In a rulemaking issued April 6, 2023, the Public Utility Commission of Texas (“Commission”) adopted amendments to market participant registration and certification requirements.[1] The Commission’s rule amendments significantly change qualification and reporting requirements for Retail Electric Providers (“REP”), Power Generation Companies (“PGC”), Self-Generators, and Power Marketers. This article outlines the most significant of these changes.

Power Marketer Registration Changes (Subs. R. 25.105)

Power Marketers are required by statute to register with the Commission, and will typically also file with the Commission certain applications they have submitted at the FERC (either an Exempt Wholesale Generator self-certification or application for market based rate authority). Changes to the Texas power marketer registration requirements made in this proceeding include:

• Currently registered power marketers must resubmit their registration by November 1, 2023.
  • Ongoing annual renewal of registration requirement by November 1^st of each year.
  • Current registrations expire if not renewed by December 31^st of each year.
• Additional information (beyond the current requirements) that must be submitted:
  • A registrant’s contact information, including: (1) physical and business mailing address; (2) business phone number; and (3) business email address.
  • Affidavit by an individual with binding authority over the registrant’s operations, affirming that the registrant qualifies as a Power Marketer under Commission regulations.
  • Heightened information requirements, including: (1) copies of information filed with the Federal Energy Regulatory Commission; (2) information regarding the entity’s regulatory contact; and (3) a description of the activities the registrant will participate in and services it will provide.

Retail Electric Provider Registration Changes (Subst. R. 25.107)

REPs are required by statute to obtain and maintain certification by the Commission, and must demonstrate that they meet specific financial, administrative, and technical requirements. This obligates the REP to file annual and semi-annual reports confirming their certification information, and to update this information as necessary. The new rules make significant changes to these certification and qualification requirements:

• The rule excludes electric vehicle charging services from the requirement to obtain certification as REPs.
• New Certification Conditions applicable to All REPs
• All REPs must now have an active business entity registration with the Texas Secretary of State.
• Letters of credit, both to establish financial resources and to cover deposits and pre-payments held, must automatically renew and maybe allowed to expire only if prior notice is provided to the commission at least 90 days before expiration.
• Adds additional information defining what would constitute a material change requiring a REP to apply for amendment.
• Requires a REP to state the effective date of each material change that prompted the amendment to the application.
• New Certification Conditions applicable to Option 1 REPs Only
• Any REPs using an irrevocable stand-by letter of credit to satisfy its access to capital requirement must now maintain a letter of credit valued at $750,000 if they serve less than 50,000 ESI IDs and $1,500,000 if they serve more than 50,000 ESI IDs.
• For the first 24 months an Option 1 REP, using an irrevocable stand-by letter of credit and shareholder equity to satisfy its access to capital requirement, that is serving load cannot make any distribution or payment to shareholders, affiliates, or corporate parent’s affiliates if, after the distribution or other payment, the REP’s shareholder equity is lower than one million dollars.
• Defines the category of persons prohibited from exercising control over a REP including: a person who was a principal of a market participant that experienced a mass transition of customers or exited the electric or gas market with outstanding payment obligations; or who by Commission order is prohibited from serving as a principal for any Commission-regulated entity.
• Changes some information to be provided for the Annual and Semi-Annual Report including standardizing information required by both reports; requiring information regarding a REP, QSE, and LSE; and no longer requiring audited financial information.
• Option 1 REPs will need to comply with the new rule by March 5, 2024 and file a compliance update by that date.
• Failure to comply by March 5, 2024 could lead to suspension from acquiring new customers.
• Option 2 REPs can now be granted conditional certification approval without having the necessary customer affidavits, as long as they submit the required customer affidavits within 30 days of conditional approval.

Power Generation Company and Self-Generator Registration Changes (Subst. R. 25.109)

PGCs and Self-Generators are required by statute to register with the Commission. Changes to the registration and qualification requirements made in this proceeding include:

• Requires PGCs and Self-Generators to renew their registration on or before February 28^th of every other calendar year, by submitting a statement that the registration information on file with the Commission is current and correct.
  • A PGC or self-generator whose Commission registration number is an even number must submit its registration renewal in all even number years.
  • A PGC or self-generator whose Commission registration number is an odd number must submit its registration renewal in all odd number years.
• Reduce the time for a PGC to amend its registration from 45 days to 30 days after a change has taken effect related to any information that the PGC reported in its registration application.
• Eliminates the Self-Generator requirement to report material changes by February 28^th of each year, and instead requires Self-Generators to amend their registration within 30 days of a change in any regulatory contact information or change in generating facility information including the capacity rating of any generating unit. 
• Current PGCs and Self-Generators will need to comply with the new rule by June 1, 2023 and must file a compliance update by that date showing compliance.
  •  Failure to demonstrate compliance with the rule as amended may lead to revocation of registration and therefore the ability to operate.

Rules Related to Complaints, Customer Access, and Unauthorized Charges by REPs (Subst. R. 25.30, 25.485, and 25.495)

• Changes the amount of time utilities and REPs have to investigate and respond to a customer complaint from 21 days to 15 days starting on September 1, 2023.

New Filing Deadlines Created by Rule Changes

Newly Created One Time Filings

June 1, 2023: A PGC or Self-Generator, already certified with the Commission, must comply with the requirements of the new 16 TAC § 25.109. They must also complete and file a completed Commission approved form demonstrating compliance by that date.

November 1, 2023: Any person already registered as a Power Marketer must file a new registration in compliance with the newly adopted rule.

March 5, 2024: A person certified as an Option 1 REP must come into compliance with the new requirements. To comply, an Option 1 REP must file a compliance update with the Commission showing compliance with the rule as amended by that date.

Newly Created Recurring Filings

February 28^th of every other year: a PGC or Self-Generator must renew its registration every other calendar year by submitting a statement that the PGC or Self-Generator’s registration information on file with the Commission is current and correct.

• If the entity’s commission registration number is an even number, it must submit its registration renewal in all even number years.
• If an entity’s commission registration number is an odd number, it must submit its registration renewal in all odd number years.

November 1st of every year: a Power Marketer must renew its registration with the Commission on or before November 1st of each year to maintain registration.

---

[1] These requirements are generally set forth in 16 Tex. Admin. Code (“TAC”) §§ 25.30, 25.485, and 25.495 and repealed and replaced 16 TAC §§ 25.105, 25.107, and 25.109 on April 6, 2023.

---