Energy Choice
                            

Matters

Retail Supplier to Pay $2.1 Million Under Settlement with AG, Regulators

January 9, 2015

Email This Story
Copyright 2010-15 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

HIKO Energy, LLC has agreed to pay $2.1 million, including $1.85 million in restitution to consumers, and to significantly revise its business practices, in order to resolve a complaint filed by the Acting Attorney General, New Jersey Board of Public Utilities (BPU), and New Jersey Division of Consumer Affairs, which had alleged that the supplier misled customers.

"HIKO aggressively solicited consumers with written guarantees and verbal representations about its monthly prices for electric and/or natural gas service – promises the company failed to fulfill, resulting in significant financial losses for New Jersey consumers," Acting Attorney General John J. Hoffman said. Hoffman noted that the state continues to pursue action against other third-party energy suppliers accused of misleading consumers (the state previously filed suit against Palmco Power NJ, LLC & Palmco Energy NJ, LLC; and Keil & Sons, Inc., d/b/a Systrum Energy).

The state's Complaint alleged that HIKO, a third-party energy supplier based in Monsey, New York, misled New Jersey consumers with written guarantees that, if they switched from their utility companies, they would see monthly savings of as much as 10 percent in their electric and/or natural gas bills during the first six months. HIKO sales representatives also allegedly represented to consumers that, after the first six months, their monthly bills would never exceed those of the utility companies.

"However, HIKO did not deliver the promised savings. As energy prices spiked in early 2014, HIKO's rates far exceeded those its customers would have paid, had they stayed with their previous electric and/or natural gas utilities," the AG's office said in a news release.

The state also alleged that HIKO switched some consumers' electric and/or natural gas accounts without the consumers' knowledge or consent

The State will distribute the $1.85 million designated for consumer restitution in late summer. The settlement amount also includes $150,000 to reimburse the State's investigative costs and fees, including the cost of distributing settlement funds, and $100,000 in civil penalties.

Additionally, under the settlement, HIKO agreed to make significant revisions to its business practices. These include revising the company's website, contracts and related documents to provide, among other things, clear information about the company's pricing and billing practices, including the precise formula by which monthly gas and electric prices will be determined. The website will include a clear and conspicuous chart of the final unit prices that HIKO charged to consumers during the previous six months, as well as comparison rates charged by the utility companies.

More specifically, notably terms under the settlement include:

HIKO sales representatives shall not represent, directly or indirectly, that HIKO is providing a service that is "authorized by" or "approved by" PSE&G or any other LDC.

If HIKO solicits pursuant to a variable rate plan from the commencement of the switch, then HIKO must clearly and conspicuously disclose that: (a) HIKO's costs to supply this energy varies from month-to-month; and (b) a customer's monthly Electric Generation Service and/or Gas Supply Service may be greater or less than the costs that the consumer would have incurred if the consumer had continued to purchase such services from his/her LDC.

HIKO Sales Representatives shall not instruct a consumer to "just say yes" to any of the questions during a Verification Call and shall not assist a consumer in any way during a Verification Call.

HIKO shall include on its website a clear and conspicuous chart of the final unit price per therm and per kWh that HIKO charged Consumers for the preceding six (6) month period pursuant to each promotional offer during that period, as well as a comparison to LDC rates during the same time period. HIKO's listed unit price shall include all costs associated with supplying the Electric Generation Service and Gas Supply Service including, but not limited to, transportation. By way of example, the unit prices on this chart shall be the unit prices that HIKO provides to the LDCs to include on a consumer's billing statement.

HIKO shall not require consumers to reference and/or piece together the contents of more than one document to create the total agreement between HIKO and the Consumer (e.g separate T&C's, welcome letters, etc).

HIKO shall not include in the HIKO Contract and/or the Terms and Conditions a liability provision that waives any right New Jersey consumers have under New Jersey or Federal consumer protection law. HIKO shall not include in the HIKO Contract and/or the Terms and Conditions any choice of law provision that waives any right New Jersey consumers have under New Jersey or Federal consumer protection laws.

HIKO shall revise its Contract and the Terms and Conditions to include a clear and conspicuous statement of the precise mechanism or formula by which the price for electric and/or gas supply will be determined, as required by N.J.A.C. 14:4-7.6(b)(2)

ADVERTISEMENT
NEW Jobs on RetailEnergyJobs.com:
• NEW! -- Digital Marketing Manager -- Retail Supplier
• NEW! -- Director, Business Development Power & Gas -- Retail Supplier
• NEW! -- Business Development Manager -- Retail Supplier -- Houston/DFW
• NEW! -- Energy Advisor
• NEW! -- Manager-Retail Key Account Sales -- Retail Supplier
• NEW! -- Energy Advisor -- DFW
• NEW! -- Business Development Director
• NEW! -- Scheduling/Business Analyst -- Retail Provider
• NEW! -- Staff Accountant -- Retail Provider -- Houston
• NEW! -- Regional Sales Manager -- Retail Provider -- PA/IL/New England/Texas
• Sr. Pricing Analyst -- Retail Provider -- Houston
• Senior Energy Markets Pricing Analyst
• Energy Markets Analyst
• Utility Rules Analyst -- Retail Supplier