- for
doing behaviors in times of peak demand on the grid that will ease the strain on the grid and save
customers money at the same time. The technology enabling this software has been deployed
previously -- and successfully -- with retail electricity customers, empowering users to reduce their
consumption, with as much as a 20% load reduction during some peak times," Energywell Texas, LLC said
Energywell Texas, LLC did not seek authorization to use any trade names
As previously reported, the wholly separate entity MI Texas REP 2, LLC (to which, as noted above, Think Energy divested its Texas customers when Energywell acquired Think Energy) uses (or is authorized to use) certain trade names associated with the Energywell companies in other markets -- namely Think Energy and Fanfare Energy. MI Texas REP 2, LLC is not under the control of Energywell or Energywell's principals
Energywell Texas, LLC sought authority to collect customer deposits and prepayments.
Docket 56651
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Touts Proprietary Software To Create Demand Response Program For Its Texas Retail Customers
May 23, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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