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Regulator Issues Draft Guidelines To Apply in Retail Supplier Violations Proceedings, Penalties

September 13, 2016

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Copyright 2010-16 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

The Massachusetts DPU has issued draft interim guidelines to apply in electric and natural gas competitive supplier formal investigations and proceedings

The interim guidelines to be developed by the DPU are to establish a process and procedure that will be uniformly implemented when a competitive supply company has allegedly violated DPU regulations, and will apply to all competitive supply proceedings that require compliance with Chapter 30A.

These interim guidelines are proposed to apply to all electric competitive suppliers, electricity brokers, gas competitive suppliers, and gas retail agents that participate in the electric and gas retail markets in the Commonwealth of Massachusetts and are licensed by the Department of Public Utilities.

Among other things, the draft guidelines address penalties for violations found by the DPU

Penalties may include licensure action, which may include, but not be limited to, a competitive supply company being:

i. Placed on probationary status;

ii. Prohibited from signing up new customers for a specified period time;

iii. Prohibited from engaging in a particular marketing channel for a specified period of time;

iv. Prohibited from offering particular products for a specified period of time; or

v. Subject to suspension, revocation, or non-renewal of its license.

The draft interim guidelines propose that the following civil penalties be available to the DPU:

a. Each competitive supply company who violates any regulation promulgated by the Department pursuant to G.L. c. 164, §§ 1A through 1F, shall be subject to a civil penalty not to exceed $25,000 for each violation for each day that the violation persists; provided however, that the maximum civil penalty shall not exceed $1,000,000 for any related series of violations.

b. In determining the amount of the civil penalty, the Department shall consider the nature, circumstances, and gravity of the violation; the degree of the respondent’s culpability; the respondent’s history of prior offenses; the Respondent’s ability to pay; any good faith shown by the Respondent in attempting to achieve compliance after notification of a violation; the appropriateness of the penalty to the size of the business of the Respondent; the effect on the Respondent’s ability to continue in business; and such other matters as justice may require.

The draft interim guidelines would allow for the DPU to use an informal review of allegations as warranted

Per the draft, the Department may immediately commence an informal review of a competitive supply company upon receipt of a complaint or report of a suspected or alleged violation of G.L. c. 164, §§ 1A through 1F, or any regulation promulgated or order issued thereunder.

An informal review would be conducted by a hearing officer designated by the Department (prosecuting officer).

At the conclusion of the informal review, the prosecuting officer and respondent may agree to an informal remedial plan. The informal remedial plan shall be in writing and signed by the respondent, the draft provides

Any informal review or conference shall not be construed to be an adjudicatory proceeding as defined in G.L. c. 30A, the draft provides. Any informal remedial plan shall not be construed as a final order of the Department, the draft provides.

The draft interim guidelines would also authorize the DPU to initiate a formal proceeding without an informal review where appropriate.

If the Department intends to initiate a formal proceeding, the Department shall, within 60 days after a report of a suspected or alleged violation of G.L. c. 164, §§ 1A through 1F, or any regulation promulgated or order issued thereunder, issue a Notice of Probable Violation (NOPV), the draft provides

The draft guidelines also establish procedures for an adjudicatory hearing under the formal proceeding.

However, the draft guidelines also provide that the Department may waive the requirement for notice and hearing under the formal proceedings guidelines before issuing a remedial order, "when the Commission determines that failure to do so would result in serious harm to life or property."

The Department shall include in any such order an opportunity for a hearing pursuant, "as soon as practicable after issuance of the order," the draft provides

At the conclusion of the adjudicatory hearing, if the Department finds that a violation has occurred or is continuing to occur, it may issue a remedial order, the draft provides. The remedial order shall include a written opinion setting the factual and legal basis of the Department’s findings and shall direct any party to take, or refrain from taking, any action, consistent with said party’s obligations under G.L. c. 164, §1F, or any regulation promulgated or order issued thereunder, the draft provides

A remedial order issued by the Department shall be effective upon issuance, in accordance with its terms, unless stayed, suspended, modified, or rescinded, the draft provides. If the respondent fails either to appeal a remedial order to the Supreme Judicial Court or to comply fully with the order within 20 days, the Department may refer the case to the Attorney General with a request that an action be brought in the Superior Court to seek appropriate relief, the draft provides

The draft interim guidelines would also allow the DPU to resolve proceedings via a consent order. A consent order must be signed by the COMPETITIVE SUPPLY COMPANY to whom it is issued, or a duly authorized representative of that company, and must indicate agreement with the terms therein. A consent order need not contain an admission by any company that a violation has occurred, and without such a term, does not constitute an admission. A consent order is a final order of the Department, having the same force and effect as a remedial order issued, the draft provides

The DPU is accepting comments on the draft interim guidelines

Docket D.P.U. 16-156

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