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Texas PUC Staff Recommend "Wide" Interpretation Of Rule Prohibiting Retail Provider From Using Name Of A Prior REP
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Staff of the Texas PUC have urged the Commission to use a "wide" interpretation of the current rule which prohibits a retail electric provider from using the name of a REP which was previously certificated by the PUC
Specifically, the REP certification rules provide that, among other things, a REP's name shall not be, "duplicative of a name previously approved for use by a REP certificate holder."
As previously noted by EnergyChoiceMatters.com, there have been several instances in which a REP has acquired -- outside of the acquisition of the underlying REP certificate or the acquisition of equity in the competing REP -- the name of a competing REP which had ceased the use of such name, and in which the PUC granted the REP newly acquiring the name the right to use such name
However, an ALJ raised concern with the certification rule's stated language in the context of reviewing an application from Rhythm Ops, LLC 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
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, and sought briefing on the matter
Staff said in a brief that the certification rules, and their goal of customer protection, should be balanced with the goal of customer choice and a competitive market. Such competing goals favor a "wide" interpretation of the "previously approved" name language, Staff said
"To capture benefits for both stated goals, a wide interpretation of the rule is required," Staff said
"Although the rule as currently written appears to lend to a narrow reading, Staff would point out that such a reading would function only to prohibit a REP from using any business or assumed name that has ever been used by another REP, an interpretation that would go against the desire to maintain a competitive retail electric market as it would hinder a REP’s ability to compete in the retail market with other providers," Staff said [emphasis by Staff]
Staff also suggested that a narrow reading of the rule language may not produce tangible benefits to customers, with any purported benefits being difficult to quantify
"Staff believes that the balance of interests militate in favor of granting the assumed name since it is not currently in use with another REP certificate and granting the assumed name is unlikely to confuse or harm customers," Staff said
Rhythm Ops, LLC filed a brief raising many of the same points as Staff, but also argued that no customer confusion will result from the granting of Rhythm's application
Rhythm noted that, after notice, the customers of Energy Texas, as a trade name for Declaration Energy, were transferred to another REP (NRG Energy REPs), with the switches completed on April 20, 2024
The latest due date on a final bill issued by Energy Texas was April 26, 2024, Rhythm said
"[T]he customers who were formerly served by Declaration have known
for six months that Declaration/Energy Texas is no longer their REP. Those customers whose
original contract term with Declaration has not expired are not receiving service under the name
Energy Texas and have been receiving service from the REP to whom they were transferred for at
least four months. In addition, all customers who were transferred have received their final bill
from Declaration. This transitional period -- combined with the completion of the legal and
regulatory steps necessary to formalize Rhythm’s place as the owner and rightful user of the
Energy Texas brand, and make this information publicly accessible -- are sufficient to support
approval of the application," Rhythm said
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September 9, 2024
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Copyright 2024 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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