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Breaking: NY PSC Staff Alleges ESCOs Used Free LED Lighting Pitch As Pre-Arranged Appointment To Avoid Certain UBP Requirements (Including TPV)

PSC Issues Orders To Show Cause to 2 ESCOs For Alleged Violations

Commissioner Will "Throw The Book" At ESCOs If Allegations Proven


September 15, 2016

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

The New York PSC issued orders to show cause to Marathon Energy Corporation and ABC Energy, LLC as Staff alleged that both ESCOs were using the lure of an appointment to receive free LED lights to switch customers to ESCO service, allegedly without customers' knowledge and without certain customer protections which would normally be required, but which were allegedly not provided on the grounds that the sales were made as a result of pre-arranged appointments, and not subject to certain consumer protections.

Staff alleged, as a result of reviewing customer complaints, that Marathon Energy Corporation and ABC Energy, LLC exhibited a, "pattern of customer deception," and, "egregious," violations of the Uniform Business Practices.

Specifically, Staff alleged that Marathon Energy Corporation and ABC Energy, LLC engaged a third-party firm, alleged by Staff to be Atlantis Business Consulting, that called customers to schedule the offering of a free LED lighting program. Staff alleged that Atlantis Business Consulting is affiliated with ABC Energy, LLC

Staff alleged that in certain instances, the third-party marketing representative misrepresented that the company was working with the customer's utility

Staff alleged that in making the appointment, the third-party marketing representative asked the customer to have their energy account information available.

In at least one instance, Staff alleged that the customer specifically asked if the program would affect the customer's energy supplier, and the third-party rep averred that the customer's ESCO would not be changed.

However, Staff alleged that the third-party marketing rep would have customers sign a lease for free light bulbs, but that such agreement also provided that the customer's energy supply would be provided by Marathon Energy Corporation, ABC Energy, LLC, or a combination of the two ESCOs. Staff alleged that the document also provides that the customer has, "sold its right," to their account, giving, as Staff alleged, "ABC" (which Staff used as an abbreviation for Atlantis Business Consulting) the authority to purchase energy on the customer's behalf, completely at the discretion of ABC, in exchange for energy efficiency products and services

Staff alleged that the third-party marketing rep would not discuss with the customer that the agreement authorizes a change in the customer's energy supplier

Staff alleged that no TPV was conducted for such sales, on the grounds that, as pre-arranged appointments, the sales were not subject to a TPV.

Staff alleged that as the appointments were allegedly for free lighting, and not to discuss ESCO service, the exemption from a TPV for a pre-arranged appointment should not apply.

Commissioner Gregg C. Sayre said that, while he awaits the ESCOs' responses to the allegations, if the allegations are proven to be true, he is prepared to "throw the book" at the ESCOs.

Notably, the orders to show cause to Marathon Energy Corporation and ABC Energy, LLC were issued under the PSC's new process (since its retail reset order) that expedites the process of bringing allegations to the Commission, eschewing the prior informal and Notice of Apparent Failure process which provided an opportunity for ESCOs to respond to Staff's allegations prior to a show cause order.

The orders to show cause direct the two ESCOs to explain why they should not be prevented from enrolling new customers and why they should not have their certification to operate as an ESCO revoked.

A senior Marathon executive stated that, "Marathon has a long history of pro-active communications and working closely with the PSC to ensure the highest level of compliance. We are closely reviewing the matter and will respond when we have completed our review."

Written orders have not yet been issued

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