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Positive Energy Electric Supply Wishes to Retain Marketing Agreement with ResCom, Seeks Guidance from DPUC

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September 29, 2010

Positive Energy Electric Supply, LLC, which is a registered Connecticut electric aggregator that markets on behalf of ResCom Energy, has asked the Connecticut DPUC for guidance on whether it should relinquish its aggregator certificate due to its function as a marketing agent for ResCom.

As previously reported by Matters (12/4/08), the DPUC has held that Connecticut aggregators may not act on behalf of, or act as an agent for, an electric supplier. Aggregators must act as the customer's agent.

Positive Energy said that it was not aware of this precedent, which was first established in December 2008.

After learning of the DPUC's policy regarding aggregators, Positive acknowledged that its relationship with ResCom falls outside of the boundaries of appropriate aggregator functions.

Positive Energy said that it would rather relinquish its aggregator certificate than sever its marketing agreement with ResCom.

However, Positive Energy noted that the DPUC has an ongoing investigation into the relationship among suppliers, aggregators, and agents in the retail electric market (Docket 10-06-24). Thus, the current DPUC precedent may be altered in the near future.

Positive Energy also said that it disagrees with the DPUC's interpretation of the relevant statute as requiring an aggregator to act as the customer's agent.

"Unlike the insurance brokerage business, for example, where the relationships among insurance agents and the insurance companies are often misunderstood by the retail buyers of insurance, in the business of soliciting customers for electric supply, Positive Energy respectfully suggests that the buyer of retail electric service through Positive Energy virtually never expects the sales representative to have a loyalty to the buyer, as opposed to working for the supplier, unless the representative specifically states that he or she is acting as an 'aggregator' and will be shopping for the customer's business among various suppliers for the benefit of a group of buyers," Positive Energy said.

"It seems to Positive Energy that a registered aggregator can segregate its aggregator business from its marketing agent business without confusion to customers," Positive Energy added.

Separately, Positive Energy submitted responses to several interrogatories issued in a not-yet-docketed DPUC investigation of Positive Energy, concerning, among other things, delayed customer enrollments with suppliers, as well as the information contained on its license application.

Regarding the delayed enrollment of some customers, Positive Energy submitted the following response to the DPUC, in which it makes several allegations against Clearview Electric:

"In April 2009, Positive Energy began enrolling customers with Clearview Energy ('Clearview') as a non-exclusive marketing representative ... In July 2009, Clearview encountered financing limitations which restricted its available power load. Positive Energy then learned that some enrollments it had submitted to Clearview had not been processed because of the financing issues.

"By late July 2009, Clearview instructed Positive Energy that it would be necessary to temporarily stop further enrollments for several weeks because Connecticut customer response had been greater than anticipated. Clearview's financing limitation did not then allow Clearview to meet the Connecticut demand. Clearview advised Positive Energy that it would have the additional financing necessary for the increased enrollments available imminently. Meanwhile Positive Energy sought additional suppliers.

"Positive Energy formalized its relationship with an alternative supplier, Viridian, and in August 2009 its enrollments were being submitted to Viridian. In mid August 2009, Clearview instructed Positive Energy to stop submitting customer enrollments. While financing for Clearview was a limiting factor, Positive Energy subsequently discovered that Clearview apparently was choosing to take enrollments directly at rates higher than it was offering through Positive Energy.

"In mid-September 2009, Positive Energy learned that Clearview had withheld and not processed approximately 1200 customer enrollments submitted by Positive Energy during July and August 2009. Eventually, by October 2009, after receiving pressure from Positive Energy, Clearview processed the 1200 enrollments but refused to honor the rate provided to Positive Energy. Positive Energy waived its commissions from Clearview on those enrollments so the lower customer rate could be maintained pursuant to the enrollment agreement. Subsequent to October 2009, Positive Energy did not enroll further customers through Clearview."

Regarding Positive Energy's license application, the original application listed Joseph Ventura as President, and Elena Cahill as CEO. Positive Energy later amended its application to remove Cahill as CEO, but did not report that anyone else would fill that role.

However, the Attorney General noted that Ventura was described as the CEO of Positive Energy in a press release issued on behalf of Positive in June 2010, as the Attorney General claimed this information was not reflected in the application. Positive Energy responded in an interrogatory response that the description of Ventura as CEO in that press release, drafted by a vendor, was an error, and that Positive Energy did not catch the error prior authorizing distribution of the release to the media. Positive Energy said that it has since corrected the release on its website.

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