Negative Charge

In a cramped office inside a Shell station at the corner of North University Drive and Jacksboro Highway, Ramzan R. Ali’s phone was ringing off the hook.

The Pakistani native in his mid-50s has been in the U.S. for 40 years. He had the look of a man who could use a good night’s sleep. As he spoke, he became intense and animated.

“I just want to make a living and feed my family,” he told a reporter for Fort Worth Weekly, in between phone calls.

Ali is founder and, until last month, was president of Proton Energy, a small Fort Worth-based electricity provider that was shut down by the Texas Public Utilities Commission.

The PUC had accused Ali’s company of more than 1,000 violations of state law, ranging from disconnecting its customers without giving proper notice to failing to honor promised discounts.

The agency last month revoked the company’s license. Proton’s customers were switched to a default service, which is allowed to charge rates more than 40 percent higher than is typical in Texas.

Ali said he’s lost $1 million because of the PUC’s actions. He had no experience in the retail electric business before starting Proton in 2009. He owned a telecommunications company for several years.

“I personally believe that they only want the big guys to stay in business,” he said of his recent troubles with the PUC.

Ali said that, in his first few years of operation, no complaints were filed against Proton with the PUC. He said he provided one-on-one service and that all of his customers had his cell phone number. His troubles began when a former business partner sabotaged his operation, Ali said, and the PUC refused to listen.

Reviews for Proton Energy on the Texas Electricity Ratings website tell a different story. Most customers voiced extreme displeasure with the company.

“They keep charging my credit card, and I have never received a bill,” Mike Wilkes of Houston wrote.

An Austin customer said no one could explain “why my bill mysteriously went on average of $85 to $88 per month to $170 to $180 per month.”

The now-defunct electricity provider, according to the PUC, only had 642 customers. When customers went beyond online comments and filed complaints with the PUC, state regulators investigated.

Proton reached a legal settlement with the PUC that required it to pay a $400,000 fine and give up ownership by July, but a deal to sell the company fell through. An attorney for the company pleaded with the three-member commission for more time to find a buyer.

In a hearing last month, Commissioner Brandy Marty told the attorney his client had run out of time and lost all credibility.

“There are more violations against this company than this provider has customers,” she said. “There is a lack of good faith going on.”

One problem was the company’s sales tactics. On Proton’s website, the company offered customers a rate of 5.8 cents per kilowatt-hour — one of the lowest in the state. But the fine-print details, not listed on the site, almost double that price.

Ali said every electricity provider has additional fees that are not included in their kilowatt-per-hour cost.

The state agency alleged that, on more than 400 occasions, Proton disconnected customers for nonpayment of bills without giving them proper notice. Some of those disconnects came during extreme weather, making the action illegal on two counts.

The PUC also accused Proton of preventing at least 288 customers from obtaining electricity elsewhere after they left Proton, by inaccurately listing them as switch-holds. When a customer owes money to a company, he or she can’t switch to another until the debt is paid and the hold is lifted. The PUC said the customers didn’t owe Proton money, but people were wrongly kept on switch-holds for almost a year, on average.

Ali adamantly denied that his company had ever cut off a customer’s electricity using a switch-hold. He did admit that one of his employees, whom he later fired, mistakenly listed some customers as switch-holds but said the mistake was quickly fixed.

“As soon as I found out, I sent a form [to PUC] to remove all of the switch-holds from my system,” he said. The PUC has no record of receiving such a form, and Ali said that he no longer has a copy because his computer was hacked and information was erased.

In its petition to revoke Proton’s license, PUC staff alleged that the company’s actions “pose serious risks to the health, safety, and economic welfare of the public” and that the company failed to respond to many of the PUC allegations.

In a written response, Robert A. Rima, Proton’s former attorney, denied the allegations. “Proton has made mistakes, but it is not the bad actor implied in [PUC staff’s] sensationalized petition,” he said.

Ali insisted that once he was made aware of his company’s problems, he fixed them within 24 hours. He said the company he hired to do Proton’s prepaid service, which works like a prepaid phone card, was responsible for the improper disconnection notices and that he never once disconnected a customer during inclement weather.

“We don’t do that,” he said. “The system is [automated] and won’t allow a customer to be disconnected when the weather is above or below a certain temperature.”

He said many of the complaints against the company stem from an incident in which a former business partner hacked into his computer and sent out e-mails asking his customers for money.

State officials said Proton provided false or misleading information during the agency’s investigation.

In the petition to revoke the company’s license, PUC officials said that “Proton’s violations … are among the most egregious violations that a retail electric provider can commit and demonstrate an utter disregard for compliance with … the commission’s substantive rules”

Since Texas deregulated its energy market 10 years ago, many companies have appeared and quickly disappeared, leaving a trail of angry customers. Jake Dyer, a spokesman for the Texas Coalition for Affordable Power, said he found Proton’s case unusual. Dyer’s organization buys electricity in bulk for 160 cities, including Arlington and Flower Mound, and also works for lower electricity rates.

“I have not seen that number of violations alleged against an electric provider in this market that I can recall,” he said.

Dyer noted that deregulation has made oversight all the more important. He credited PUC with staying on top of Proton’s case.

Terry Hadley, a spokesman for the PUC, said that recent state law changes will help Proton’s former customers recover some of their money. Start-up electrical companies are now required to have a line of credit of at least $500,000, to prevent fly-by-night providers from leaving behind debt. Proton’s line of credit, Hadley said, will likely be enough to pay back its customers as well as the $400,000 penalty.

In North Texas, the default provider — to keep customers’ electricity service from being interrupted — is TXU. The last-resort providers are chosen by the PUC after a bidding process.

Dyer said that former Proton customers should get off the last-resort service as quickly as possible. There’s no contract or time commitment, so anyone can jump ship at any time. He encouraged them to go to the Power to Choose website, which compares energy companies.

“The fact is, they’ve been bumped over there by no fault of their own,” he said. “The bad news is some of these folks may have sticker shock for a month.”

Ali said he has worked out a deal for his former customers with another small energy company. He said the PUC owes him more than $170,000 for fines he’s paid that were covered by his line of credit. He said that the PUC will not answer his e-mails and phone calls.

“I’ve borrowed money from my family,” he said. “I just want to pay them back and get on with life and find a new job.”