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Regulator Slams "Callous" Actions of Retail Supplier in Seeking $300,000 in Penalties, Supplier Says NOV Inaccurately Reflects Evidence

May 7, 2015

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

The Connecticut PURA has issued a Notice of Violation to Liberty Power Holdings, LLC concerning what the NOV alleges is unlawful back-billing of customers, and would impose a civil penalty of $294,000 on the company.

The NOV is not final and Liberty Power Holdings, LLC may request a hearing on the NOV, which the company said that it would do.

The NOV addresses what the NOV terms Liberty Power Holdings, LLC's "re-billing" of approximately 370 Connecticut commercial customer accounts for the period December 2013 to February 2014. Initiation of the investigation followed the Authority being notified by Connecticut Light and Power that Liberty Power Holdings, LLC was billing customers as high as $2.24168/per kWh.

The NOV states that, "As a result of the Investigation, the Authority has reason to believe that violations of Conn. Gen. Stat. §16-259a(d) have occurred."

Conn. Gen. Stat. §16-259a provides in pertinent part: that, "No ... electric supplier, which inaccurately bills a retail customer for service may bill or otherwise hold the customer financially liable for more than one year after the customer receives such service, unless the customer, either alone or with an individual other than an employee of the company, by an affirmative act, is responsible for the inaccurate billing or fails to provide for reasonable access to the premises where the company's meter is located by an employee of the company during business hours for the purpose of reading the meter."

Conn. Gen. Stat. §16-259a further provides that, "Any ... electric supplier ... that holds a customer financially liable under subsection (a) ... of this section shall establish a payment plan which prorates all arrearages for service the customer owes over a period of time that is no shorter than the period for which the customer is being held financially liable by such ... electric supplier ... The payment plan shall provide that no payment charged to a customer under such plan shall exceed fifty per cent of the average amount that the company charged such customer for each billing period over the previous twelve-month period for services received during that period."

The NOV states that, "In February 2014, Liberty discovered that all of its Connecticut commercial customers billed through CL&P, and whose fixed term contracts had expired at various times during 2013, had been incorrectly billed at their expired contracts' fixed price instead of a variable price pursuant to their contract terms and conditions of service (Default Variable Price). During the period between 2013 and January 2014, when these commercial customers' contract terms expired, their retail electric service with Liberty should have migrated to a Default Variable Price unless the customers cancelled or renewed service at a different price. Liberty also discovered that some of the contracts had been incorrectly billed at a fixed rate instead of the Default Variable Price as far back as 2012."

The NOV states, "Liberty testified that the tool which transmitted the rate to its billing provider was failing to send over the correct effective date for the new rate, and thus CL&P was not receiving the proper rate updates for these customers. As a result, these customers continued to be billed, incorrectly, at the fixed prices beyond the expiration date of their fixed rate terms."

The NOV states, "In late March 2014, Liberty decided to correct the billing error by billing 286 commercial accounts for the difference between their incorrectly billed fixed prices and the Default Variable Price. Although some customers had been incorrectly billed for a significantly longer period of time, Liberty decided to correct the error only for the three-month period of December 13, 2013 through March 14, 2014, the period during which Liberty maintained that it incurred the greatest costs to procure electricity. On March 28, 2014, Liberty provided to CL&P the new price per kWh amount to be charged to these customers."

The NOV states, "Liberty discovered the re-billing issue in February 2014. Liberty never made an official filing with the PURA requesting approval of its re-billing plan. Instead, Liberty issued its prices, including back-billed amounts for the affected customers to CL&P. Liberty sent its prices, including back-billed amounts for the affected customers to CL&P on March 28, 2014. CL&P contacted Liberty to confirm these prices on April 1, 2014, and then began issuing the bills as prescribed. On April 3, 2014, legal counsel for CL&P contacted Liberty's counsel advising that there were issues with the back-billing. Also on April 3, 2014, the Authority issued a draft Decision to reopen Docket No. 06-12-07, Application of Liberty Power Holdings, LLC for an Electric Supplier License, for the purpose of reviewing Liberty's recent re-billing of customers. It was not until after the draft Decision was issued that Liberty decided to terminate the back-billing plan."

The NOV states, "Liberty's back-billing of customers violates the provisions of Conn. Gen. Stat. §16-259a(d), which requires Liberty to establish a payment plan for each affected customer which prorated all arrearages for service the customer owed over a period of time that is no shorter than the period for which the customer is being held financially liable. At a minimum, the affected customers should have been given three months to pay back the additional monies charged. Also, Liberty failed to perform a separate calculation to assure that no payment charged to a customer under such plan would exceed fifty per cent of the average amount that the company charged such customer for each billing period over the previous twelve-month period."

The NOV states that, "The evidence in the record shows that Liberty had been aware of Conn. Gen. Stat. §16-259a prior to its actions to rebill the customers. Despite warnings from CL&P's counsel, Liberty went ahead with its back-billing plan, and it was only after the Authority's draft Decision to open this investigation was issued that Liberty halted the back-billing plan."

The NOV states that, "Liberty blatantly disregarded the consumer protection measures provided by the legislature to customers in Conn. Gen. Stat. §16-259a and recklessly re-billed 141 customers, a total of 294 accounts, charging some customers as high as $2.24168 per kWh in the March 2014 bills. The violations documented in this proceeding are serious and compel close monitoring of Liberty's performance going forward. The Authority will not hesitate to take whatever corrective action may be necessary upon a showing that Liberty is not meeting any consumer protection measures allowed under Connecticut law."

"Liberty blatantly and recklessly disregarded the consumer protection measures afforded to customers by law. Liberty's callous action could have caused significant financial hardship, and possibly termination of electric service, for the affected customers. Many of the affected customers were non-profit organizations, schools, state agencies and small businesses," the NOV states

The NOV would assess a civil penalty of $1,000 per account violation for 294 accounts billed in March 2014, for an aggregate amount of $294,000. The NOV states that the Authority will separately issue a Decision in this proceeding to order Liberty to refund CL&P and United Illuminating the out-of-pocket expenses for participating in the proceeding and the costs CL&P expended in the re-billing, cancelling and then re-billing of Liberty's customers.

Liberty Power Holdings, LLC issued the following statement to EnergyChoiceMatters.com:

"The Notice of Violation does not accurately reflect the evidence presented in the hearing. Customers were not harmed given – as the Notice accurately points out – 'Liberty decided to terminate the back-billing plan'. We are disappointed by PURA's initial findings and will be seeking a new hearing."

Docket 06-12-07RE05

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