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Retail Supplier To Refund Customers $262,000 Under Settlement With Commission Staff

April 22, 2015

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

Major Energy Electric Services LLC would refund to customers $262,500 and adhere to remediated sales practices under a settlement with Staff of the Illinois Commerce Commission and the Citizens Utility Board to resolve an investigation into the company's marketing practices.

Among other things, ICC Staff had alleged that Major Energy's marketing potentially violated certain regulations and/or statute based on the following allegations:

• The door-to-door sales script includes statements that give the net impression that the customer is being visited by a consultant hired by or otherwise affiliated with the utility to talk to them about the program, not to sell supply for a competitive company;

• The door-to-door sales script includes statements regarding savings that Staff believes are incomplete, inaccurate, and deceptive;

• The door-to-door sales script does not contain explicit language to verbally disclose items (d) through (p) of the minimum disclosures required for a sales contract per Sections 412.110 and 412.120(e) of Part 412 (83 Ill. Adm. Code 412.110 and 412.120(e)) and the sales contract does not include (i) an adequate explanation of how the variable rate charges for service are determined and (ii) a statement that the sales agent is not with a government body; and

Major Energy disagreed that it violated any regulation or statute and asserted that its intent is and has always been to fully comply with all applicable laws and regulations

Major Energy, Staff, and CUB entered into a settlement to resolve the proceeding. Under the settlement, Major Energy does not admit to the allegations against it.

Under the stipulation, Major Energy has agreed to establish a fund in the aggregate total amount of $262,500 to issue refunds to any person or entity who was a residential or small commercial customer of Major Energy from 2012 through the end of 2014. Major Energy shall make refund payments from this Customer Payment Fund to eligible customers so as to provide relief to customers, "who contact Major Energy and present reasonable, good faith claims that they believe they were misled, uninformed, or confused as a result of an alleged action or failure to act by Major Energy at the time they enrolled for service," the stipulation provides

The stipulation provides that "appropriate" refunds shall take into account various factors including the enrollment circumstances asserted by the customer, whether enrollment communications were conducted in the customer’s native language, the utility price to compare -- or other appropriate price to compare such as a municipal aggregation supplier or other supplier -- at the time the customer enrolled with Major Energy, and the price and contract term under the customer’s contract.

To the extent that any early termination fees were applied or are determined to be applicable to Eligible Customers, Major Energy shall waive or credit such fees in determining the refund amount for any residential or small commercial retail customer.

Nothing in this stipulation and settlement constitutes an admission of any violation or wrongdoing by Major Energy, nor prohibits any customer from pursuing a complaint for an alleged violation of applicable laws and rules; provided, however, that any refund received by a customer pursuant to this stipulation and settlement shall be included in determining the net amount paid by a customer under the customer’s contract, if relevant.

Major Energy also agrees to various remedial measures in its sales practices. Most notably, Major Energy specifically agrees it will not make suggestions of "savings," "reductions," or "lower bills" if guaranteed savings are not explicitly part of the actual offer, in any of its marketing materials viewed by or presented to potential Illinois customers

For door-to-door sales, Major Energy will obtain an independent third party verification as well as a signed Letter of Agency

Major Energy provided the following statement on the settlement agreement:

"We are pleased to put this matter behind us and get back to the business of offering energy choice to the citizens of Illinois," said Eliott Wolbrom, Director of Marketing for Major Energy. "We’re happy to be working in conjunction with the ICC and its Staff, and will ensure our marketing activities adhere to all required rules, regulations, and procedures. Further, we will be doubling-down on our efforts to appropriately educate consumers on energy choice in a clear and conspicuous manner that will undoubtedly benefit all. We will primarily focus on marketing fixed rate offerings. This agreement and the customer payment fund stands as a solid testament to our core belief of putting the customer first. We appreciate and are grateful to the ICC Staff and CUB for working hard with us on finding common ground and getting these issues resolved."

Major Energy said that, as part of the agreement, subject to final approval from the ICC, Major Energy can immediately resume marketing activities in Illinois including door-to-door, telemarketing and any other customer education and outreach programs.

The settlement agreement is subject to final approval by the ICC

ICC Docket No. 14-0512

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