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Texas Appellate Court Dismisses Appeal Related To REP Pass-Throughs, Demand Charge, Rate Class

May 31,2017

The Texas Sixth Court of Appeals has dismissed an appeal related to a complaint case which had implicated retail electric providers' obligations to customers prior to assessing a new or modified TDU pass-through charge on customers

The complaint centered on a customer (Nawaid Isa) whose delivery schedule was changed by CenterPoint Energy Houston Electric after installation of an in-line pole to power a cricket field. The customer was reclassified under the CenterPoint Energy Houston Electric tariff from "Commercial Under 10 KVA" to "Commercial over 10 KVA" due to such installation, and the customer has disputed their REP's pass-through of charges related to the reclassification

See full background here

The complaint had implicated Subst. R. 25.481(b)(1) which states that, "The REP shall inform the customer of the product or service being offered, including all associated charges, and explicitly inform the customer that the associated charges for the product or service will appear on the customer's electric bill."

SOAH Order No. 7 in the case had concluded that the Commission's Customer Protection Rule regarding "Unauthorized Charges" imposes an additional requirement on REPs to provide explicit advanced notice and to obtain prior consent before passing through any changes in TDU charges. The order did so by determining that P.U.C. SUBST. R. 25.481(b)(1) applies to changes in TDU charges resulting from TDU Rate Schedule changes and "requires a REP to 'explicitly inform the customer' of any charges before those charges appear on the customer's electric bill."

However, the complaint was ultimately dismissed after the customer's REP made the customer whole, and the ALJ determined no additional relief could be granted (the complainant had been seeking damages)

The complainant appealed the ALJ's order of dismissal to district court. However, the district court dismissed the case with prejudice for lack of jurisdiction, as the complainant failed to exhaust his administrative remedies when he did not seek rehearing of the ALJ's order of dismissal.

The complainant appealed the district court's dismissal. The Sixth Court of Appeals affirmed the district court's decision.

Addressing arguments raised on appeal, the Sixth Court of Appeals found: (1) the PUC’s rules required Isa to file a motion for rehearing after his appeal of the ALJ’s dismissal order was denied, (2) Isa’s excuse for not filing a motion for rehearing does not meet the requirements of the futility exception, (3) any complaint regarding deficiencies in the ALJ’s dismissal order were required to be addressed in the motion for rehearing, and (4) he was not prevented by the PUC’s rules from filing a motion for rehearing.

See the Sixth Court of Appeals' opinion for more

Case: 06-16-00070-CV

Texas   Pricing   Litigation  

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