Texas Register, Volume 35, Number 42, Pages 9167-9436, October 15, 2010 Page: 9,233
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Burnam and Anchia filed a letter in support of the comments
submitted by AARP and asked that their names be added to the
list of those supporting AARP's position.
Summary of Comments
Question 1. Are the provisions relating to unauthorized switch-
holds appropriate? Please suggest any modifications.
AARP, MS Society, OPC, Public Citizen, State Representatives,
TOP, and Reliant urged the commission to reject the switch-hold
process, which prevents a customer from switching to another
REP, and opined that it is a bad, anti-competitive policy that will
make disconnections worse by extending the time a customer
may be without service. These commenters stated that the
switch-hold process would conflict with PURA 17.004(a)(2),
17.004(e), 39.001(d), 39.001(b), 39.101(a)(1), 39.101(b)(2),
39.102(a), and 39.106. AARP added that the commission's
general power to regulate and adopt rules under PURA 14.001
and 14.002 applies to only the businesses of public utilities and
"not the ability to regulate customers." AARP opined that the
switch-hold is an attempt to regulate a customer's fundamental
right under deregulation to switch to lower cost providers and
would place a greater priority on protecting REPs from bad debt
than protecting consumers. TOP filed letters from 26 citizens
stating that the switch-hold would discriminate against low-in-
come consumers who have no alternatives to obtain reasonable
credit terms and conditions and asked that the commission not
adopt the switch-hold for deferred, level or average payment
plans.
OPC and the MS Society stated that, while they oppose switch-
holds, it is imperative that the commission maintain oversight
and control with respect to a REP's use of the switch-hold and
that the commission should include protections related to unau-
thorized switch-holds. OPC proposed language that would sub-
ject the REP to penalties for failing to follow the correct proce-
dures for removing the switch-hold, in addition to the proposed
penalty for the unauthorized placement of a switch-hold.
Consumers pointed out that the proposed rule in Project No.
37685 (Rulemaking Regarding Certification of Retail Electric
Providers, 25.107) recognizes the gravity of switch-holds by
proposing that a REP certification may be revoked for erroneous
use of a switch-hold, but the proposed rule fails to provide
any customer protection against the improper or negligent use
of a switch-hold. Consumers offered that the proposed rule
being considered in Project No. 36131 should be modified to
spell out consequences for intentional conduct with increased
consequences for seriousness of the violation.
Cities opined that the provisions relating to unauthorized switch-
holds is not enough and noted that an unauthorized switch-hold
would bar a customer from realizing any savings that might be
realized by switching REPs. Cities and Consumers argued that,
ideally, the REP that placed the unauthorized switch-hold should
be required to make the customer whole for any monetary losses
and missed opportunities. However, Cities opined that the com-
mission lacks the authority to award monetary damages to cus-
tomers and, instead, proposed that unauthorized switch-holds
be considered and treated as a new sub-category of Class A vio-
lation due to the seriousness and difficulty in quantifying the harm
incurred by a victim. OPC concurred with Cities' recommenda-
tion that a switch-hold be considered a sub-category of a Class
A violation rather than a Class B violation. Cities stated that if an
unauthorized switch-hold occurs, the REP should be required
to inform customers within 15 days of lifting the switch-hold thatthe customer has the right to file a complaint with the commis-
sion. Consumers agreed that the REP should be required to pro-
vide notice to a customer informing them about any violation and
the customer's rights to civil recourse. Consumers also recom-
mended that the commission automatically refer any intentional
wrongdoings by REPs regarding the switch-hold to the Attorney
General for investigation and enforcement.
The REP Group commented that the provisions related to unau-
thorized switch-holds strike the right balance, appropriately de-
tailing requirements for placing and removing a switch-hold and
establishing the potentially significant administrative penalties
for REPs that do not follow the process. The penalty for a Class
B violation, as proposed in the published rule, may be up to
$5,000 per violation per day. The REP Group disagreed with
commenters that contended that the proposed rule will prevent
any customer from switching to a provider of choice. Instead, the
REP Group argued, the proposed rule would require customers
to pay back a no-interest loan before making the switch. The
REP Group also disagreed with comments that the commission
lacks statutory authority to implement the switch-hold process.
The REP Group argued that certain provisions of PURA plainly
authorize the commission to adopt and enforce rules relating to
the extension of credit, level or average billing programs, and ter-
mination of service, including PURA 17.004(b) and 39.101(e),
among others.
Additional comments concerning the commission's authority to
allow a switch-hold and the impact of the switch-hold are dis-
cussed in the Authority and Policy Concerns section regarding
25.480(l) below.
Commission Response
The commission disagrees with the position of AARP, MS
Society, OPC, Public Citizen, State Representatives, TOP, and
Reliant that the switch-hold is a bad, anti-competitive policy
that would conflict with PURA, as discussed in the Authority
and Policy Concerns section of the preamble below regarding
25.480(l).
The commission agrees with OPC's proposed language to clarify
that a REP will be subject to penalties for placing a customer
on an unauthorized switch-hold as well as for not following the
outlined procedures for removing the switch-hold and modifies
25.480(m)(3) accordingly.
The commission is not adopting the suggestion of Cities, OPC,
and Consumers to specify that erroneous switch-holds and vio-
lations of the switch-hold process are a Class A violation. Con-
sumers also recommended that the commission automatically
refer any intentional wrongdoings by REPs regarding the switch-
hold to the Attorney General for investigation and enforcement.
While the commission may under PURA 15.021 request assis-
tance from the Attorney General's Office, the commission does
not agree that the rule should be modified to provide for an auto-
matic referral to the AG's office for any intentional wrongdoings
by REPs regarding the switch-hold. Under PURA 15.023, the
commission has the ability to levy penalties against parties that
violate commission rules. The rule being adopted states that a
REP who erroneously places a switch-hold flag on an ESI ID that
prevents a legitimate switch or does not remove the switch-hold
within the time frame required by the rule will be considered to
have committed a Class B violation. Section 25.8 states that a
Class B violation may result in penalties up to $5,000 per day
per violation. The commission believes that the Class B viola-
tion penalty provision in the rule is sufficient inducement for theADOPTED RULES October 15, 2010 35 TexReg 9233
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Texas. Secretary of State. Texas Register, Volume 35, Number 42, Pages 9167-9436, October 15, 2010, periodical, October 15, 2010; Austin, Texas. (https://texashistory.unt.edu/ark:/67531/metapth129013/m1/65/: accessed May 9, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.