Attorneys: NRG withheld $3.3M from ratepayers
More than $3.3 million may have been withheld from the city’s ratepayers by NRG Power Marketing, according to claims made by attorneys for Denton Municipal Electric in district court Thursday.
The city-owned utility filed suit against NRG Power Marketing earlier this year. The lawsuit got its first substantial hearing in a Denton district court Thursday afternoon, making public for the first time how much damage the city is claiming.
The original court filings did not include specific amounts. In addition to the $3.3 million withheld from ratepayers, DME also has claimed an additional $40 million in damages in the case.
How much those losses may have cost ratepayers in terms of higher electric bills isn’t clear. The city’s electric fund receives and spends about $170 million each year.
Here is what the city has alleged in its lawsuit, which landed in 16th District Court in Denton County.
DME contracted with NRG after most of the state’s electrical grid became deregulated in 2010. NRG represented DME on the state’s electric grid until DME could represent itself in October 2014.
The Electric Reliability Council of Texas, or ERCOT, wrote rules to help the state’s electric grid remain reliable as it was deregulated. NRG and other companies qualified, through credit-worthiness and other requirements, to buy and sell electricity right away. DME finally qualified late last year.
In other words, until DME could serve as its own brokerage in the Texas energy marketplace, NRG was the city’s broker in buying, selling and moving electricity through the grid to Denton ratepayers from 2011 to 2014.
“DME had no access to ERCOT, or ERCOT information, except through its broker,” said Joe de la Fuente, attorney for DME.
NRG is a publicly traded energy company that generates most of its electricity from coal, oil and natural gas power plants. Based in Houston and Princeton, New Jersey, the company also owns the nuclear power plant in Bay City. Wind and solar power make up about 8 percent of the company’s generation.
In setting up the deregulated marketplace, ERCOT also wrote some rules to be fair to ratepayers. Ratepayers in Denton and elsewhere paid for the electric infrastructure that was brought into the deregulated marketplace. ERCOT pays credits for that infrastructure, particularly when demand for electricity is high, to be fair to the ratepayers who paid for it. The city alleged NRG withheld $3.3 million in those credits.