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Texas PUC Directs Enforcement Staff To Investigate Whether Principals Of REP, Which Has Unpaid TDU Obligations, Serve As Principals At Any Other REP
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For reasons set forth in a previously reported memo from Commissioner Courtney Hjaltman (see story here), the Texas PUC rejected a settlement between OnPoint Energy Texas, LLC and PUC Staff, under which OnPoint would have relinquished its REP certificate, but under which OnPoint would not have been subject to certificate revocation
As previously reported, OnPoint Energy in early 2024 sold its customers to Good Charlie & Co., LLC, as OnPoint experienced what was termed, in the now-rejected settlement agreement, a "liquidity crisis"
While OnPoint did not default at ERCOT, OnPoint owes in excess of $1.3 million in TDU charges. OnPoint was seeking to relinquish its REP certificate, and would exit the market without fully satisfying such TDU obligations. A $500,000 letter of credit from OnPoint on file with the PUC would not fully cover the TDU balance
During the open meeting, Hjaltman set forth the previously reported memo but did not further expand on the matter, and did not offer any specific discussion of whether the principals of OnPoint Energy Texas, LLC serve as the principals of any other retail electric provider (discussed further below)
In brief, Hjaltman said that the settlement should not be adopted because, under the PUC's rules, only revocation, and not relinquishment, triggers certain provisions applicable to the exiting REPs' principals, such as disqualifying them from future control of a REP
Commissioner Kathleen Jackson agreed with Hjaltman's memo. While, under the settlement rejected by the PUC, OnPoint agreed that PUC Staff could draw on OnPoint's letter of credit (authorization from OnPoint for such a draw actually occurred well before the formal settlement, and PUC Staff have already executed the draw on the LOC), Jackson noted, in particular, that nothing in the PUC's rules specifically allows the Commission to draw on OnPoint's letter of credit outside of a certificate revocation
PUC Chair Thomas Gleeson also agreed with Hjaltman's approach, while noting that the decision was a, "close call". Gleeson noted that a relinquishment may be more expeditious, and generally favors doing things in a more efficient manner where appropriate, but ultimately agreed that the PUC rules favor Hjaltman's proposed course of action
The PUC rejected the settlement and rejected OnPoint's petition to relinquish its REP certificate
The PUC instead directed Staff to pursue revocation of OnPoint's REP certificate
Additionally, the PUC directed its Enforcement Staff to investigate whether the principals of OnPoint are principals of any other REP in violation of PUC rules
As relevant here, 16 TAC § 25.107(g) provides that, "[i]n no instance" (as recently affirmed by the PUC), shall a REP be controlled by an individual who was a principal of a market participant, "at any time within the six months prior to the market participant," experiencing: (1) an involuntary mass transition, (2) termination of its ERCOT SFA market agreement, or (3) an exit from an electricity or gas market with outstanding payment obligations that have not been cured
In the memo, Hjaltman alleged that, "OnPoint has stated that it has three principals in common with Good Charlie, LLC [sic], the REP that its former customers were transferred to."
Hjaltman did not identify any of such principals. While certain information concerning employees or leadership at OnPoint and at Good Charlie may be public, whether such served as "principal" at OnPoint, and now (or previously) "control" Good Charlie, is unknown
Notably, Good Charlie is now owned by Calpine in some manner, though control of Good Charlie prior to its acquisition by Calpine late last year may be of concern to Hjaltman
As noted above, Hjaltman did not expand on any concerns not previously discussed in the memo, while the other Commissioners did not offer their views other than those already discussed above. As noted, Hjaltman did not, during the open meeting, specifically identify any specific principals of OnPoint Energy Texas, LLC that may serve as the principals of any other retail electric provider
The open meeting was also devoid of any specific discussion of Hjaltman's allegation, stated in the memo, that OnPoint violated PUC rules by not providing 45 days' advance notice to ERCOT, the TDUs, and POLRs that OnPoint was ceasing operations
ECM yesterday extensively discussed the implications of this allegation, and any broader enforcement of a 45 day notice requirement, on REP fire sales
No other Commissioner during the open meeting offered their view on whether the 45 days notice to ERCOT et al. is generally required under the rule (or whether good cause exceptions remain appropriate as a general policy to avoid POLR drops), other than generally agreeing with Hjaltman's memo which set forth the alleged notice requirement
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PUC Directs Staff To Pursue Revocation Of REP's Certificate, Rejecting Settlement
February 20, 2025
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Copyright 2025 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com
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