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From NextVolt Brief:

{***}. The results of the proceeding in Docket No. 56201 will have no impact on the compliance of NextVolt’s pending application with the provisions of 16 Texas Administrative Code (TAC) § 25.107.1 Under 16 TAC § 25.107(g)(1), a person who meets the criteria enumerated in 16 TAC § 25.107(g)(1)(A) or (B) may not control a retail electric provider (REP) or be relied upon to meet the requirements in 16 TAC § 25.107(d) or (e). The criteria under the rule are limited to a person who was a principal of another REP during the six-month period prior to any of the events listed in 16 TAC § 25.107(g)(1)(A)(i)-(iii).2 As supported by the record in this case,3 no person who may be in a position of control of NextVolt, or who is relied upon to meet the requirements of 16 TAC § 25.107(d) or (e), is a person who was a principal of a market participant within the six months prior to the market participant falling within the criteria listed in 16 TAC § 25.107(g)(1). 

The response to Order No. 6 filed by the Staff (Staff) of the Public Utility Commission of Texas (Commission) implies that if the proceeding in Docket No. 56201 is converted from a relinquishment of a REP certificate to a revocation, it will affect the compliance of the application in the instant matter.4 However, none of the triggering events in 16 TAC § 25.107(g)(1)(A)(i)-(iii) have occurred with respect to the REP involved in Docket No. 56201. At this point in time, for anyone to be associated with the other REP in the six-months prior to any of those events occurring, they would have to have been with the other REP after May 22, 2024 (six months from today was May 22,2024). 

Specifically, the REP involved in Docket 56201 has not: 

(1) experienced a mass transition of the REP’ s customers; 

(2) had ERCOT terminate their SFA, or 

(3) exited the electricity market5 None of these events has occurred and no person identified in NextVolt’ s application was associated with the REP involved in Docket No. 56201 within the six-month period that was prior to the date on which any of those events could occur. 

The timing provisions in 16 TAC §§ 25.107(e)(2)(E)(iv)(I) and 25.107(g)(1)(A) must be interpreted in a manner that gives meaning to each word and must be read to harmonize with one another. Reading these provisions to establish the six-month period as the period before the date a market participant experiences one of three triggering events in subsection (g)(1)(A)(i -(iii) gives meaning to the phrase “prior to.” Any other interpretation is contrary to the plain language of the rule, would result in an untenable lack of regulatory certainty, and would unduly delay the processing of REP applications. Accordingly, the administrative law judge does not need to wait for a determination in Docket No. 56201 because the six-month period has expired.6 Thus, NextVolt’ s ability to begin to serve customers should not be abated until Docket No. 56201 is closed. {***}

From Staff’s Brief:

{***} It is Staff’ s opinion that 16 TAC § 25.107(e)(2)(E)(iv)(1)(c) requires a market participant to completely exit the market before the six-month timeframe begins. That is, a market participant (REP), must have a finalized relinquishment order to be considered “exited” from the electricity or gas markets. As noted in previous filings, OnPoint’ s relinquishment application has not received a final order. Thus, OnPoint has not exited the market and their principals are still subject to prohibitions under 16 TAC § 25.107(g). F

Further, 16 TAC § 25.107(g)(1)(B) prohibits any person(s) from exercising control of an Option 1 REP if, “a person who, by commission order, is prohibited from serving as a principal for any commission-regulated entity.”6 Here, OnPoint has not exited the market, and NextVolt’ s principals were directly, or indirectly, in control of OnPoint at the time of their relinquishment application. OnPoint’ s application may still undergo a revocation proceeding. Commission Staff may pursue revocation of OnPoint’s REP certificate under 16 TAC § 25.107(k)(6)7 if OnPoint’ s relinquishment application is denied. The conclusion of such a proceeding would prohibit OnPoint’ s principals from market participation for a statutorily set timeframe. Therefore, it is Staff’ s opinion that at this time, NextVolt’ s application for a retail electric provider certificate should not be allowed to continue at this time. Staff believes that due to the numerous safeguards imbedded in the 19 pages of § 25.107, it was the intention of the legislature to prevent principals of Option 1 market participants from entering the market unless it is made certain that they have the ability, financial integrity, and managerial resources to provide continuous and reliable retail electric service to customers. Out of an abundance of caution, Staff is of the position that abatement of this current docket should continue until Docket No. 56201 is finalized.  {***}

As background:

{***} NextVolt’s response to Order No. 6 states, “in no instance is any person who may be in a position of control, or who is relied upon to meet the requirements of 16 Texas Administrative Code (TAC) § 25.107(d) or (e) “a person who was a principal of a market participant, at any time within the six months of any prior market participant” falling within the criteria listed in 16 TAC § 25.107(g)(1). Accordingly, processing ofthe application is not dependent upon the resolution of any other pending proceeding.”3 Staff disagrees with NextVolt’s application of 16 TAC § 25.107(e) and (g)(1) in this docket. 16 TAC § 25.107(e)(2)(E)(iv)(1)(c)-(d) requires an applicant to make a statement within their filing that identifies all the applicant’ s principals, executive officers, employees, and third-party providers that exercised direct or indirect control of a market participant within the prior six months of a market participant having exited an electricity market with outstanding 1 Public Utility Regulatory Act, Tex. Util. Code Ann. §§ 11.001-66.016 (PURA). 2 Application of OnPoint Energy Texas, LLC to Relinquish its Retail Electric Provider Certificate, Docket No. 56201 (pending) 3 16 TAC § 25.107(d) and (e) Page 2 of 4 payment obligations that remain outstanding, or have been barred, in any way, from participation by commission order.4 In NextVolt’ s application, a statement related to 16 TAC § 25. 107(e) was made within a confidential filing. 5 Specifically, the confidential filings indicated that multiple of NextVolt’s principals exercised direct or indirect control ofOnPoint Energy Texas, LLC (OnPoint) at the time of OnPoint filing for relinquishment. It is NextVolt’ s opinion that these principals have since removed themselves from OnPoint, for the required six months, negating the prohibitions identified in 16 TAC § 25.107(g). Staff disagrees with this interpretation ofthe rules. {***}

NextVolt Brief  (11/22/1924)

Staff’s Response To Order. 7   (11/22/1924)

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Application Of NextVolt Texas, LLC For A Retail Electric Provider Certificate