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Retail Supplier Enters Into $850,000 Settlement To Settle Variable Rate Class Action Lawsuit

January 6, 2017

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Copyright 2010-17 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

Connecticut-based Discount Power, Inc. has entered into a settlement to resolve a class action lawsuit brought against the supplier in Connecticut state court, under which the company will contribute $850,000 to a settlement fund to be used to pay certain customer claims.

The suit alleged that Discount Power claimed in its contracts with customers that its variable rate for electricity supply services would fluctuate based on changes in the "wholesale power market," but the suit alleged that in practice the supplier failed to decrease its variable rate when wholesale market rates went down. Plaintiffs alleged that the charged variable rates were not connected to the wholesale price for power as allegedly provided in the contract, in alleged violation of the Connecticut Unfair Trade Practices Act

Discount Power, Inc. (DPI) denied all of Plaintiffs’ claims. Discount Power, Inc. specifically stated that it followed all terms of its contract with customers, and that plaintiffs’ claims are without factual or legal merit.

"Nevertheless, for the purpose of avoiding the burden, expense, risk, and uncertainty of continuing to litigate the Action, and for the purpose of putting to rest the controversies raised or which could have been raised in the Action, and without any admission of any liability or wrongdoing whatsoever, DPI desires to settle the Action and all claims asserted or which could have been asserted in or subsumed by the Action on the terms and conditions set forth in this Settlement," the settlement states

Under the settlement, Discount Power, Inc. will provide $850,000 to a settlement fund to pay certain customer claims.

Customers eligible for payments under the fund include individual residential and small business consumers enrolled (either initially or through "rolling over" from a fixed rate plan) in a Discount Power, Inc., variable rate electric plan in connection with a property located within Connecticut at any time from June 1, 2013, through and including July 31, 2016.

Individual Discount Power, Inc. customers who have filed a claim form will be eligible to receive a share of the settlement fund based upon the amount of variable rate electricity used by that claimant between June 1, 2013, and July 31, 2016 as a percentage of the total amount of variable rate electricity used by all claimants during that same period (excluding periods in which Discount Power Inc.’s procurement cost for electricity exceeded the variable price at which it sold that electricity), as set forth in Discount Power, Inc.'s internal records

To the extent claims exceed the fund, each claimant would receive a pro rata share of the net settlement fund based on his or her calculated loss.

The settlement states that, "The Parties understand and agree that this Settlement Agreement embodies a compromise settlement of disputed claims, and that nothing in this Settlement Agreement, including the furnishing of consideration for this Settlement Agreement, shall be deemed to constitute any finding of wrongdoing by any of the Released Parties [Discount Power, Inc.], or give rise to any inference of wrongdoing or admission of wrongdoing or liability in this or any other proceeding. This Settlement Agreement and the payments made hereunder are made in compromise of disputed claims and are not admissions of any liability of any kind, whether legal or factual. Moreover, Defendant specifically denies any such liability or wrongdoing."

Discount Power, Inc. provided the following statement to EnergyChoiceMatters.com, "While Discount Power stands by our pricing and marketing practices, we do recognize that the cost to defend against this lawsuit was not in our customers’ best interest. We have chosen instead to focus our time and effort on delivering the best service to our customers to meet their energy needs."

The case is Chandler and Conover v. Discount Power, Inc., Case No. HHD-CV14-6055537-S, Superior Court of the State of Connecticut

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