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Texas ALJ Questions Whether Retail Provider May Use Name Previously "Approved" For Another REP, Even Under Brand Assets Acquisition, Citing Rule's Language
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A Texas PUC ALJ has questioned whether a retail electric provider may use a name previously "approved" for use by a separate REP, even in cases where the REP's new use of a name previously authorized for a different REP is pursuant to a brand assets acquisition among the relevant REPs
The ALJ's novel concern arises in a proceeding in which Rhythm Ops, LLC is seeking to add the trade name "Energy Texas" to Rhythm's REP certificate. As first reported by EnergyChoiceMatters.com, Rhythm Ops, LLC previously entered into a brand assets acquisition with Declaration Energy to acquire the brand name Energy Texas
An initial hurdle in Rhythm's filing for a REP certificate amendment to add the trade name Energy Texas to the Rhythm certificate was awaiting completion of a proceeding in which Declaration Energy filed an amendment to remove the trade name Energy Texas from the Declaration Energy certificate (with such Declaration Energy proceeding further delayed by Declaration Energy's subsequent, separate petition for relinquishment of its REP certificate, and TDUs' concerns about granting relinquishment given outstanding amounts owed by Declaration to the TDUs, etc., (see details here)
The PUC eventually on August 6 granted Declaration Energy's application to amend the Declaration Energy REP certificate to remove the trade name "Energy Texas" from the Declaration Energy REP certificate, allowing consideration of the Rhythm REP certificate amendment to proceed
However, an ALJ has now raised a new issue in considering Rhythm's application to use the trade name Energy Texas, and sought briefing on the issue
Specifically, the ALJ noted that the REP certification rules, at TAC § 25.107(d)(2)(B)(i), provide that a REP's business name shall not be, "duplicative of a name previously
approved for use by a REP certificate holder." [emphasis added]
The ALJ is "unsure" as to whether relinquishment of a trade name by a REP is sufficient to satisfy the standard that a REP's business (trade) name shall not have been "previously approved" for use by a REP certificate holder
The ALJ directed that PUC Staff shall, and other parties may, file briefing on this question by Sept. 9
While the issue of the rule's language concerning granting a "previously approved" name to a new REP has generally not been contested or raised by the PUC in similar prior cases, the ALJ's instant request for briefing should not be seen as suggesting that disapproval of the Rhythm application is likely. Rather, the ALJ's briefing order is consistent with recent practice at the PUC where ALJs or presiding officers order briefing, clarification, or that additional evidence be entered into the record even on uncontested and/or routine matters to the extent the presiding officer believes a sufficient foundation has not yet been established for the sought relief
The PUC has previously, via uncontested administrative approvals, granted REPs the use of a trade name that was previously approved for use by another REP under another REP certificate. Although the certification rules have been updated and re-numbered over time, the provision that a REP name shall not be, "duplicative of a name previously approved for use by a REP certificate holder", was present in prior versions of the certification rules
In at least one instance, the PUC approved the use of a previously approved trade name by a new REP as the result of some form of brand acquisition, in contrast to an outright purchase of a company (and its REP certificate) in which any movement of a trade name among certificates would have still been within the same corporate parent
Specifically, in February 2019, the PUC, via uncontested administrative approval, approved the application of US Retailers LLC (an NRG Energy company) to add the trade name Discount Power as a trade name on US Retailers LLC's REP certificate. US Retailers LLC's amendment followed NRG's acquisition of a customer book, and the brand name Discount Power, from VEH LLC, but such acquisition did not include VEH LLC's REP certificate or VEH LLC itself
From a policy consideration perspective, the US Retailers-Discount Power example is unique because it did include the transfer of customers between REP certificate holders, and thus the transfer of an "approved" name could be seen as reducing customer confusion (since the retail customer would be served under the same name) rather than potentially creating confusion from a name recently being used by one REP certificate holder, and then being used by separate REP immediately thereafter. The Rhythm Ops-Declaration Energy brand assets agreement did not include the acquisition of any customers by Rhythm
However, from a strictly legal perspective, there is no distinction in terms of applicability of the rule's text. In both the US Retailers-Discount Power example, and the pending Rhythm-Energy Texas proceeding, the issue is granting a new REP the use of a trade name that was "previously approved" for use by another REP
Approvals via uncontested administrative approval do not have precedential value in future proceedings; however, the US Retailers-Discount Power example, in which the "previously approved" language of the REP certification rule was not raised as a problematic issue during the case, illustrates that questioning the proper interpretation of the rule's language is a new consideration for the Commission
While not precedential, the notice of approval in the US Retailers-Discount Power proceeding had stated, "the name 'Discount Power' is not deceptive, misleading, vague, or duplicative of any existing REP name." [emphasis added, note that the notice of approval uses the term "existing" rather than "previously approved"]
PUC Staff, in the US Retailers-Discount Power case, had specifically cited the requirements of the rule provision concerning REP business names (at such time the relevant rules were at a differently numbered section), including the "previously approved" provision, and Staff had said as follows: "16 TAC § 25.107(e)(1)(B) provides that '[b]usiness names shall not be deceptive, misleading, vague, otherwise contrary to 16 TAC § 25.272 of this title (relating to Code of Conduct for Electric Utilities and Their Affiliates), or duplicative of a name previously approved for use by a REP certificate holder.' Staff verified that the requested assumed name is not deceptive, misleading, vague, or duplicative of any existing REP name."
The Rhythm Ops proceeding is Project 56533
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August 20, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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