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Just Energy, PUC Staff & OPC File Proposed Declaratory Order Reaching Consensus On Interpretation Of Fixed Price Rule
The parties to the proceeding are Texas Public Utility Commission (TPUC) Staff, Just Energy (and its affiliates), and the Office of Public Utility Counsel (OPUC). The agreed declaratory order proposed by the parties remains subject to a final disposition by the (TPUC).
As previously reported, the proceeding stems from a TPUC Staff investigation of Just Energy Texas, LP and its affiliates concerning how the securitization charges were applied by Just Energy.
Excerpts from Settlement Agreement:
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“All parties to this proceeding support the issuance of an order holding that, under PURA § 39.112(a) and 16 TAC § 25.475(b)(5), REPs may not increase the price charged under a fixed rate contract entered on or after August 1, 2022 to reflect fluctuations in securitization charges incurred during the contract term pursuant to PURA §§ 39.605 and 39.653 and the Debt Obligation Orders issued in Docket No. 52321 and 52322.2 The parties have attached to this pleading a Joint Proposed Order reflecting their support of the requested declaration. The parties’ respectfully request that the Commission resolve this proceeding with the issuance of an Order consistent with the attached Joint Proposed Order.”
“A REP may not increase the price charged under a fixed rate contract for a residential or small commercial customer entered on or after August 1, 2022 above the charge reflected in the customer’s EFL on enrollment to reflect fluctuations in the amount of securitization charges incurred by the REP over the life of a customer’s fixed rate contract that are consistent with the formulas, procedures, and methodologies established under the Debt Obligation Orders issued in Docket Nos. 52321 and 52322.”
In January 2024, Just Energy had provided a statement which had said: “The amount of Securitization Charges from ERCOT vary daily. Just Energy’s, Amigo Energy’s and Tara Energy’s ERCOT Securitization charges to customers are adjusted periodically to reflect these changes. We believe such adjustments are in the best interests of all customers and we have always been transparent with our customers regarding the ERCOT securitization charges.”
The agreed declaratory order supported by the above-cited parties would find that, while the securitization charges may vary due to true-ups which may result in an adjustment of ERCOT’s billing requirements, “true-ups do not modify the formulas or methodologies used to allocate securitization charges across obligated market participants.”
“The amount of securitization charges incurred by a REP may vary over time due to fluctuations in variable components of the formulas used to allocate charges among market participants.”
“In the retail market, customer charges associated with the recovery of securitization charges are ‘recurring charges,’ which must be included in the price of a fixed rate product.”
“Securitization charges are not TDU charges or ERCOT or TRE administrative fees charged to load. Therefore, a REP is not permitted to increase the price charged under a fixed rate contract to accommodate fluctuations in the amount of securitization charges incurred unless those fluctuations are the result of changes to federal, state, or local laws that impose new or modified fees or costs that are not within the REP’s control.”
“ERCOT completed the implementation of all securitization charges on August 1, 2022. Since August 1, 2022, no law governing or affecting the implementation, calculation, or allocation of securitization charges among market participants has changed. Fluctuations in the amount of securitization charges incurred by a REP due to true-up adjustments or changes in REP market activity are consistent with the original design of the charges under the Debt Obligation Orders and the statutes under which they are authorized.”
“Because the fluctuations in the amount of securitization costs incurred on or after August 1, 2022, are not the result of a change in law, the Commission determines that REPs may not increase the price charged under a fixed rate contract entered on or after August 1, 2022, to recover those fluctuations”
“This Order is expressly limited to conduct involving fixed rate contracts entered on or after August 1, 2022, the date on which the final component of securitization charges was implemented, unless it is otherwise stated.” [***]
Proposed Declaratory Order (07/29/2024)
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Commission Staff’s Petition For A Declaratory Order Interpreting 16 TAC § 25.475(b)(5)
