Control Number : Item Number: 1. Addendum StartPage: 0

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1 Control Number : Item Number: 1 Addendum StartPage: 0

2 DOCKET NO. AGREED SETTLEMENT AND PUBLIC UTILITY COMMISUIY"^ PROPOSED AND CONSENT `<^p^ ORDERS RELATING TO ENERGY OFTEXAS BROKER CONSULTANTS, LLC AND WHOLESALE COMMERCIAL ENERGY, LLC +hi APPLICATION FOR APPROVAL OF SETTLEMENT AGREEMENT '^. Staff of the Public Utility Commission of Texas (Staff) files this Application for Approval of Settlement Agreement and would show in support as follows: Staff has entered into a Settlement Agreement (Agreement) with Energy Broker Consultants, LLC (EBC Broker),t Energy Broker Consultants, LLC (EBC Aggregator),2 and Wholesale Commercial Energy, LLC (Wholesale Commercial) (collectively, the Entities) and Mr. Danny Shannon (together, Parties). The Agreement, attached to this request, has been signed by representatives of both Parties and includes an attached Proposed Order and a Proposed Consent Order. This Agreement resolves and concludes the investigation of the Entities regarding potential violations of P.U.C. SUBST. R (f)(8), governing conduct of wholesale market participants. WHEREFORE, Staff respectfully requests that the Parties' Application for Approval of Settlement Agreement be granted. I Energy Broker Consultants, LLC (EBC Broker) is a Delaware Limited Liability Company. 2 Energy Broker Consultants, LLC (EBC Aggregator) is a Texas Limited Liability Company.

3 DATE: November 1, 2012 Respectfully Submitted, Robert M. Long Division Director Oversight and Enforcement Division State Bar No J shua W. Walters Attorney-Oversight and Enforcement Division "State Bar No (512) (512) (facsimile) Public Utility Commission of Texas 1701 N. Congress Avenue P.O. Box Austin, Texas DOCKET NO CERTIFICATE OF SERVICE I certify that a copy of this document will be served on all parties of record on this the 1 st day of November, 2012 in accordance with P.U.C. Procedural Rule ^ VX L shua W. Walters 1^

4 ATTACHMENT 1 DOCKET NO. 4 qj AGREED SETTLEMENT AND PROPOSED AND CONSENT PUBLIC UTILITY COMMISSION ORDERS RELATING TO ENERGY BROKER CONSULTANTS, LLC OFTEXAS AND WHOLESALE COMMERCIAL ENERGY, LLC SETTLEMENT AGREEMENT AND REPORT TO COMMISSION Staff of the Public Utility Commission of Texas (Commission) enters into this Settlement Agreement and Report to Commission (Agreement) with Energy Broker Consultants, LLC (EBC Broker),' Energy Broker Consultants, LLC (EBC Aggregator),2 and Wholesale Commercial Energy, LLC (Wholesale Commercial) (collectively, the Entities) and Mr. Danny Shannon (together, Parties). This Agreement resolves and concludes the investigation of the Entities regarding potential violations of P.U.C. SUBST. R (f)(8), governing conduct of wholesale market participants. The Parties agree as follows: I. The Parties stipulate to the facts contained in the attached Proposed Interim Order and request Commission approval of that Order and the Proposed Consent Order. 2. The Commission has jurisdiction over the Parties to this proceeding and the subject matter of this Agreement. 3. Wholesale Commercial served as the QSE for EBC Energy Today, LLC (EBC Energy Today), an entity that operated as a REP without a certificate. EBC Energy Today entered into a lease with Prier Energy, Inc. (Prier), a certificated REP, that purported to lease a d/b/a of Prier, and along with it, Prier's ability to interface with ERCOT and the Commission. Although the Entities and Mr. Shannon believed the lease arrangement was valid and lawful, the lease did not and could not effectuate certificated authority to operate as a REP. I Energy Broker Consultants, LLC (EBC Broker) is a Delaware Limited Liability Company. 2 Energy Broker Consultants, LLC (EBC Aggregator) is a Texas Limited Liability Company. I?

5 Therefore, Wholesale Commercial could not schedule electricity on behalf of EBC Energy Today, through Prier or otherwise. 4. Wholesale Commercial submitted to ERCOT the REP certificate information of Prier in order to schedule electric delivery for customers of EBC Energy Today. As a result, the information Wholesale Commercial submitted to ERCOT was false, in violation of P.U.C. SUBS1'. R (f)(8). 5. Mr. Shannon and the Entities have voluntarily and fully cooperated with Commission Staff's investigation. 6. The Entities and Mr. Shannon acknowledge the alleged violation of P.U.C. SussT. R (f)(8). 7. EBC Aggregator agrees to relinquish its Aggregator registration with the Commission (Registration No ) within 14 days of Commission approval of this Agreement. In the event that EBC Aggregator does not relinquish its registration as described, EBC Aggregator consents to the automatic entry of the attached Agreed Consent Order revoking Aggregator Registration No Staff agrees that if EBC Aggregator relinquishes its Aggregator registration pursuant to the terms of this Agreement, then Staff will not pursue revocation of Aggregator Registration No The Entities and Mr. Shannon warrant that on May 25, 2012, Wholesale Commercial submitted to ERCOT a notice of termination of the Standard Form Market Participant Agreement (SFA) between Wholesale Commercial and ERCOT. This notice terminated Wholesale Commercial's registration as a QSE with ERCOT. The termination of the SFA became effective June 24, The Entities and Mr. Shannon agree to forgo participation in activities in the Texas restructured electric market that fall within the Commission's or ERCOT's jurisdiction for a period of 3 years from the date of the Final Order, including, but not limited to, engaging in energy brokering services, energy consulting services, or buying or selling electricity. Such restriction does not preclude Mr. Shannon from engaging in the licensing or sale of software as a vendor in the Texas restructured electric market. 11. Nothing in this Agreement shall limit the Commission Staff's ability to perform its enforcement functions as set forth in PURA and the Commission's rules. 2 q

6 12. Nothing in this Agreement shall limit the Commission Staff's ability to refer information to other state or federal agencies or authorities for possible violations of separate rules or laws. 13. A Party's support of the resolution of this docket in accordance with this Agreement may differ from its position or testimony regarding contested issues of law, policy, or fact in other proceedings before the Commission or other forums. Because this is a settlement agreement, a Party is under no obligation to take the same position as set out in this Agreement in other proceedings not referenced in this Agreement whether those dockets present the same or a different set of circumstances. The Parties' agreement to entry of a final order of the Commission consistent with this Agreement should not be regarded as an agreement as to the appropriateness or correctness of any assumptions, methodology, or legal or regulatory principle that may have been employed in reaching this Agreement. 14. This Agreement fully and finally resolves all existing issues and/or matters related to the Entities' and/or Mr. Shannon's participation in the Texas electric market up to the date of this Agreement, including those that have been or could have been raised in this Docket. The Parties enter into this Agreement to resolve this matter by compromise. This Agreement is entered into by the Parties in order to avoid the potential for expensive and protracted litigation, the outcome of which would be uncertain. 15. The Parties contemplate that this Agreement will be approved pursuant to P.U.C. PROC. R (g)(1)(C). In the event the Commission materially changes the terms of this Agreement, the Parties agree that any Party adversely affected by that material alteration has the right to withdraw from this Agreement, thereby becoming released from its obligations arising hereunder, and to proceed as otherwise permitted by law to exercise all rights available under law. The right to withdraw must be exercised by providing the other Party written notice within 20 calendar days of the date the Commission files the final order acting on this Agreement. Failure to provide such notice within the specified time period shall constitute a waiver of the right to withdraw and acceptance of the material changes to this Agreement made by the Commission. 16. This Agreement is the final and entire agreement between the Parties regarding its terms and supersedes all other communications among the Parties or their representatives regarding its terms. 3 ^

7 17. Each person executing this Agreement represents that he or she has been authorized to sign on behalf of the Party represented. Copies of signatures are valid to show execution. If this Agreement is executed in multiple counterparts, each is deemed an original but all of which constitute the same Agreement. 18. The Entities and Mr. Shannon warrant that each has read this Agreement carefully, knows the contents thereof, and signs the same as its free act. EXECUTED by the Parties by their authorized representatives designated below. 0h.W'9A-j.A-- Energ Broker Consultants, LLC Delaware Limited Liability Company Danny Shannon, Managing Member Date: October 31, 2012 Energy Broker Consultants, LLC Aggregator Registration No Texas Limited Liability Company Danny Shannon, Managing Member Date: October 31, "9A- - - Whol ale Commercial Energy, LLC Danny Shannon, Managing Member Date: October 31, 2012 Dann}WShannon Date: October C^hua W. Walters ttorney Oversight and Enforcement Division Public Utility Commission of Texas State Bar No Date: 0-"6111 ^^1- Ir Z_0 Z-- 4 G

8 DOCKET NO. AGREED SETTLEMENT AND PUBLIC UTILITY COMMISSION PROPOSED AND CONSENT ORDERS RELATING TO ENERGY BROKER OF TEXAS CONSULTANTS, LLC AND WHOLESALE COMMERCIAL ENERGY,LLC PROPOSED INTERIM ORDER (APPROVING SETTLEMENT) This Interim Order approves the Settlement Agreement and Report to Commission (Agreement) between the Staff of the Public Utility Commission of Texas (Commission) and Energy Broker Consultants, LLC (EBC Broker),' Energy Broker Consultants, LLC (EBC Aggregator),2 Wholesale Commercial Energy, LLC (Wholesale Commercial) (collectively, the Entities) and Mr. Danny Shannon (together, Parties) regarding Commission Staff's investigation of the Entities into potential violations of P.U.C. SussT. R (f)(8), governing conduct of wholesale market participants. This docket was processed in accordance with applicable statutes and Commission rules. The Agreement resolves all issues in this docket. The Agreement is unopposed and provides for a reasonable resolution to the issues in this docket. The Agreement is approved. The Commission adopts the following findings of fact and conclusions of law: 1. Findings of Fact I. EBC Broker is a Delaware Limited Liability Company that conducts energy brokering services in the Texas electric market. 2. EBC Aggregator is a Texas Limited Liability Company and a Class I Aggregator (Registration No ), pursuant to P.U.C. S[1BST. R EBC Aggregator warrants that it has conducted no activities in the Texas electric market. 4. Wholesale Commercial is a Texas Limited Liability Company that operated as a qualified scheduling entity (QSE) in the ERCOT market from August 25, 2011 to June 24, Energy Broker Consultants, LLC (EBC Broker) is a Delaware Limited Liability Company. 2 Energy Broker Consultants, LLC (EBC Aggregator) is a Texas Limited Liability Company. 5 q-

9 5. Mr. Shannon warrants that he is the sole member of EBC Broker, EBC Aggregator, and Wholesale Commercial. 6. The Entities' and Mr. Shannon's agent for service in this matter is John K. Arnold, at Winstead PC, 1100 JPMorgan Chase Tower, 600 Travis Street, Houston, TX The Commission has jurisdiction over the Parties to this proceeding and the subject matter of this Order. 8. Wholesale Commercial served as the QSE for EBC Energy Today, LLC (EBC Energy Today), an entity that operated as a REP without a certificate. EBC Energv Todav entered into a lease with Prier Energy, Inc. (Prier), a certificated REP, that purported to lease a d/b/a of Prier, and along with it, Prier's ability to interface with ERCOT and the Commission. Although the Entities and Mr. Shannon believed the lease arrangement was valid and lawful, the lease did not and could not effectuate certificated authority to operate as a REP. Therefore, Wholesale Commercial could not schedule electricity on behalf of EBC Energy Today, through Prier or otherwise. 9. Wholesale Commercial submitted to ERCOT the REP certificate information of Prier in order to schedule electric delivery for customers of EBC Energy Today. As a result, the information Wholesale Commercial submitted to ERCOT was false, in violation of P.U.C. SUBST. R (f)(8). 10. Mr. Shannon and Mr. Mark Angell jointly formed EBC Energy Today, LLC on June 23, Mr. Shannon warrants that he transferred his entire interest in EBC Energy Today, LLC on July 1, 2011 to Mr. Mark Angell. 12. On July 1, 2011, Mr. Shannon was hired as a consultant by EBC Energy Today, LLC, a role he continued in until EBC Energy Today, LLC discontinued service. 13. Mr. Shannon and the Entities warrant that on May 25, 2012, Wholesale Commercial submitted to ERCOT a notice of termination of the Standard Form Market Participant Agreement (SFA) between Wholesale Commercial and ERCOT. The termination of the SFA was effective June 24, Mr. Shannon and the Entities voluntarily and fully cooperated with Commission Staff's investigation. 15. The Entities and Mr. Shannon acknowledge the alleged violation detailed in this Order. 6 I?

10 16. The Entities and Mr. Shannon participated in one or more settlement discussions with Commission Staff, the purpose of which was to amicably resolve this matter, the subject of the investigation described herein. 17. On October 31, 2012, the Parties entered into the Agreement resolving the alleged violation as described herein. 18. The Agreement provides for a reasonable resolution of this matter. 19. The Agreement is in the public interest and should be approved. H. Conclusions of Law 1. The Commission has jurisdiction over this matter pursuant to PURA , , , and EBC Aggregator is an aggregator for purposes of PURA , , , and , as well as P.U.C. SUBST. R and P.U.C. SUBST. R The Commission may revoke an Aggregator's registration for significant violations of the Commission's rules pursuant to PURA and (c) and P.U.C. SuBST. R P.U.C. SUBST. R (j) provides that "significant violations" that warrant Aggregator registration revocation include providing false or misleading information to the commission. 5. Wholesale Commercial is a "market entity" and a "market participant" as defined by P.U.C. SussT. R (c)(4) and (c)(5). 6. Pursuant to P.U.C. SUBST. R (f)(8), a market entity has an obligation to provide accurate and factual information and shall not submit false or misleading information, or omit material information, in any communication with ERCOT or with the commission. 7. P.U.C. PROC. R (g)(1)(A),(B) and (C) requires issuance of a report of a settlement to the Commission and a written order that approves the settlement. 8. The Agreement referenced in Finding of Fact numbers is a report of settlement to the Commission as required by P.U.C. PROC. R (g). 9. The requirements for informal disposition pursuant to P.U.C. PROC. R have been met in this proceeding. 7 9

11 III. Ordering Paragraphs In accordance with these findings of fact and conclusions of law, the Commission issues the following order: 1. The Agreement, attached to this Order as Attachment 1, is approved, and the Parties shall be bound by its terms. 2. EBC Aggregator shall relinquish its registration with the Commission (Registration No ). 3. If EBC Aggregator does not relinquish its registration within 14 days of this Order, the Parties' Agreed Consent Order revoking Aggregator Registration No shall be entered. 4. Pursuant to the terms of the Agreement, the Entities and Mr. Shannon shall not participate in the Texas electric market for a period of 3 years from the date of this Order. 5. This Agreement fully and finally resolves all existing issues or matters related to the Entities' and/or Mr. Shannon's participation in the Texas electric market up to the date of the Agreement, including that have been or could have been raised in this Docket. The Parties enter into this Agreement to resolve this matter by compromise. This Agreement is entered into by the Parties in order to avoid the potential for expensive and protracted litigation, the outcome of which would be uncertain. 6. The Commission shall not be constrained in any manner from requiring additional action or penalties for violations that are not raised here. 7. Entry of this order does not indicate the Commission's endorsement or approval of any principle or methodology that may underlie the Agreement. Neither should the entry of an order consistent with the Agreement be regarded as a binding holding or precedent as to the appropriateness of any principle underlying the Agreement. 8. All other motions, requests for entry of specific findings of fact and conclusions of law, and any other request for general or specific relief, if not expressly granted herein, are denied. 8 /0

12 SIGNED AT AUSTIN, TEXAS on the day of PUBLIC UTILITY COMMISSION OF TEXAS DONNA L. NELSON, CHAIRMAN KENNETH W. ANDERSON, JR., COMMISSIONER ROLANDO PABLOS, COMMISSIONER /^

13 ATTACHMENT 2 DOCKET NO. AGREED SETTLEMENT AND PROPOSED AND CONSENT ORDERS RELATING TO ENERGY BROKER PUBLIC UTILITY COMMISSION CONSULTANTS, LLC AND WHOLESALE COMMERCIAL OF TEXAS ENERGY, LLC PROPOSED CONSENT ORDER (REVOCATION OF AGGREGATOR REGISTRATION AND OTHER REQUIREMENTS) This Order addresses the Settlement Agreement and Report to Commission (Agreement) between Staff of the Public Utility Commission of Texas (Commission) and Energy Broker Consultants, LLC (EBC Broker),' Energy Broker Consultants, LLC (EBC Aggregator),2 Wholesale Commercial Energy, LLC (Wholesale Commercial) (collectively, the Entities) and Mr. Danny Shannon (together, Parties), regarding Commission Staffs investigation of the Entities regarding potential violations of P.U.C. SUBST. R (f)(8), governing conduct of wholesale market participants. This docket was processed in accordance with applicable statutes and Commission rules. This Consent Order resolves all issues in this docket. The Entities and Mr. Shannon acknowledge the alleged violations detailed herein and consent to the entry of this order. The Commission adopts the following findings of fact and conclusions of law: 1. Findings of Fact 1. EBC Aggregator is a Texas Limited Liability Company and a Class I Aggregator (Registration No ), pursuant to P.U.C. SuBST. R EBC Aggregator warrants that it has conducted no activities in the Texas electric market. 3. EBC Broker is a Delaware Limited Liability Company that conducts energy brokering services in the Texas electric market. I Energy Broker Consultants, LLC (EBC Broker) is a Delaware Limited Liability Company. 2 Energy Broker Consultants, LLC (EBC Aggregator) is a Texas Limited Liability Company. 10

14 4. Wholesale Commercial is a Texas Limited Liability Company that operated as a qualified scheduling entity (QSE) in the ERCOT market from August 25, 2011 to June 24, Mr. Shannon is the sole member of EBC Aggregator, EBC Broker, and Wholesale Commercial. 6. The Entities' and Mr. Shannon's agent for service in this matter is John K. Arnold, at Winstead PC, 1100 JPMorgan Chase Tower, 600 Travis Street, Houston, TX The Commission has jurisdiction over the Parties to this proceeding and the subject matter of this Consent Order. 8. Wholesale Commercial served as the QSE for EBC Energy Today, LLC (EBC Energy Today), an entity that operated as a REP without a certificate. EBC Energy Today entered into a lease with Prier Energy, Inc. (Prier), a certificated REP, that purported to lease a d/b/a of Prier, and along with it Prier's ability to interface with ERCOT and the Commission. Although the Entities and Mr. Shannon believed the lease arrangement was valid and lawful, the lease did not and could not effectuate certificated authority to operate as a REP. Therefore, Wholesale Commercial could not schedule electricity on behalf of EBC Energy Today, through Prier or otherwise. 9. Wholesale Commercial submitted to ERCOT the REP certificate information of Prier in order to schedule electric delivery for customers of EBC Energy Today. As a result, the information Wholesale Commercial submitted to ERCOT was false, in violation of P.U.C. SUBST. R (f)(8). 10. Mr. Shannon and Mr. Mark Angell jointly formed EBC Energy Today, LLC on June 23, Mr. Shannon warrants that he transferred his entire interest in EBC Energy Today, LLC on July 1, 2011 to Mr. Mark Angell. 12. On July 1, 2011, Mr. Shannon was hired by EBC Energy Today, LLC as a consultant, a role he continued in until EBC Energy Today, LLC discontinued service. 13. Mr. Shannon and the Entities warrant that on May 25, 2012, Wholesale Commercial submitted to ERCOT a notice of termination of the Standard Form Market Participant Agreement (SFA) between Wholesale Commercial and ERCOT. The termination of the SFA was effective June 24,

15 14. Mr. Shannon and the Entities have voluntarily and fully cooperated with Staff's investigation. 15. The Entities and Mr. Shannon participated in one or more settlement discussions with Commission Staff, the purpose of which was to amicably resolve this matter. 16. On, 2012, the Commission approved the Parties' Settlement Agreement. 17. The Agreement provided that EBC Aggregator would relinquish its registration with the Commission (Registration No ) within 14 days of the date of the Order Approving the Settlement Agreement. 18. If, within 14 days of the date of the Order Approving the Settlement Agreement, EBC Aggregator fails to relinquish its registration, the Agreement provides that the Parties' Agreed Consent Order revoking Aggregator Registration No will be presented to the Commission. 19. The Entities and Mr. Shannon acknowledge the alleged violation detailed in this Order and consent to the entry of this Order. II. Conclusions of Law 1. The Commission has jurisdiction over this matter pursuant to PURA , , , and EBC Aggregator is an aggregator for purposes of PURA , , , and , as well as P.U.C. SUBST. R and P.U.C. SUBST. R The Entities and Mr. Shannon waive any notice required by the Texas Administrative Procedure Act and do not challenge the authority of the Commission to enter this Consent Order. 4. The Commission may revoke an Aggregator's registration for significant violations of the Commission's rules pursuant to PURA and (a) and P.U.C. SUBST. R (j) and P.U.C. SUBST. R (j) provides that "significant violations" that warrant Aggregator registration revocation include providing false or misleading information to the commission. 6. The requirements for informal disposition pursuant to P.U.C. PROC. R have been met in this proceeding. 12 Iq

16 III. Ordering Paragraphs In accordance with these findings of fact and conclusions of law, the Commission issues the following order: 1. The Aggregator Registration No is hereby revoked. 2. Pursuant to the terms of the Agreement, the Entities and Mr. Shannon shall not participate in the Texas electric market for a period of 3 years from the date of this Order. 3. This Agreement fully and finally resolves all existing issues or matters related to the Entities' and/or Mr. Shannon's participation in the Texas electric market up to the date of the Agreement, including those that have been or could have been raised in this Docket. The Parties enter into this Agreement to resolve this matter by compromise. This Agreement is entered into by the Parties in order to avoid the potential for expensive and protracted litigation, the outcome of which would be uncertain. 4. The Commission shall not be constrained in any manner from requiring additional action or penalties for violations that are not raised here. 5. Entry of this order does not indicate the Commission's endorsement or approval of any principle or methodology that may underlie the Agreement. Neither should the entry of an order consistent with the Agreement be regarded as a binding holding or precedent as to the appropriateness of any principle underlying the Agreement. 6. All other motions, requests for entry of specific findings of fact and conclusions of law, and any other request for general or specific relief, if not expressly granted herein, are denied. 13 /6'

17 SIGNED AT AUSTIN, TEXAS on the day of PUBLIC UTILITY COMMISSION OF TEXAS DONNA L. NELSON, CHAIRMAN KENNETH W. ANDERSON, JR., COMMISSIONER ROLANDO PABLOS, COMMISSIONER 14 /1^